Return of Title IV (Federal) Financial Aid
When a student withdraws during a term, the amount of federal financial aid earned by the student is determined on a pro-rata basis up to the end of 60% of the term. For example, if the student has completed 30% of the term, he or she has earned 30% of the aid originally scheduled to be received. Once a student has completed more than 60% of the term, he or she has earned all of his or her federal financial aid. (Federal Work Study funds are excluded from the return of Title IV funds requirements.)
If a student has received excess funds, the College must return a portion of the excess equal to the lesser of:
If the aid to be returned is in the form of a loan that has been released to the student (or parent) borrower, the student (or parent) can repay the loan in accordance with the terms of the promissory note over a period of time.
If the aid to be returned is in the form of grant funds, the law provides that the student may repay 50% of the grant rather than 100%.
Order of Funds to be Returned
The funds must be credited to outstanding loan balances or to any amount awarded for the term in which a return of funds is required in the following order:
Refund of Funds from the Illinois Student Assistance Commission Monetary Award Program (MAP)
Per the rules of the Illinois Student Assistance Commission, if a MAP recipient withdraws after the census date (the end of the second week of the term), the student may receive MAP grant payment for the costs incurred up to the term award provided the college’s tuition refund policy indicates that the student has incurred charges in the amount of the claim.
Refund of Institutional Financial Aid
Institutional financial aid consists of Knox Grant, Knox Scholarships and Knox Loans. The refund/cancellation of institutional financial aid follows the pro-rata policy for the cancellation of institutional charges. When a student withdraws by the end of 60% of a term, a pro-rated portion of her or his institutional financial aid is returned to the program(s) from which the student received funds. After 60% of a term has been completed, there is no cancellation of financial aid.
Refund of Private Scholarships, Grants and Loans
Unless otherwise requested by the donor or a private scholarship, grant or loan award, the refund/cancellation of private financial assistance follows the pro-rata policy for the cancellation of institutional charges and institutional financial aid.
Example of a Refund and Return of Title IV Financial Aid
Student enrolls for Fall Term, beginning on September 8, 2011 and ending on November 22, 2011 (76 days). Student withdraws from all courses on October 11, 2011.
Total Charges for Tuition, Fees, Room and Board $13,984
September 9 to October 11(withdrawal date)
= 34 days/76 days in term = 44.7% of the term
Pro-rata charges: 44.7% x $13,984 = $6,251
Refund/cancellation of charges = $13,984 - $6,251 = $7,733
Return of Title IV Aid Calculation
Step 1. Title IV Aid Disbursed on September 20, 2011:
Subsidized Direct Loan $ 1,824
Unsubsidized Direct Loan $664
Total aid disbursed $2,488
Step 2. Percentage of Title IV Aid Earned:
34 days of enrollment/76 days in term = 44.7%
Step 3. Amount of Title IV Aid Earned: 44.7% x $2,488 = $1,112.14
Step 4. Total Title IV Aid to be Returned: $2,488 - $1,112.14 = $1,375.86
Step 5. Amount of Unearned Title IV Aid Returned by the School:
Subsidized Direct Loan $711.86
Unsubsidized Direct Loan $664
Total Title IV aid returned to federal programs $1,375.86