Withdrawal and Return of Title IV Funds
Withdrawal & Return of Title IV Funds
Students earn federal financial aid by attending class (i.e., completing all scheduled days). Any unearned portion must be returned to the appropriate Title IV program. Federal law specifies how Sinclair must determine the amount of Title IV program assistance that you earn if you withdraw from school. The Title IV programs offered by Sinclair that are covered by this law are: Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Iraq and Afghanistan Service Grants, Federal Direct Loans, and Federal PLUS Loans.
Calculating Return of Title IV Funds When a Student Withdraws
When you withdraw during your payment period or period of enrollment, the amount of Title IV program assistance that you have earned up to that point is determined by a specific formula. If you received (or if Sinclair or your parent received on your behalf) less assistance than the amount that you earned, you may be able to receive those additional funds. If you received more assistance than you earned, the excess funds must be returned by Sinclair and/or you to the U. S. Department of Education (ED). You will be responsible for repayment of the funds to Sinclair that it paid to ED on your behalf.
The amount of assistance that you have earned is determined on a prorated basis. For example, if you completed 30% of your payment period or period of enrollment, you earned 30% of the assistance you were originally scheduled to receive. Once you have completed more than 60% of the payment period or period of enrollment, you earn 100% of the assistance that you were scheduled to receive for that period. That is, there are no unearned funds.
Withdrawing from a Course or all Classes May Affect a Student's Financial Aid
Students receiving financial aid who withdraw or stop attending, in most cases, will be required to return a portion of financial aid received. A student should submit an official withdrawal from classes form to the Registration & Student Records office (RSR). Before withdrawing or stopping attendance in classes, the student should be aware of the proper procedure for withdrawing from classes and the consequences of withdrawing or stopping attendance. Official withdraw is the responsibility of the student. Questions on Return of Title IV Funds may be addressed to the Financial Aid & Scholarships office. Questions on withdrawal should be addressed with an Academic Advisor.
The Withdrawal Date
The withdrawal date used in the Return of Title IV calculation is the actual date the official drop form is received by the Registration and Student Records office. If a student stops attending classes without notifying Sinclair, the withdrawal date will be the midpoint of the semester or the last date of recorded attendance at an academically related activity in a course for which attendance was established during the attendance verification period.
Post Withdrawal Disbursements
If you did not receive all of the funds that you earned, you may be due a post-withdrawal disbursement. Sinclair will notify the student within 30 days of the date of determination of withdrawal concerning the post withdrawal disbursement. If your post-withdrawal disbursement includes loan funds, Sinclair must get your permission (or your parent's permission for a Direct PLUS Loan) before it can disburse the funds. You (or your parent for a Direct PLUS Loan) may choose to decline some or all of the loan funds so that you do not incur additional debt. The student (or parent if a PLUS loan) must respond within 14 days of the date the post-withdrawal disbursement notification was sent. Entrance counseling must be completed before funds are disbursed.
Sinclair may automatically use all or a portion of your post-withdrawal disbursement of grant funds for tuition and fees and will apply those funds to your student account within 45 days of the date of determination of your withdrawal from Sinclair. Sinclair needs your permission to use the post- withdrawal grant disbursement for all other school charges. If you do not give your permission (Sinclair may ask for this when you enroll or register), you will be offered the funds. However, it may be in your best interest to allow Sinclair to keep the funds to reduce your debt at the school.
There may be some Title IV funds that you were scheduled to receive that cannot be disbursed to you once you withdraw because of other eligibility requirements. For example, if you are a first-time, first- year undergraduate student and you did not complete the first 30 days of your program before you withdrew, you will not receive any Direct Loan funds that you would have received had you remained enrolled past the 30th day.
Returning Unearned Federal Funds
If you receive (or if Sinclair or your parents receive on your behalf) excess Title IV program funds that must be returned, Sinclair must return a portion of the excess equal to the lesser of:
- Your institutional charges multiplied by the unearned percentage of your funds, or
- The entire amount of excess funds.
Sinclair will return Title IV funds in the following order:
- Unsubsidized Direct Loan
- Subsidized Direct Loan
- Direct PLUS Loan
- Federal Pell Grant
- Iraq and Afghanistan Service Grant
The required return of Title IV funds will be made to the Title IV programs within 45 calendar days of the date of determination of withdrawal.
In addition to returning unearned loan and grant funds due from the school to the Title IV program, Sinclair will return those excess unearned grant funds due from you to the Title IV program. You will be required to repay Sinclair for the student portion of the funds returned to the Title IV programs.
Any loan funds that you (or your parent for a Direct PLUS Loan) are eligible to keep must be repaid in accordance with the terms of the promissory note. That is, you make scheduled payments to the holder of the loan over a period of time agreed upon by you (or your parent for a Direct PLUS loan).
Any amount of unearned grant funds that you must return is called an overpayment. The maximum amount of a grant overpayment that you must repay is half of the grant funds you received or were scheduled to receive. You do not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. You must make arrangements with Sinclair to repay Sinclair the amount of the unearned grant funds paid on your behalf by the college.
- Last Revised: 07/07/2020