Return of Title IV Financial Aid When A Student Withdraws

If a student totally withdraws from GCC or quits attending classes before 60% of the semester payment period has passed, the student will need to pay a portion of the financial aid back to GCC and/or the federal financial aid programs.  This also applies to students who have received all unearned "F's" for the enrolled courses for the semester.

The law specifies how GCC must determine the amount of Title IV program assistance the student earns if the student withdraws from school. The Title IV programs administered by GCC covered by this law include: Federal Pell grants, Federal Educational Opportunity (SEOG) grants, Federal Direct loans, and Federal PLUS loans. The students are made aware of this policy by e-mail at the beginning of each semester.  The policy is also in the school catalogue.

The amount of Title IV program assistance earned is determined by a specific formula when a student withdraws during a payment period. Upon request, the formula will be provided to the student. If the student received more assistance than what was earned, the excess funds must be returned. The amount will be calculated by the GCC Financial Aid Director using the software provided by the U.S. Department of Education and the student will be notified by mail of any repayment obligations as well as any amount GCC has returned to the loan program.  The Director of Financial Aid calculates the total number of days in the payment period after reviewing the academic calendar provided by the Dean of Faculty. The software automatically determines the percentage of Title IV aid earned, the amount of Title IV aid earned by the student, the amount of Title IV aid to be disbursed or returned, the return of funds by GCC, the initial amount of unearned Title IV aid due from the student, the repayment of the student's loans, the amount of grant funds to be returned and the return of grant funds by the student.

If a student withdraws before 60% of the payment period has passed, GCC must always return a portion of the aid received for tuition/fees, books and campus housing, if applicable. The student may also have a financial obligation to repay a portion of financial aid back to the various federal programs for any educational costs in which financial aid was received. The amount the student owes to GCC for returning of the federal funds will be 50% of the total federal funds returned by GCC or the amount of the student's expense check, whichever is larger, not to exceed the returned amount.  In addition, the student is responsible for any outstanding charges the student may have owed GCC prior to the return calculation. The Dean of Students, along with other committee members  will hear any appeals the student may have regarding the amount of money the student owes GCC.

Student loan funds received are paid in accordance with the terms of the promissory note. The student would make the scheduled payment to the holder of the loan over a period of time. There are cases when GCC returns a portion of the loan funds to the federal loan program. The student may be billed for loan funds the school was required to return, thus owing less to the holder of the loan, but accruing a debt to GCC. The student is notified, in writing, of the amount GCC returned to the program.

There are some Title IV funds the student may have been scheduled to receive, but GCC cannot disburse the funds once the student withdraws because of other eligibility requirements. For example, if the student is a first-time, first-year student and has not completed the first 30 days of the term before withdrawal, federal loan funds cannot be disbursed as a post-withdrawal disbursement.

Order of the Return of Title IV Funds

GCC returns funds in the following order: Federal Unsubsidized Direct Loan, Federal Subsidized Direct Loan, Federal Direct PLUS Loan, Federal Pell Grant and SEOG Grant. The funds are returned as soon as possible, but no later than 45 days from the determination of the student's withdrawal. The funds are returned electronically by the Director of Financial Aid by updates to COD. The Dean of Business also updates through G5.

Example of a Return of Title IV Refund Calculation

Example:  27 completed days of 110 total days = 25% of Title IV aid earned

The GCC Financial Aid Director determines the percentage of Title IV aid the student earned by taking the calendar days completed in the payment period and dividing by the total number of calendar days in the payment period (excluding breaks of 5 days or more).

If the percentage is greater than 60%, the student earns 100% of the disbursed Title IV aid  or aid that could have been disbursed.  The student and GCC do not owe a repayment.

If the percentage is less than 60%, the percentage earned is equal to the calculated dollar amount earned.  The student and GCC may owe a repayment of the Title IV aid.

Example:  25% x $1800 (disbursed) = $450.00 (Title IV aid earned)

The GCC Financial Aid Director determines the dollar amount of the Title IV aid the student earned by multiplying the percentage of the Title IV aid earned by the total of the Title IV aid disbursed plus the Title IV aid that could have been disbursed for the payment period.

Example:  100% - 25% = 75% (unearned Title IV aid)

                    75% of $1,800 = $1,350 (unearned Title IV aid)

The Title IV aid to be returned is equal to the percentage of unearned Title IV aid multiplied by the amount of aid disbursed toward institutional charges.

GCC would return the $1,350 of the unearned funds and charge the student 50% of this amount or the amount of the student's expense check, whichever is greater, not to exceed the return of funds by GCC.  This amount would not exceed the $1,350 unless the student owed GCC an outstanding balance prior to the refund calculation.

Funds are returned to the appropriate federal program based on the percentage of Title IV aid earned and the order of return dictated by the Department of Education.

All the Title IV aid fund returns must be completed no later than 45 calendar days after the date the Financial Aid Director determines the student withdrew.

The student normally owes a balance to GCC when the student withdraws and a refund is required to be calculated.


Post-Withdrawal Disbursement

If the student receives less Title IV aid than the amount earned, GCC will offer a disbursement of the earned aid not received. This is called a post-withdrawal disbursement.  Any post-withdrawal disbursement due must meet the current required conditions for a late disbursement.  A post-withdrawal disbursement must be made within 180 days from the date the institution determines the student withdrew.  The post-withdrawal disbursement is made from available grant funds before available loan funds.  GCC will credit the student's account with the post-withdrawal disbursement of Title IV grant funds without the student's permission for current charges for tuition, fees and room (if the student is staying in on-campus housing) up to the amount of the outstanding charges.  GCC will obtain the student's authorization to credit the student's account with the Title IV grant funds for charges other than the current charges.  GCC will disburse any amount over the direct charges to the student within 45 days after the date GCC determines the student withdrew.

GCC will notify the student or the parent (PLUS), in writing prior to making any post-withdrawal disbursement of loan funds whether those loan funds are to be credited to the student's account for outstanding charges or paid directly to the student.  GCC needs the permission of the student or the parent before any post-withdrawal of the loan funds can be made.  The notice will identify the type and the amount of loan funds it wishes to credit to the student's account or disburse directly to the student or the parent and an explanation of the student or the parent right to accept or decline the post-withdrawal disbursement.  The notice also explains the student or the parent obligation to repay the loan funds whether they are disbursed to the student's account or directly to the borrower. The student and the parent will not receive the funds directly if they owe an outstanding balance to GCC.  If they refuse to have the loan funds credited to the account, GCC will not make the disbursement.  GCC also informs the student about keeping the loan debt to a minimum.  The notice is provided within 30 days of the date GCC determines the student withdrew.

GCC documents the results of the notification process and the final determination of the disbursement in the student's file.

Registration of Classes

Students are required to register for all classes prior to the first Friday of the semester. If the student registers for classes after this date, the classes will not be included in the student's enrollment status for financial aid purposes. If the student withdraws from a modular class beginning later in the semester and never begins attendance in the class, the student's financial aid will be adjusted to reflect the new enrollment status. This situation normally places the student in a repayment status and the student will be required to repay any overpayment of financial aid received for the course(s) withdrawn from.

If a student fails to begin attendance in any class, the class will not be counted in the student's enrollment status for financial aid purposes and may result in the student paying a portion of financial aid back to the financial aid program. Repayment can occur at any time during the academic year depending on the receipt of this information by the GCC Financial Aid Office. All adjustments are made prior to the return of Title IV refund calculations.

Modular Classes

A student is considered to have withdrawn, for Title IV purposes, if the student ceases attendance at any point prior to completing the payment period, unless GCC obtains written confirmation from the student, at the time of the withdrawal, regarding attendance in a module beginning later in the same payment period.  If a student completes a modular class, never begins attendance in other modular classes and does not provide written confirmation, the student is considered a withdrawal. The student would not be considered a withdrawal if the student was still enrolled in a semester long course.

Withdrawal Date

The withdrawal date is the date the student began the withdrawal process or officially notifies GCC in writing or verbally of the intent to withdraw. If a student does not provide official notification of the intent to withdraw because of illness, accident, grievous personal loss or other such circumstances, the withdrawal date will be determined in relation to the circumstance. The midpoint of the period may also be used as the withdrawal date for unofficial withdrawals. GCC may always, at its option, use the student's last date of attendance at a documented academically related activity in lieu of any other withdrawal date.

The withdrawal date is determined by the following:

  • The Financial Aid Office may receive an official withdrawal form directly from the student or from the Dean of Students Office.
  • The student may verbally inform the Financial Aid Office of the intent to withdraw or
  • A faculty member may indicate the student's absence from class which would require follow-up with the student and/or the Dean of Students Office.

GCC does not have a formal leave of absence policy.

The requirements for Title IV program funds when a student withdraws are separate from GCC's refund policy. Therefore, the student may owe funds to GCC to cover unpaid institutional charges. GCC also charges students for Title IV program funds GCC was required to return.

GCC reserves the right to withhold services, including the issuing of academic transcripts, from a student who has not satisfied financial obligations.