The law specifies how Flashpoint Chicago must determine the amount of Title IV program assistance that has been earned if a student withdraws from school. The Student Accounts Office will perform a Return of Title IV Funds calculation when a federal student financial aid (Title IV) recipient withdraws or is dismissed from his/her program. This process ensures that the institution correctly calculates the amount of federal student financial aid earned by the student and returns any unearned funds back to the respective federal student financial aid program(s). In some cases, the student will be required to return unearned Title IV funds. In addition, the Return of Title IV process may result in the student owing the school for unpaid tuition and fees. A student may inform Flashpoint at any time to withdraw. It is highly recommended that the student speak with his/her Financial Aid Advisor, the Registrar, and Student Services prior to withdrawing to gain an understanding of the implications of that decision.
The portion of Title IV funds a student is allowed to retain is calculated on a percentage basis by comparing the total number of days completed in the semester, before the student withdrew from the program, to the total number of days in the semester.
For example, if the student withdrew on the 18th day of a semester that has 120 days, the student has completed 15% of the semester and has therefore earned 15% of the federal student financial aid that was disbursed or could have been disbursed. This means that 85% of the aid that was disbursed or could have been disbursed remains unearned and must be returned to the federal student financial aid program(s). The numerator and the denominator include weekend days but not scheduled breaks of five consecutive days or more. A student earns 100% of federal financial aid once he or she has completed more than 60% of the semester.
If the amount of aid disbursed to the student is greater than the amount of aid earned by the student, the unearned portion must be returned to the federal student financial aid program(s). In returning unearned funds, Flashpoint is responsible for returning the portion of the excess equal to the lesser of the institutional charges for the semester multiplied by the unearned percentage of funds, or the entire amount of excess funds.
A student may be required to return excess unearned Title IV funds. However, if the excess unearned funds consist of Title IV loans, then the student repays the loan(s) in accordance with the terms and conditions of the promissory note. If the excess unearned funds consist of a Title IV grant, the student is required to repay only the portion which exceeds 50 percent of the amount of grant received.
If the amount of aid disbursed to the student is less than the amount of aid earned by the student, a post-withdrawal disbursement may be available to assist the payment of any outstanding tuition and fee charges on the student’s account. The post-withdrawal disbursement will be made from Title IV grant funds before available Title IV loan funds. If part of the post-withdrawal disbursement is a grant, the institution may apply the grant funds to tuition and fees or disburse the grant funds directly to the student.
If a student is eligible to receive a post-withdrawal disbursement from Title IV loan funds, the student (or parent in the case of a PLUS loan) will be asked for his/her permission to either disburse the loan funds to the student’s account to reduce the balance owed to the institution, or disburse the excess loan funds directly to the student. Flashpoint has 30 days from the date of Flashpoint’s determination the student withdrew to offer the post-withdrawal disbursement of a loan to the student (or the parent in the case of a PLUS loan). The student (or parent) has 14 days from the date Flashpoint sends the notification to accept the post-withdrawal disbursement in writing. If the student accepts the post-withdrawal disbursement, Flashpoint will make payment as soon as possible, but no later than 180 days from the student’s withdrawal date. No portion of the post-withdrawal disbursement of loan funds will be disbursed if the student (or parent) does not respond to Flashpoint’s notification.
Once the unearned portion of the return of funds has been calculated, the Student Accounts Office will return the aid to the appropriate federal student financial aid program(s) within 45 days of the date of determination that the student withdrew. The order of return is specified below. The unearned funds will be “charged back” to the student’s tuition account, and this may result in unpaid tuition and fees. The students will then be billed for any unpaid institutional charges that result from the return of funds to the Title IV programs, and will be responsible for full payment. A student will not be allowed to re-enter, register, or receive an official academic transcript until the outstanding balance has been paid in full.
Unearned Title IV funds will be returned to the federal student aid programs in the following order:
- Unsubsidized Direct Loan
- Subsidized Direct Loan
- Direct PLUS
- Federal Pell Grant
- Federal Supplemental Opportunity Grant