RETURN OF TITLE IV FUNDS

Federal statute requires a recalculation of aid eligibility when a recipient of financial aid withdraws from the University of Nebraska at Kearney.

The "Return of Title IV Financial Aid " requirement is based on the amount of federal financial aid received, the University charges incurred and the date of withdrawal. If a student received more assistance than earned, the excess funds must be returned. The amount of assistance earned is determined on a pro-rata basis. That is, if a student completed 30% of the semester, then the student has earned 30 % of the financial aid he was originally scheduled to receive. Once a student has completed more than 60% of the semester all of the assistance is considered "earned."

The official date of withdrawal is the date indicated on UNK's official withdrawal form at the Office of Registration and Records. However, if a student remains enrolled but fails to pass any classes, the calculation must be done in accordance with federal statute when an official withdrawal date is not available. Therefore, failing to officially withdraw does not result in the waiving of the requirement to return Title IV Financial Aid.

If a student's University charges are reduced as a result of withdrawal, and that withdrawal creates a credit balance on the student account, the funds reflected in that credit balance may be used to repay the federal financial aid programs. If the credit balance does not cover the amount due back to the aid programs, the student will be billed the difference. If the student owes back to the Pell or SEOG programs, the student has 45 days to make repayment to the University or be reported to the U. S. Department of Education as a student who owes an over payment. Owing an overpayment to the U.S. Department of Education means that student will no longer be eligible for federal financial aid at any school until it is paid in full.

Federal statute determines the order in which programs will be paid back.

1. Unsubsidized Federal Stafford Loan
2. Subsidized Federal Stafford Loan
3. Perkins Loan
4. Parent Loans for Undergraduate Students (PLUS)
5. Federal Pell Grant
6. Federal Supplemental Equal Opportunity Grant (SEOG)
7. Nebraska State Grant
   

Below is an Example of the Return of Title IV Funds Calculation.

1. Establish the withdrawal date and calculate the percentage of aid the student may retain.
   • * John withdraws on 9/24/2005.
   • * 9/24/2005 is 29 days into the semester, which is 116 days long. Therefore, he has completed 25% of the semester.
   • * This means that he may keep 25% of the aid awarded to him, however 75% must go back to the aid programs. (If the percentage of aid a student may retain is at 60% or more, all aid is retained.)
2. Calculate the percentage of unearned aid.
   • * John received $2,668 in Title IV aid.
   • * 75% of $2,668 in financial aid must be returned: $2,001.
3. Calculate the maximum percentage of cost that the school may have to return.
   • * John's bill for the Fall of 2005 was $1,276
   • * 75% of the cost, $1276, is $957.
4. Calculate the amount of aid the school must return.
   • * The school then returns the lesser of $957 (percentage of cost) or $2,001 (percent of unearned financial aid) to the aid programs.
   • * The school returns $957 on John's behalf.
5. Aid the student must personally return.
   • * John's grant aid is returned on his behalf by the school and therefore becomes part of the bill that must be repaid to the school. Failure to pay this would result in reporting to the Department of Education as an overpayment.
   • * The balance of John's loan not paid by the school will go into repayment in accordance with the terms of the promissory note.