Return of Title IV Funds
Recipients of federal financial aid funds that withdraw from classes prior to completion of 60 percent of the term will be required to repay a portion of funds received as defined by federal regulations. Students who are enrolled for the entire term but fail to successfully complete any classes may be required to repay a portion of the funds received.
East Tennessee State University (ETSU) pays directly to the USDOE the amount owed back by the student. It is then the responsibility of the student to pay back the University for any amount paid directly to the USDOE on their behalf. Students must repay ETSU for any funds returned to the U.S Department of Education on their behalf in order to remain eligible for aid and to re-enroll in subsequent semesters.
Occurs when students drop/withdraw from all classes. Students may drop classes on GoldLink or a withdrawal could be in writing and addressed to the Registrar’s Office in Burgin Dossett Hall, Room 101. Any student who notifies an office of their intent to withdraw must be informed they must make written notification to the Registrar.
When students drop/withdraw from all classes, the Office of Financial Aid must calculate how much aid students are entitled to keep. Per the federal guidelines, students are allowed to keep the amount financial aid they have “earned” up to the time of withdrawal. Students “earn” financial aid with class participation. The date of withdrawal for official withdrawals is determined by one of the following methods:
Occur when students cease attendance in all registered classes for a specified term, but do not complete the official withdrawal procedures. The date of withdrawal for unofficial withdrawals is determined by one of the following methods:
- Midpoint date of the period for a student that stops attending all classes without notifying the University; or
- Student’s last date of attendance at a documented academically-related activity as reported to faculty
For veterans receiving veteran’s benefits the date of withdrawal will be the last date of attendance or date of the last documented academically-related activity. The withdrawal date for students who withdraw prior to the census date is the last date of attendance or date of the last documented academically-related activity.
When a student withdraws from ETSU, he or she generally becomes ineligible for future disbursements of federal financial aid. In some cases, however, funds earned prior to withdrawal can be offered to the student through a post-withdrawal disbursement (PWD).
A PWD is offered to a student — or parent in the case of a Parent PLUS loan — if, prior to withdrawing, the student earned more federal financial aid than was disbursed for the payment period. The amount earned is determined as part of the required federal Return of Title IV Funds calculation.
If any of the following conditions below have been met the aid will be included in the “Aid That Could Have Disbursed” section of the calculation to determine if a PWD is due.
a. Federal Pell Grant – ISIR received date with an “official” EFC preceded the withdrawal date and the student meets all other eligibility criteria.
b. FSEOG – Aid was awarded prior to withdrawal date.
c. Direct Plus, Subsidized, and Unsubsidized Loans – Loan had originated prior to withdrawal date and Master Promissory Note and Entrance Counseling was completed prior to the Return of Title IV calculation date.
If a student is eligible for a PWD of grant funds, ETSU will apply the grant funds towards outstanding current term charges for tuition, fees, and room and board (if living on-campus) up to the amount for the allowable charges. Any grant funds remaining in excess of current charges, will be paid directly to the student. The student will be notified within 30 days of the date of determination of withdrawal of the PWD. A refund will be sent as soon as possible, but no later than 45 days from the date ETSU determined the student withdrew (officially or unofficially).
If a student or parent (Parent Plus Loan) is eligible for a PWD from Title IV loan funds the student/parent will be notified within 30 days of the date of determination of withdrawal that loan funds are available. The student/parent will be given the opportunity to accept, decline or reduce the amount of the loan. The student/parent is asked to return the Post-Withdrawal Disbursement Confirmation form within 14 days indicating whether he/she wishes to receive the aid, and if so, the amount. If no confirmation is received by the deadline, the loan will be canceled with the U.S. Department of Education.
Students can choose to accept only the amount for the balance due to the University or, if eligible, to accept a larger amount that will result in excess funds being disbursed. It is important to understand that accepting a PWD of loan funds will increase the overall student loan debt that must be repaid under the terms of the Master Promissory Note.
ETSU must disburse a PWD of federal financial aid funds within 180 days of the date of the University’s determination of the withdrawal. Institutions cannot make a PWD to the account or estate of a student who has passed away. Also, a student’s estate is not required to return any Title IV funds as part of the Return of Title IV calculation.
The “unearned” amount must be returned to the USDOE by the University and/or the student. Federal financial aid programs included in the calculation of the “unearned” portion to be returned include:
- Federal Pell Grant
- Iraq and Afghanistan Service Grants
- TEACH Grants
- Federal Supplemental Educational Opportunity Grant (FSEOG)
- Direct Loans
- Perkins Loan
Federal Work Study awards are not included in the calculation.
Federal financial aid will be returned in the following order, up to the net amount disbursed from each source:
- Unsubsidized Direct Loans (other than Direct PLUS Loans)
- Subsidized Direct Loans
- Federal Perkins Loans
- Direct PLUS Loans
- Federal Pell Grants
- TEACH Grants
- Iraq & Afghanistan Service Grants
Students may submit a Tuition Refund Appeal to the Bursar’s Office for extenuating circumstances surrounding their withdrawal from school. Students who withdraw and are granted a Tuition Refund Appeal are still subject to the Return of Title IV Funds calculation. The amount of repayment or refund will be affected if there is a refund of tuition given at the time of withdrawal. For more information about ETSU’s refund policy, please see the Fee Adjustment (Refund) Policy on the Bursar’s website.
Students who withdraw before 60% of the semester is completed are entitled to keep a portion of their award equal to the percentage of the semester that they have completed. Students who withdraw after the 60% of the semester is completed are eligible to keep their entire award.
CAUTION: Satisfactory Academic Progress (SAP) is still a factor in determining eligibility in future semesters.