MCC's Return of Title IV (R2T4) Policy
34 CFR 668.22
Treatment of Title IV Financial Aid When a Student Withdraws
The law specifies MCC must determine the amount of Title IV program assistance that a student earned if the student withdraws from school. The Title IV programs that are covered by this law are: Federal Pell Grants, Academic Competitiveness Grants, National SMART grants, TEACH Grants, Stafford Loans, PLUS Loans, Federal Supplemental Educational Opportunity Grants (FSEOGs), and Federal Perkins Loans.
When a student withdraws (officially or unofficially) during their payment period the amount of Title IV program assistance that they have earned up to that point is determined by a specific formula. If the student received (or MCC or parent in the case of a PLUS loan on the students behalf) less assistance than the amount the student earned, the student may be able to receive additional funds. If the student received more assistance than they earned, the federal Department of Education requires the excess funds be returned by the school and/or student.
The amount of assistance that the student earned is determined on a prorata basis. For example, if the student completed 30% of their payment period, they earned 30% of the assistance they were originally scheduled to receive. Once the student completed more than 60.01% of the payment period, the student earned all the assistance they were scheduled to receive for that period.
If the student did not receive all of the funds they earned, MCC may be able to offer the student a post-withdrawal disbursement. If federal calculations indicate the student’s post-withdrawal disbursement includes loan funds, MCC must get the student’s (or parents’ in the case of a PLUS loan) permission before it can disburse the funds to the student. The student may choose to decline some or all of the loan funds so they don’t incur additional debt. MCC may automatically use all or a portion of the post withdrawal disbursement of grant funds for tuition, fees, and room and board charges (as contracted with the school). MCC needs the student’s (or parent in the case of a PLUS loan) permission to use the post-withdrawal grant disbursement for all other school charges. It may be in the student’s best interest to allow the school to keep the funds to reduce their debt at the school.
There are some Title IV funds the student may have been scheduled to receive that cannot be disbursed once the student withdraws because of other eligibility requirements. For example, if the student is a first-time, first-year undergraduate student and has not completed the first 30 days of their program before they withdraw, they will not receive any FFEL or Direct loan funds that they would have received had they remained enrolled past the 30th day.
If the student receives (or MCC or parent receives on your behalf) excess Title IV program funds that must be returned, MCC must return a portion of the excess equal to the lesser of:
- The institutional charges multiplied by the unearned percentage of the funds, or
- The entire amount of excess funds.
MCC is federally required to return this amount even if it didn’t keep this amount of the student’s Title IV program funds.
If MCC is not required to return all of the excess funds, the student must return the remaining amount. Any loan funds the student is required to return must be repaid in accordance with the terms of the promissory note. That is, the student or parent must make scheduled payments to the holder of the loan over a period of time.
Any amount of unearned grant funds the student must return is called an overpayment. The maximum amount of a grant overpayment that the student must repay is half of the grant funds they received or were scheduled to receive. Because MCC returns the excess funds to the Department of Education on the student’s behalf, the student must make arrangements with MCC to repay the unearned grant funds.
The requirements for Title IV program funds when the student withdraws are separate from any refund policy that MCC has. Therefore, the student may still owe funds to the school to cover unpaid institutional charges. MCC reserves the right to charge the student for any Title IV program funds they were required to return.
For more information on MCC’s refund policy, please see the current academic year’s catalogue or contact the MCC Business Office for the MCC refund policy. MCC can also provide the requirements and procedures for officially withdrawing from school.
Please direct additional questions about Return of Title IV Refunds (R2T4) program tol the Federal Student Aid Information Center at 1-800-4-FEDAID (1-800-433-3243). TTY users may call 1-800-730-8913. Information is also available on Student Aid on the Web at www.studentaid.ed.gov.