The Higher Education Amendments of 1998 contained a major shift in policy regarding federal student financial aid funds and how those funds are to be handled when an aid recipient completely withdraws from or stops attending college. These regulations went into effect on October 7, 2000 for the Fall semester 2000. These regulations (collectively known as "Return of Title IV Funds" or "R2T4") govern aid received from the Pell Grant, FSEOG, and FFEL programs. Funds received from the Federal Work-Study Program are not subject to the R2T4 regulations.
The concept of "earned" and "unearned" federal financial aid is at the heart of the new law. According to this concept, a student "earns" his or her financial aid award in proportion to the number of days in the term completed prior to the student's complete withdrawal. The percentage of enrollment time completed at ASCC determines the percentage of "earned" aid. For example, if a student attends through the first 25 days of a 100-day term, the percentage of earned aid is 25%. The remaining 75% of the aid received is "unearned", and must be returned to the federal financial aid program/s it came from.
When a student completely withdraws from ASCC prior to completing 60% of any given term, a portion of the Title IV financial aid grant and loan funds received (excluding Federal Work-Study wages) is considered to be an overpayment, and must be returned to those federal aid programs.
The student's official complete withdrawal date will be determined by ASCC as:
– the date the student began the ASCC withdrawal process (the date that the student officially notified an appropriate ASCC official [Registrar, Assistant Registrar or Center Director] of his/her intent to completely withdraw), or
– the midpoint of the semester if the student ceases attending without notifying ASCC, or
– the student's last date of attendance at an academically-related activity as documented by the ASCC faculty member/s.
When a student completely withdraws from ASCC prior to completing 60% of a term, he or she will be required to repay a portion of the unearned aid received. The student's repayment will not exceed more than half of grant monies originally received, and each student who owes a repayment will be notified in writing of the requirement to repay Title IV funds. The student will then have 45 days to repay or to make satisfactory arrangements to repay the funds. The failure of a student to repay unearned Title IV funds or make satisfactory arrangements within the 45 day period will be reported to the National Student Loan Database System (NSLDS). This action will result in the termination of eligibility for federal financial aid at any institution, not just at ASCC. If a student completely withdraws after completing 60% of the term, no refund is required as the student is considered to have earned 100% of their aid awarded for the term.
Students with questions about the R2T4 regulations should see staff in the ASCC Business Office.