Refund Process for Students Receiving Federal Title IV Financial Aid
Federal and State regulations assume that you “earn” your Federal financial aid awards and HOPE directly in proportion to the number of days of the term that you attend until you withdraw. If you completely withdraw from school during a term, the school must calculate according to a specific formula the portion of the total scheduled financial assistance you have earned and are therefore entitled to receive up to the time you withdraw. If you or GGC receives more assistance than you earn, the unearned excess funds must be returned to the Department of Education or Georgia Student Finance Commission for HOPE Scholarship. On the other hand, if you or GGC receives less assistance than the amount you have earned, you may be able to receive those additional funds.
The portion of your Federal student aid or HOPE scholarship you are entitled to receive is calculated on a percentage basis by comparing the total number of days in the semester to the number of days you completed before you withdrew. For example, if you complete 30% of the semester, you earn 30% of the assistance you were originally scheduled to receive. This means that 70% of your scheduled awards remain unearned and must be returned to the Department of Education or the Georgia Student Finance Commission. Once you have completed more than 60% of the semester, you have earned all (100%) of your assistance. If you withdraw from GGC before completing 60% of the semester, you may have to repay any unearned financial aid funds that were already disbursed to you.
If you received excess funds based on this calculation, GGC must return a portion of the excess equal to the lesser of:
- the student’s institutional charges multiplied by the unearned percentage of funds, or
- the entire amount of the excess funds.
If GGC is not required to return all the excess funds, you must return the remaining amount. The order that GGC and you must return these funds is as follows:
- Unsubsidized Stafford Loan
- Subsidized Stafford Loan
- Parent Loan (PLUS)
- Pell Grant
- Academic Competitiveness Grant
- National SMART Grant
- Other Title IV aid programs
If you are required to repay loan funds, this is done in accordance with the terms of your loan promissory note. If you must repay any grant funds, the law states that you are not required to repay 50% of the grant assistance that you were calculated to repay. Any grant amount that a student must repay is considered a grant overpayment and therefore must be repaid to appropriate federal and/or state program. GGC will notify the appropriate federal and/or state program that a grant overpayment exists. Students who owe a grant overpayment to a federal and/or state source will not be eligible for future aid from those sources until the grant overpayment is resolved with that entity.
Example:
Student received Federal Title IV aid as follows: $1,750.00 in Subsidized Stafford Loan and $782.00 in Pell Grant.
The student had $1,750.00 in institutional charges.
The student withdrew on day 25 of a semester having 112 days. The withdrawal date is the date the student began the withdrawal process at GGC.
The student has earned 22.3% (25 days divided by 112 days) of the Title IV aid, which equals $564.64 (loans of $1,750.00 plus grant of $782.00 times 22.3%).
The student has unearned aid of $1,967.37 (total aid received of $2,532.00 minus aid earned of $564.64) that must be returned to the federal programs.
The institution must return $1,359.75 ($1,750.00 institutional charges times 77.7% unearned aid); all of this will be returned to the Subsidized Stafford Loan.
The remaining $607.62 (unearned aid of $1,967.37 minus amount institution returned of $1,359.75) must be returned by the student. The student must repay $390.25 ($1,750.00 received in loan minus $1,359.75 returned to loan by institution) to the Subsidized Stafford Loan in accordance with the terms of the loan.
The student must return $108.68 to the Pell Grant Program. This calculated using the remaining unearned aid of $607.62 minus $390.25 returned to loan funds by student equals $217.37 multiplied by 50% (students are required to return 50% of unearned grant funds).
