Repaying Aid if I Stop Going to Class (R2T4 Policy)

Return of Title IV Refund Policy

Federal student aid regulations require the Financial Aid Office to calculate an amount of money the student may be required to return that they received in Federal Title IV and Campus-Based Aid (Pell Grant, SEOG, Stafford Loans). Students must repay financial aid funds should they completely withdraw from all classes, drop out, are dismissed, or leave the university prior to completing more than 60% of the semester. Federal Title IV financial aid and all other aid are viewed as 100% earned after that point in time. The withdrawal date is defined as the actual date the student began the institution’s withdrawal process, or the student’s last date of recorded attendance for a student who leaves without notifying the institution. The Federal Title IV programs covered under this policy include Federal Pell Grant, Federal SEOG, Federal Stafford Loans, and Federal PLUS Loan (Graduate Student or Parent).

The University of the District of Columbia (UDC) is responsible for returning all Title IV aid. The school returns “unearned” Title IV funds that have been paid to the school to cover the student’s institutional charges received from Title IV grant and/or loan programs. When the student’s funds are returned back to the Title IV programs, the student will receive notification. The University has 45 days from the date of notification of withdrawal to return all Title IV aid. Immediate repaying of the unearned loan amount is not required because the student repays the loan to the lender according to the terms or conditions in the promissory note. The institution will advise the lender of the student’s withdrawal within 30 days of determining the student withdrew.

No additional disbursements may be made to the student for the enrollment period. If the student does not repay the amount owed to the Title IV programs or does not make satisfactory payment arrangements with the U.S. Department of Education, UDC may report to the National Student Loan Data System (NSLDS) that the student received an overpayment. The student loses eligibility for further Title IV aid until resolved.

Recalculation is based on the percent of earned aid using the following formula: Percent earned = Number of calendar days completed up to and including the withdrawal date/ total calendar days in the quarter/semester.

Federal Title IV financial aid is returned to the federal government (reducing student loan debt) based on the percent of unearned aid using the following formula:
Aid to be returned = (100% – percent earned) x the amount of aid disbursed toward institutional charges.

Return of Funds

Federal Title IV financial aid is returned in the order mandated by the U.S. Department of Education. No program can receive a refund if the student did not receive aid from that program. Funds must be returned within 45 days after the date of withdrawal determination. Return of funds required by the student for unearned aid is returned (repaid) in accordance to the terms of the loan on the promissory note. The order is as follows based on aid offered at UDC:

1. Unsubsidized Direct Stafford Loan
2. Subsidized Direct Stafford Loans
3. Direct PLUS (Graduate Student or Parent)
4. Pell Grant
5. FSEOG

Post-Withdrawal Disbursements

If it is determined that a student is eligible for Federal Title IV financial aid funds that have not been disbursed, grant funds that the student is eligible for will be disbursed first. Federal aid that the student is eligible for will be credited to the student’s account for outstanding charges. If the student has no outstanding charges or if there is a balance due the student after disbursement, UDC will notify the student of his/her eligibility for the loans. The student must respond within 14 days of the date of the letter as to whether they want all, part, or none of the loan(s). If the student fails to respond within 14 days, no loan disbursement will be made.
Before calculating the amount of financial aid that must be cancelled, the following is taken into consideration:

• If a promissory note for a Stafford Loan has not been signed and submitted by the student prior to the withdrawal date, the loan(s) is automatically cancelled.
• If an entrance loan interview has not been completed by the student prior to the withdrawal date, the Stafford Loan is automatically cancelled.
• If the student is a first-time attendee of UDC and withdraws during the first 30 days of the semester, the Stafford Loan is automatically cancelled.
• Students who have not completed verification are not eligible for financial aid and are not included under this policy.

Exit Interviews

Exit Counseling is a requirement for everyone who has borrowed funds from a federal government or school loan program. It is designed to prepare you for repaying your student loans and help you with personal financial management.

Throughout this session you will learn the rules that apply to your student loans, repayment options, debt management possibilities, and the consequences of defaulting on your loans. You will need to know which types of federal student loans you have borrowed during your years of attendance at UDC.

• If you borrowed under the Federal Stafford Loan Program (either a Subsidized Stafford Loan or an Unsubsidized Stafford Loan, or both), please complete your exit counseling online at: https://studentaid.gov/ .

It is important that you understand the seriousness of repaying your student loans. If you have any difficulties in making your loan payments, please contact the lender (or servicer) of your loans.

You are encouraged to visit the Financial Aid Office or your Academic Advisor to discuss your situation and options prior to withdrawing. You may wish to avoid owing a repayment on the Federal student aid you received.  Failure to pay your Federal aid overpayment as a result of withdrawing officially or unofficially from UDC will result in you not being eligible for Federal student aid at any school in the country until the repayment is made. Also, be aware that if financial aid funds are returned to the US Department of Education, a bill may be created.  Any debt left unattended; the Office of Student Accounts will refer outstanding charges to collections.

Please visit the UDC Office of Financial Aid should you wish to view a detailed Return of Title IV Refund Policy and Procedure.