Financial Aid Return and Title IV Funds and Refund (Policy)

Office of Origin: Financial Aid
Responsibility: Executive Director, Advising & Financial Aid
Original Date Adopted: 9-18-18
Dates Reviewed: 10-30-18, 2-16-23
Last Date Board Approved: 2-5-19, 6-20-23

Overview

If a student receiving federal financial aid withdraws from Lake Michigan College (LMC or the College) or ceases attending, the Financial Aid Office is required to complete a Return of Title IV (R2T4) Funds calculation to determine how much aid
was earned during that semester based on the length of time the student was actively enrolled. This federally required Return of Title IV Funds Policy applies to all students withdrew or stopped attending prior to the 60% period of the term for any reason.

The College’s refund calculation to determine the amount of tuition, room and board charges for which the student is responsible is separate from the federal Return to Title IV calculation described in this policy.

When does a Return to TIV Calculation Apply

The College is required to perform an R2T4 Calculation under the following circumstances:

  • A student withdraws from all courses
  • A student receives a combination of E, I, and/or W grades for all courses
    • Federal regulations require all incomplete (I grades) to be considered a withdrawal after 45 days from the end of the term
  • A student receives a failing grade due to ceasing attendance in the course

If a student withdraws or takes a leave of absence on or after the last day to add/drop a course for a semester, aid will be recalculated in accordance with this policy.

If a student does not begin the term or withdraws or takes a leave of absence before the first day of classes for a semester, all charges and financial aid for that semester are canceled. A student could owe these funds to the college, the federal government, or both.

Determining the Withdrawal Date

The College determines the Return of Title IV calculation based on the date the College determines a student has withdrawn. This date will fall under one of the following categories:

1. Official Withdrawal Date

The official withdrawal date is:

  • The date the student began the official withdrawal process, or the date the student provided official notice of their intent to withdraw, whichever is later, or
  • The date the College began the paperwork for a leave of absence, or
  • The date the College became aware that the student has ceased attendance due to incapacitation as a result of illness, accident, or other extenuating circumstances beyond their control.

If the College determined that the student did not begin the official withdrawal process and did not otherwise notify the College of the intent to withdraw, or the student ceased attendance, the College will determine an unofficial withdrawal date.

2. Unofficial Withdrawal Date

The unofficial withdrawal date is:

  • The last day of attendance at an academic related event, or if unavailable,
  • The mid-point of the semester

Use of Withdrawal Date

The percentage of Title IV assistance that has been earned is equal to:

  • The percentage of the semester* which the student completed as of the withdrawal date, if the withdrawal date occurred before the 60 percent mark of the semester
  • 100% if the withdrawal date occurred after the 60 percent mark of the semester

If the student’s withdrawal date occurred prior to the 60 percent mark* of the semester, the calculation will determine:

  1. the percentage of federal aid the student has earned, and
  2. the percentage of federal aid the student did not earn that must be returned, and
  3. the party responsible for returning the funds (Lake Michigan College and/or the student).

*With the exception of courses that are in modules, the percentage of the semester is determined by dividing the total number of calendar days in the semester into the number of calendar days the student completed as determine by the withdrawal date. The total number of calendar days excludes scheduled breaks of at least five consecutive days, or days in which the student was on an approved leave of absence.

Order of Fund Return

If the College determines the need to return some portion of federal aid funds, federal funds will be returned in the following order:

  • Federal Unsubsidized Direct Loans
  • Federal Subsidized Direct Loans
  • Federal Direct PLUS (Parent) Loan
  • Federal Pell Grant
  • Federal Supplemental Educational Opportunity Grant (FSEOG)

Disbursement of Aid After Withdrawal

If the Return of Title IV calculations shows that the College can pay additional federal aid funds to the student due to the student having aid offered that was not disbursed at the time of withdrawal, we will send notice of this additional aid option to the student and/or parent in the case of a Federal Parent PLUS Loan, within 30 days of when the College determined the student withdrew.

 

References: Tuition Refund Policy
 

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