Return of Title IV Funds

Office of Financial Aid and Scholarships

 

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.

 

  • Official Withdrawals

    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: 

    • Date the student began the University’s withdrawal process; or
    • Date student officially notified the University of intent to withdraw
  • Unofficial Withdrawals

    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
  • Post-Withdrawal Disbursements

    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.

  • Programs Offered in Parts of Term (Modules) 

    For all programs offered in modules, a student is considered to have withdrawn for Title IV purposes if the student ceases attendance at any point prior to completing period of enrollment, unless the school obtains written confirmation from the student at the time of the withdrawal that they will attend a module that begins within the established timeframes later in the same period of enrollment or meets one of the R2T4 withdrawal exemptions.

     

    Exemption - A student is not subject to the return of funds if:

    • You complete all of the requirements for graduation;
    • You successfully complete a class or multiple classes that comprise at least 49 percent of the days in the full term; or
    • You successfully complete a class or multiple classes that comprise at least half-time enrollment.
    • A successfully completed module is one that the student earns a grade other than an “F”, “I”, or W”

     

    Per the Federal Student Aid Handbook Volume 5, When a student enrolls in a part of term during a semester, the student is considered to be enrolled in a program offered in modules and the institution must determine the number of days used in the R2T4 calculation based on whether the coursework, including full-term courses, was used to determine the amount of eligibility for Title IV aid. This determination will depend on: Whether a school uses an R2T4 Freeze Date; The Title IV programs for which the student was eligible; and which modules/courses the student attended during the period.

     

    ETSU does not have an R2T4 Freeze Date. This means that we use the student’s enrollment/registration and attendance on or after the first day of the period, as well as the types of aid the student is receiving, to determine the number of days the student was scheduled to attend (denominator) during the period for R2T4 purposes.

     

    • If the student is only eligible for Pell Grant, Iraq-Afghanistan Service Grant, and/or TEACH Grant funds during the period, the days in a module/course must be included in the denominator of the R2T4 calculation only if the student attends the module/course. This is because Pell Grant, Iraq-Afghanistan Service Grant, and TEACH Grant recalculation requirements ultimately require institutions to exclude from consideration in the student’s enrollment status any coursework that the student did not attend.
    • If the student is eligible for Direct Loan or FSEOG funds during the period (regardless of eligibility for other Title IV programs) and does NOT use an R2T4 Freeze Date, the days in a module/course must be included in the R2T4 calculation if the student was enrolled in the module/course on the first day of the period or enrolled in the module/course at any time during the period. This is because a student’s cost of attendance for these programs is affected by the student’s enrollment in all modules/courses during a payment period or period of enrollment.

     

    Written Confirmation of Attendance in a Future Module

    Students who partially withdraw from a program offered in modules but remain in a course which is scheduled to begin within 45 days of the end of module the student ceased attending is considered a withdrawal unless the Office of Financial Aid and Scholarships receives written confirmation from the student that he or she will attend a module that begins later in the same term


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

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:  

  1. Unsubsidized Direct Loans (other than Direct PLUS Loans)
  2. Subsidized Direct Loans
  3. Direct PLUS Loans
  4. Federal Pell Grants
  5. FSEOG
  6. TEACH Grants
  7. 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.