How Receipt of Federal Title IV Funds Affects Student Refunds

(Pell, Direct Student Loans, Perkins Loans, Nursing Loans, and SEOG)

In accordance with the Higher Education Amendments of 1998, a portion of Title IV grant or loan funds, but not Federal Workstudy Funds, must be returned to the Title IV Program upon a student’s withdrawal from school. The law does not specify an institutional refund policy. This may result in a student incurring a liability to SUNY Poly after the Title IV funds are returned.

Withdrawal Date

Regulation requires SUNY Poly to determine a withdrawal date from the student’s official notification to the institution. For unofficial withdrawals (dropping out without notification), the withdrawal date becomes the last day we can document, you participated in an academic activity or the midpoint of the semester. If circumstances beyond the student’s control (illness, accident, grievous personal loss) caused the unofficial withdrawal, and can be documented, SUNY Poly may use discretion in determining an appropriate withdrawal date.

Earned Title IV Aid

Regulation provides a formula for the calculation of the amount of Title IV aid that the student has “earned” and SUNY Poly may retain. This depends on the percentage of the enrollment period that the student has completed up to withdrawal. This percentage is calculated by dividing the number of calendar days (not weeks) completed by the total number of calendar days in the period. Up through the 60% point of the enrollment period, the student is eligible for the actual percentage of aid this calculation provides. For example, if a student attends for 15 days out of a 75 day semester, he/she is eligible for 20% of their total Title IV aid package (15/75 = .20). After the 60% point of the semester, 100% of the Title IV aid is considered “earned” by the student. The earned percentage is applied to the total amount of Title IV grant and loan assistance that was disbursed (and could have been disbursed) to the student.

Application of Unearned Percentage

Any amount in excess of the allowed percentage must be returned to the appropriate Title IV program by SUNY Poly, the student, or both. SUNY Poly must return the lesser of the unearned Title IV assistance or an amount equal to the total liability incurred by the student multiplied by the unearned percentage. Using the above example, if a student had received $1,000 in Title IV loans and grants, and $500 had been applied to the account and $500 had been applied to the student, the earned portion of the aid package is $200 (.2 x $1000) and the unearned portion is $800 (.8 x $1000). $800 must be returned to the Title IV programs. Of this $800, $500** must be returned by SUNY Poly. This may result in the student owing SUNY Poly a substantial amount of money.

** $500 is the lesser of $500 vs $1590. ($1987.5 tuition x .8 unearned % applied to institutional costs = $1590)

Student Responsibility

Students should contact the financial aid office to determine how much of their federal aid they may have to repay the school before they withdraw.

Special Rule

The student would not need to repay amounts in excess of 50% of any grant monies received. If the $300 the student was to return came from a Pell disbursement, the student would only need to return $150, or not more than 50% of the grant funds received.

Order of Return of Title IV Funds

Title IV Funds must be returned in the following order:

  • Unsubsidized (other than parent loans) Federal Direct Loans
  • Subsidized Federal Direct Loans
  • Federal Perkins Loans
  • Federal Direct PLUS Loans
  • Federal Pell Grants
  • Academic Competitiveness Grand
  • SMART Grant
  • Federal SEOG
  • Other Title IV assistance for which a return is required

Leaves of Absence

A leave of absence is not to be treated as a withdrawal and no return of Title IV funds is calculated. A student may take a leave of absence from school for not more than a total of 180 days in any 12-month period. SUNY Poly’s formal leave of absence policy must be followed in requesting the leave. The leave must be approved by SUNY Poly in accordance with this policy. However, if the student does not return at the expiration of an approved leave, then SUNY Poly calculates the amount of Title IV grant and loan assistance that is to be returned according to the HEA provision based on the day the student withdrew.