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Adjustment of Financial Aid due to Discontinuance of Study

Federal regulations require that UB use a Return of Title IV Funds calculation in cases where a student receiving Title IV financial aid (Pell, ACG Grant, SMART Grant, Perkins, SEOG, Direct Loans) discontinues study during a given semester. When a student discontinues study (drops or withdraws from all courses in the semester) and has previously been awarded these funds, the university must determine if these funds are required to be returned to the appropriate financial aid programs.

The university is required to perform the calculation within forty-five (45) days of discontinuance of study. The policy statement below is for your information and reference; please call the Student Response Center (716-645-2450) with questions regarding the effect and changes of your financial aid award if you are discontinuing study at UB.

Withdrawal Date

The date the student withdraws, as determined by the school.

Return of Title IV Funds

The federally mandated process by which a school calculates the amount of federal funds to be returned for a Title IV aid recipient who withdraws or who ceases attendance during a semester. The calculations may result in a reduction of the student's Title IV loan and grant aid to reflect the percentage of the semester that the student attended, if he or she attended 60 percent or less of the semester. Based on these calculations, the school, and the student may be required to return any "unearned" federal assistance. The amount is demonstrated in the example below.

No Passing Grades

Federal financial aid regulations require that any student who failed to earn a passing grade in at least one course in the semester shall be considered as having unofficially withdrawn.

At the end of each semester, UB will review the academic transcripts of federal financial aid recipients to identify students who have no passing grades.  Students are identified based on having received either all F grades, all I/F grades or a combination the two.  Based on those grades, the semester’s Federal Title IV financial aid will be recalculated to determine what portion of that aid was “earned” by the student.  Federal Title IV financial aid consists of Pell, Perkins, SEOG, Academic Competitiveness Grant, National SMART Grant and Direct Loans.

The Return of Title IV calculation will be performed (after the semester has ended and grades are available) using the midpoint of the semester as the withdrawal date.  Based on these calculations, the school will be required to return any "unearned" federal assistance, resulting in a debit or increase to the student account.

Students will be notified via letter of this calculation.  If a student feels this determination is incorrect, he/she must contact the Student Response Center immediately if he/she has information that could lead to a determination that:

1) the student  did  not unofficially withdraw and
2) the student earned at least one of the F grades by attending the class through the end of the semester, completing the course requirements, and received the F grade.

Determining the Amount of Unearned Aid to be Returned

The calculated percentage of the semester completed becomes the percentage of the Title IV aid that the student has earned. The total Title IV aid disbursed to the student, or that could have been disbursed to the student (i.e. disbursable aid) minus the amount of Title IV aid earned by the student yields the amount of Title IV loan and grant aid that is unearned and that must be returned: (688.22(e)).

Total Title IV Disbursable Aid	Minus	Title IV Aid Earned	Equals	Title IV Loan and Grant to be Returned

Distribution of Refund Among Financial Aid Programs:

Refunds on behalf of Student Financial Aid recipients must be distributed among the financial aid programs in the following order:

1. Unsubsidized Federal Direct Stafford Loan
2. Subsidized Federal Direct Stafford Loans
3. Federal Perkins Loans
4. Federal Direct Parent Loan for Undergraduate Students
5. Federal PELL Grant
6. Academic Competitiveness Grant
7. National SMART Grant
8. Federal Supplemental Educational Opportunity Grant

Example Calculation

The following example based on full time, undergraduate attendance may help you better understand the RTIV policy:

The date the school was notified of the withdrawal from classes: September 19, 2007

• Days in semester: 108 days
• Days attended: 24 days

Percentage of Semester Completed: 24 / 108 = 22.2% Completed

(If the percentage completion is greater than 60%, no further calculations are required and no aid is returned.)

Amount of Financial Aid that has been earned
Disbursed Title IV Aid for Semester	$5,576.00
x Percentage Completed x	22.2%
Dollar amount of Earned Aid	$1,237.87
Unearned Aid Percentage	100% - 22.2% = 77.8%

The University must return the lower of either the unearned financial aid or the unearned institutional costs. This action will result in the student account being debited (increasing the balance due the University). A communication will be sent to the student in addition to an updated student account statement.

For this case, the $4338.13 amount would have to be returned.

Funds Returned in this order:
Direct Loan-Unsubsidized	$1,688.00
Direct Loan-Subsidized	$1,733.00
Pell	$ 917.00
Total Title IV Returned	$4,338.00

Total Unearned Financial Aid	$4,338.00
Less Amount the institution must return	$4,338.00
= Amount for which student is responsible to return	$ 0

Important: If the unearned Institutional costs are lower than the Unearned financial aid, then the student must return the difference. If the amount(s) to be returned by the student is a loan, no action has to be taken by the student immediately, the loan servicer will contact the student at the appropriate time regarding repayment.

Any Pell and/or SEOG amounts due from the student will be returned to the Department of Education by UB. In doing this, the student account will be charged for the amounts due to the Department of Education. Students will receive notification of this action via letter from UB in addition to an updated statement of account.