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Return to Title IV (R2T4) Policy

Return of Federal Financial Aid Policy

Student who receive federal financial aid (Pell and/or Stafford loans) and do not complete their program could be responsible to repay a portion of the aid received according to federal law.  The following information will help you understand what could happen if you withdraw from, stop attending classes, or are dismissed before the end of the program for which you are receiving federal financial aid.  Students may be required to repay Pell grant/Student loan funds received in addition to any funds required to be returned by the school.

What is the Law?

Federal law requires school to calculate how much federal financial aid (Title IV Funds) a student has earned if he/she leaves school before completing the class within 45 days of the original drop.  Mid-East CTC Adult education will determine this calculation and return funds or make a post-withdrawal disbursement within the 45 day period.

Who is affected by this regulation?

This regulation applies to any student who receives federal financial AND who withdraws, stops attending or is dismissed from classes prior to reaching the 60% completion point of a class payment period and is based on scheduled hours. 

How do I earn my financial aid?

Aid is earned by the student by staying in class and completing clock hours scheduled.  The percentage of Title IV financial aid earned by the student is proportionate to the number of hours the student remains enrolled.  The percentage of Title IV funds to be returned is equal to the number of clock hours attended in a payment period divided by the number of hours that were scheduled to the last date of attendance.  For example, if a student has completed 30% of the payment period they have earned 30% of their financial aid and a portion of the aid he/she has received will be returned to the U.S. Department of Education.  However, once a student has completed more than 60% of the hours in a payment period, 100% of the financial aid awarded that payment period will have been earned.

Calculations & Post/withdrawal Disbursements

Mid-East CTC Adult Education will use the official withdraw date or last date attended (see withdrawal policy) to complete the R2T4 calculations to determine whether funds need to be disbursed or returned.  In most cases, only refunds will be completed; however, in the event that funds are not drawn before a student drops and aid is earned a post withdrawal disbursement will have to be completed.  If a student is receiving only Pell Grant funds in a post withdrawal disbursement Mid-East will automatically draw funds on behalf of the student within 30 days of the determination.  If loan funds are a part of the post withdrawal, the student’s consent in writing must be present in order to draw funds.  This notification will include borrower rights, all aid that is eligible to be disbursed, amount owed to the school and the amount student will have to pay if disbursement is rejected.  

The calculation of Title IV funds earned by the student has no relationship to the student’s incurrent institutional charges.  (See Refund Policy and Payment of Account Charges).

Order of Return of Title IV Funds:

Funds that are required to be returned to the U.S. Department of Education must be returned in the following order.  1.  Unsubsidized loans; 2. Subsidized loans: 3. Direct PLUS loans; and 4. Pell Grants

Example:  The 1st payment period is 450 hours or half of the total program hours.  The student received $3098 in Pell and $5500 Student Loan money for that period.  The student attends 50% of the 1st payment period or 225 in this case and drops the program.  The student would only be eligible for 50% of the amount of aid they were eligible for in the beginning because they only attended 50% of the time.  So the balance of $1549 Pell and $2750 of student loans would have to be returned to the U.S. Department of Education and all further loans disbursements would be canceled.  If the student had attended through hour 275, then the percent of earned aid is 61% and the student would have been eligible for all of the original aid for that payment period.

The student will be responsible for any outstanding balances owed Mid-East CTC – Adult Education that Title IV (financial aid) funding did not cover after R2T4.  Upon request, worksheets used to determine the amount of refund or R2T4 are available in Financial Aid Office.