Federal law requires schools to calculate how much federal financial aid a student has earned if that student:
Based on this calculation, Owens Community College students who receive federal financial aid and do not complete their classes during a semester could be responsible to repay a portion of the aid they received.
Federal financial aid covered under this regulation includes the Federal Pell Grant, Iraq and Afghanistan Service Grant, Federal Supplemental Educational Opportunity Grant, Federal Direct Stafford loans, and Federal Direct Parent PLUS loans. State grant and scholarship programs are not covered under this regulation but follow the College's institutional refund policy.
Students who receive federal financial aid must "earn" the aid they receive by staying enrolled in and attending their classes. The amount of federal financial aid assistance the student earns is determined on a pro-rated basis. Students who withdraw or do not complete all registered classes during the semester may be required to return some of the financial aid they were awarded.
For example, if the student completes 30 percent of the payment period, the student earns 30 percent of the aid he/she originally was scheduled to receive. This means that 70 percent of the studentís scheduled awards remain unearned and must be returned to the federal government. Once the student has completed more than 60 percent of the payment period, the student will earn all of his/her federal financial aid.
The following formula is used to determine the percent of unearned aid that has to be returned to the federal government:
The percent earned is equal to the number of calendar days completed up to the withdrawal date, divided by the total calendar days in the payment period (less any scheduled breaks that are at least 5 days long).
The payment period for most students is the entire semester. However, for students enrolled in modules (courses which are not scheduled for the entire semester), the payment period only includes those days for the module(s) in which the student is registered.
The percent unearned is equal to 100 percent minus the percent earned.
The withdrawal date used in the return calculation of a student's federal financial aid is the actual date the official drop form is processed by the Records Office or Oserve. If a student stops attending classes without notifying the College, the withdrawal date will be the midpoint of the semester or the last date of recorded attendance in class.
The College and the student are both responsible for returning unearned federal financial aid to the federal government. Amounts that must be returned will be applied in the following order: Federal Direct Unsubsidized Stafford Loan, Federal Direct Subsidized Stafford Loan, Federal Direct Parent PLUS loan, Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, and the Iraq and Afghanistan Service Grant. The College must return the lesser of 1) the total amount of unearned aid or 2) institutional charges multiplied by the unearned percentage. The student must return any remaining unearned aid not sent back by the College.
The student also will be billed for any amount due the College resulting from the return of federal aid funds that were used to cover tuition and fees. For example, if the College is required to pay back to the government federal funds used to pay a portion of a student's tuition for the semester, the student then must pay the College for that unpaid portion of their tuition.
The Owens Office of Financial Aid will notify students if they owe federal funds back to the government. Amounts that must be returned by the student will first be applied to federal loans. The student will be permitted to repay loans based on the terms of the Master Promissory Note, which usually consists of scheduled payments to the holder of the loan over a period of time. Any grant amounts the student has to return to the federal government must be repaid within 45 days after the student receives notification from the Office of Financial Aid. If the grant overpayment cannot be paid in full, a satisfactory repayment plan may be arranged with the U.S. Department of Education.
If the student owes any money to the College resulting from the return of federal funds used to cover tuition and fees, the student will be billed by the Owens Office of Student Accounts.
If a student does not repay the grant funds that are owed to the government within the 45 days, the account will be turned over to the U.S. Department of Education as an overpayment of federal funds. Students who owe an overpayment of Title IV funds are ineligible for further disbursements from the federal financial aid programs at any institution until the overpayment is paid in full or payment arrangements are made with the U.S. Department of Education.
If a student does not pay funds due to the College to cover a tuition and fees balance that resulted after the College returned their unearned portion of the federal funds, the student's records will be placed on financial hold. This means the student will not be permitted to register for classes (or, in some cases, remain enrolled) or receive transcripts until his/her balance is paid in full.
To view an example, click here.