The Financial Aid Office is required by federal statute to recalculate federal financial aid eligibility for students who withdraw, drop out, are dismissed, or take a leave of absence. The federal Title IV financial aid programs must be recalculated in these situations prior to completing 60% of a payment period or term. The Office of Financial Aid recommends that students planning to drop all of their classes contact the financial aid office for advisement before withdrawing from their courses. The federal student aid programs that are covered by this law are: Federal Pell Grant, Federal Subsidized Loans, PLUS Loan, and Federal Supplemental Educational Opportunity Grant (FSEOG)
If a student leaves the institution prior to completing 60% of a payment period or term, the financial aid office recalculates eligibility for Title IV funds. Recalculation is based on the percentage of earned aid using the following Federal Return of Title IV funds formula:
Percentage of payment period or term completed = the number of days completed up to the withdrawal date divided by the total days in the payment period or term. (Any break of five days or more is not counted as part of the days in the term.)
The amount of assistance that you have earned is determined on a prorated basis.
For example, if you completed 30% (fifth week) of your payment/enrollment period, you earn 30% of the assistance you were originally scheduled to receive. Once you have completed more than 60% of the payment period or period of enrollment, you earn all the assistance that you were scheduled to receive for that period.
If you did not receive all of the funds that you earned, you may be due a post-withdrawal disbursement. If the post-withdrawal disbursement includes loan funds, you may choose to decline the loan funds so that you don't incur additional debt.
If you did not attend the course(s) or unofficially withdraw, PCC will calculate the R2T4 at the midpoint (50%) of the payment period for which Title IV assistance was disbursed.
PCC may use all or a portion of your post withdrawal disbursement (including loan funds, if you accept them) for tuition and fees. For all other school charges, such as short-term loans, PCC has received your permission on the Short-Term Loan promissory note to use the post-withdrawal disbursement to repay all or a portion of the loan.
For example: If you are a first-time, first-year undergraduate student and you have not completed the first 30 days of your program before withdrawing, you will not have earned any Federal Direct Student Loan funds that you would have received had you remained enrolled past the 30th day.
If you (or PCC or your parent) receive excess federal student aid program funds that must be returned, PCC must return a portion of the excess equal to the lesser of:
- your institutional (tuition and/or enrollment fees) charges multiplied by the unearned percentage of your funds, or
- the entire amount of excess funds.
PCC must return this amount even if it didn't keep this amount of your federal student aid program funds.
If PCC is not required to return all of the excess funds, you must return the remaining amount. Any loan funds that you must return, you (or your parent for a PLUS Loan) repay in accordance with the terms of the promissory note. That is, you make scheduled payments to the holder of the loan over a period of time.
Any amount of unearned grant funds that you must return is called an overpayment. The amount of a grant overpayment that you must repay is half of the unearned amount. You must make arrangements with the PCC, Office of Fiscal Services or the Department of Education to return the unearned grant funds.
The requirements for federal student aid program funds when you withdraw are separate from any refund policy that PCC may have. Therefore, you may still owe funds to PCC to cover unpaid institutional charges. PCC will also charge you for any federal student aid program funds that PCC is required to return. If you don't already know what PCC's refund policy is, please inquire at the Student Business Services Office, B-203). Please see the PCC, Schedule of Classes for requirements and procedures to officially withdraw.
Financial Aid Overpayment
What is a financial aid overpayment? An overpayment occurs when a student receives more financial aid than he/she was eligible for. Generally, overpayments are the result of changes in enrollment; e.g., full-time to half-time status or a complete withdraw from all classes. Overpayments can also occur when a student’s financial information changes or additional information such as academic transcripts are submitted after a grant or loan payment is made.