Return of Title IV Funds is a federally mandated policy that applies only to students who receive federal financial aid and who withdraw, drop out, are dismissed, or take a Leave of Absence prior to completing 60% of a term. The Return of Title IV Funds policy does not apply to students who reduce their units and remain enrolled. Return of Title IV Funds will be used to determine how much aid, if any, must be returned to Title IV programs.
The Title IV funds considered in the policy are the
- Direct Unsubsidized Loan
- Direct Subsidized Loan
- Direct PLUS Loan
- Pell Grant
- Iraq & Afghanistan Service Grant
The policy does not apply to the Federal Work Study program.
The Return of Title IV funds calculation identifies two types of federal aid, earned and unearned. The earned aid is based on a percentage calculated by dividing the number of days the student completed by the number of days in the payment period. A student who remains enrolled beyond the 60% point earns all disbursed (received) and disbursable aid. Disbursable aid includes aid received and the aid that could have been (but was not) disbursed as of the withdrawal date. If earned aid exceeds disbursed aid, a post withdrawal disbursement may be made.
CalArts will first credit post-withdrawal disbursement not credited to school charges. Within 30 days of determination that the student withdrew, the student will be provided with a written notification of any post-withdrawal funds that are available to the student. No post-withdrawal disbursement will be made if the student does not respond within 14 days of the notification date. Unearned aid is any disbursed aid that exceeds the amount of Title IV aid the student earned. The unearned aid amount is to be returned to the U.S Department of Education, a responsibility shared by CalArts and the student. This may create a balance owed on a student’s tuition billing account. The student is responsible to pay the amount owing on their billing account.
This policy is based on 34 CFR, Section 668.22 of Title IV of the Higher Education Act of 1964, as amended. The formula is prescribed in Section 484(b). Any recipient of Title IV federal student financial aid, who withdraws or does not complete the term, must complete a clearance process, including a financial aid exit interview for students who have received educational loan assistance. The clearance and exit interview will explain students’ rights and responsibilities as they pertain to tuition refunds, financial aid refunds and return of Title IV funds and educational loans. New student deposits become tuition paid as of the first day of class and will be treated accordingly in any refund calculations. Any refund calculated must be returned first to the Title IV programs.
Refunds are allocated in the following order:
- Direct Unsubsidized Loan
- Direct Subsidized Loan
- Direct PLUS Loan
- Pell Grant
- Iraq & Afghanistan Service Grant
Treatment of Title IV Aid When a Student Withdraws: Disclosure
The law specifies how your school must determine the amount of Title IV program assistance that you earn if you withdraw from school. The Title IV programs that are covered by this law are Federal Pell Grants, Iraq and Afghanistan Service Grants, TEACH Grants, Direct Loans, Direct PLUS Loans, and Federal Supplemental Educational Opportunity Grants (FSEOGs).
Though your aid is posted to your account at the start of each period, you earn the funds as you complete the period. If you withdraw during your payment period or period of enrollment (your school can define these for you and tell you which one applies to you), the amount of Title IV program assistance that you have earned up to that point is determined by a specific formula. If you received (or your school or parent received on your behalf) less assistance than the amount that you earned, you may be able to receive those additional funds. If you received more assistance than you earned, the excess funds must be returned by the school and/ or you.
The amount of assistance that you have earned is determined on a pro rata basis. For example, if you completed 30% of your payment period or period of enrollment, you earn 30% of the assistance you were originally scheduled to receive. Once you have completed more than 60% of the payment period or period of enrollment, you earn all the assistance that you were scheduled to receive for that period.
If you did not receive all of the funds that you earned, you may be due a post-withdrawal disbursement. If your post-withdrawal disbursement includes loan funds, your school must get your permission before it can disburse them. You may choose to decline some or all of the loan funds so that you don’t incur additional debt. Your school may automatically use all or a portion of your post-withdrawal disbursement of grant funds for tuition, fees, and room and board charges (as contracted with the school). The school needs your permission to use the post-withdrawal grant disbursement for all other institutional charges. If you do not give your permission (some schools ask for this when you enroll), you will be offered the funds. However, it may be in your best interest to allow the school to keep the funds to reduce your debt at the school.
There are some Title IV funds that you were scheduled to receive that cannot be disbursed to you once you withdraw because of other eligibility requirements. For example, if you are a first-time, first-year undergraduate student and you have not completed the first 30 days of your program before you withdraw, you will not receive any Direct Loan funds that you would have received had you remained enrolled past the 30th day.
If you receive (or your school or parent receive on your behalf) excess Title IV program funds that must be returned, your school must return a portion of the excess equal to the lesser of:
1. your institutional charges multiplied by the unearned percentage of your funds, or
2. the entire amount of excess funds.
The school must return this amount even if it didn’t keep this amount of your Title IV program funds.
If your school is not required to return all of the excess funds, you must return the remaining amount.
For any loan funds that you must return, you (or your parent for a Direct PLUS Loan) repay in accordance with the terms of the promissory note. That is, you make scheduled payments to the holder of the loan over a period of time.
Any amount of unearned grant funds that you must return is called an overpayment. The maximum amount of a grant overpayment that you must repay is half of the grant funds you received or were scheduled to receive. You do not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. You must make arrangements with your school or the Department of Education to return the unearned grant funds.
The requirements for Title IV program funds when you withdraw are separate from any refund policy that your school may have. Therefore, you may still owe funds to the school to cover unpaid institutional charges. Your school may also charge you for any Title IV program funds that the school was required to return. If you don’t already know your school’s refund policy , you should ask your school for a copy. Your school can also provide you with the requirements and procedures for officially withdrawing from school.
If you have questions about your Title IV program funds, you can call the Federal Student Aid Information Center at 1-800-4-FEDAID (1-800-433-3243). TTY users may call 1-800-730-8913. Information is also available on Student Aid on the Web at https://studentaid.ed.gov/sa/.
There are two types of withdrawals, official withdrawals and unofficial withdrawals.
The official withdrawal date is determined by the Registrar’s Office based on when a student drops all of their classes, or notifies a CalArts official of their intent to withdraw.
Unofficial withdrawals are students who failed all of their classes per the grades reported at the end of each semester.
Following the conclusion of the term, the financial aid staff will review grades and determine if a R2T4 calculation is required.
An “unofficial withdrawal” occurs when a student stops attending all classes and stops participating in any academic activities beyond the date they last attended classes. Students may be administratively withdrawn from the Institute in cases where their non-attendance (unofficial withdrawal) has been confirmed by all currently assigned faculty. The decision to administratively withdraw a student is made by the Vice President for Student Experience (or designee), in collaboration with the student’s School and the Registrar.
- Determination of Actual Unofficial Withdrawals
Faculty and/or Mentors can submit Care Reports for students who have ceased attending classes or participating in academic activities, and/or contact the Director of Care and Well-being or Office of the Registrar directly. The Director of Care and Well-being in partnership with the Registrar, will conduct an attendance audit with the faculty and School. The student’s last date of attendance will be confirmed by the Registrar, and the student will be administratively withdrawn.
B. Determination of Potential Unofficial Withdrawals
At the end of the semester/session when final grades have been recorded, the Office of the Registrar will run a report to identify students whose grades for the term are all NC, I or a combination of NC, I, and W grades. At the end of the semester the CalArts Financial Aid staff will review the list and evaluate each student to determine whether the student should be considered to have unofficially withdrawn. Follow up with the faculty and/or Registrar may be required to determine whether or not a student ceased attendance in all classes.
C. Last Date of Attendance
- The last date of attendance for W grades is generally the withdrawal date. When a NC grade is recorded, the faculty must supply the last date of attendance.
- Faculty are to participate in the Registrar’s attendance audit. This allows the registrar to maintain accurate records while complying with federal financial aid requirements.
Unless otherwise specified by the Vice President for Student Experience (or designee), any decision to administratively withdraw a student will take immediate effect. However, this decision is subject to automatic review within seven days by the Provost (or designee), including the Institute Diversity Officer. Should students choose to challenge the administrative withdrawal decision, they may do so through the Student Grievance Procedure, but the initiation of a grievance will not delay the effective date of the withdrawal.
Students who are administratively withdrawn may pursue readmission under the same guidelines detailed above.
If you need to withdraw from all of your classes, you should to speak to a financial aid advisor before doing so to determine how it may affect your financial aid and your Satisfactory Academic Progress. If you have any questions about your Title IV program funds, contact the CalArts Financial Aid Office.
Treatment of Title IV Aid When a Student Withdraws
Unofficial Withdrawals and how it impacts your Financial Aid
Per federal regulations, schools are required to review students who received federal financial aid and did not pass any classes. An assessment must be made to determine whether the student earned the non-passing grades while attending classes or stopped attending classes but did not officially withdraw. Students who stopped attending classes may be required to repay a portion of the federal financial aid for that semester. If it is determined that a student never began attendance in some or all classes, aid may be canceled completely. The review process must be completed within 30 days after the end of each semester.
If a student follows Institute procedures and withdraws, they will have an official withdrawal date and their financial aid refund calculation will be completed according to the CalArts Return to Title IV policy.
At the end of each semester, all federal financial aid recipients who receive no passing grades will be reviewed to determine if the non-passing grade was earned while attending or due to no longer attending class. The CalArts Financial Aid office receive the Last Date of Attendance from the Registrar to determine how much aid needs to be returned.
Any refund owed to a federal financial aid program is the student's responsibility and will appear as a charge on the student's next CalArts bill.
The bottom line is to make sure you attend and participate in your classes! If you have any concerns about your courses please be sure to contact your academic advisor.
This policy is in accordance with Federal financial aid regulations published in the November 1, 1999 Federal Register, volume 64, number 210, section 668.22 and DCL GEN-04-03 Revised published November 2004.