Return of Title IV Funds

Financial aid is awarded with the assumption that students will remain enrolled for the entire semester. The Office of Financial Aid is required by federal regulations to determine if the school and student are required to return Title IV funds if students withdraw or are dismissed from the university.

If students are withdrawing they must first meet with the Dean of their school and obtain a signed and dated Withdrawal Routing Process Form and a Withdrawal From School form. The Dean or designated other must indicate on the Withdrawal From School form the action that applies to the student. Also, the effective date must be entered because it is the official date of the withdrawal. Each office listed on the routing form must sign and if deemed necessary per office policy enter comments.

An official withdrawal is when a student submits both the Withdrawal Routing Process Form and the Withdrawal From School form to the Office of the Registrar or when the student withdrawals from all of his/her classes.

An unofficial withdrawal is when a student stops attending all of his/her classes during the semester, does not follow the college procedure to officially withdraw as outlined by the Office of the Registrar, and fails to complete the term (i.e., receives all final grades of F, NA, or a combination of both).

When a student completely withdraws from Morgan State University while receiving Title IV aid, the Office of Financial Aid must determine what portions of the student’s aid will be returned to the federal aid programs. The financial aid office uses the Federal Return of Title IV Funds formula provided by the Department of Education to calculate the amounts of  "earned” (can keep aid) vs. “unearned” (cannot keep aid).

Number of days completed divided by the Total days in the semester = percentage of aid earned 

Funds are returned to the appropriate federal programs based on the percentage of unearned aid.

Per the following process:

1. The student obtains a signed Withdrawal Routing Process Form and a Withdrawal From School Form from the student’s department.
2. Students are to get signatures from all departments listed on the Withdrawal Routing Process Form.
3. The Office of Financial Aid will review the forms for signatures and dates from the Dean’s office and Residence Life, as well as a signature and date from the student.
4. The Office of Financial Aid will request that students complete a loan Exit Counseling Interview if they received any loans at any time while they were enrolled.
5. A Return of Title IV calculation is performed using the FAA online program.
6. The Office of Financial Aid uses the official withdrawal date that is entered for the RT24 calculation as the effective date entered on the withdrawal from school form.
7. If the return of funds is required by the school, the advisor will manually input the necessary adjustments in Banner by reducing aid according to the RT24 calculation. Additionally, the advisor will notify all relevant areas within the Office of Financial Aid about the adjustment in Banner to ensure COD is updated accordingly.
8. Students who owe funds to a grant program that exceeds the school’s portion are required to make payment of those funds within 45 days of being notified that they owe this overpayment.  (3)
9. Students are notified immediately in person or via Email message of any aid adjustments.                                     

Morgan State is required to return the calculated amount of federal Title IV funds no later than 45 days after the determination of the date of the student’s withdrawal date if the student withdrew on or before completing 61% of the semester. Funds that are returned may cause a balance and the student is responsible for paying the balance to the university.

Below you will find the order in which funds are returned:

• Unsubsidized Direct Loans 
• Subsidized Direct Loans
• Direct PLUS Loans (parent or graduate)
• Federal Pell Grants for which a return of Title IV funds is required
• Iraq and Afghanistan Service Grant, for which a return of Title IV funds is required
• FSEOG for which a return of Title IV funds is required
• TEACH Grants for which a return of Title IV funds is required

VERIFICATION

If a student withdraws or stops attending before completing verification, the student may qualify for a post-withdrawal disbursement and will be notified in writing of the process.

POST-WITHDRAWAL DISBURSEMENTS

A student may be eligible for a post-withdrawal disbursement if, before withdrawing, the student earned more federal financial aid than was disbursed.  If a student is eligible for a post-withdrawal disbursement for Title IV funds, grants will be disbursed within 45 days and loans will be processed within 30 days, allowing students at least 14 days to respond.   (1) 

Post-withdrawal disbursements (PWD) are calculated within the R2T4 formula and represent the amount of aid earned for the payment period that has not yet been disbursed. If a student establishes attendance in a least one course within the payment period and ceases enrollment, an R2T4 calculation will be performed.

It is also important to understand that accepting a post-withdrawal disbursement of student loan funds will increase overall student loan debt that must be repaid under the terms of the Master Promissory Note.  Additionally, accepting the disbursement of grant funds will reduce the remaining amount of grant funds available to the student should the s(he) continue his/her education at a later time.    

If it is determined that a student is eligible for federal financial aid that has not been disbursed, a student may receive grant funds to cover any outstanding charges.  If the student is eligible for a loan, Morgan State will notify the student no later than 30 days after his/her eligibility for the loan is determined.  The student must respond within 14 days of the date of the notification to accept or decline the loan.  Eligibility for aid may include

• The student has an ISIR with an official SAI.
• Undisbursed FSEOG must have been awarded by the student’s withdrawal date.
• Undisbursed Direct Loans must have been awarded and originated by the student’s withdrawal date.
• Undisbursed PLUS loan-approved credit checks must have been received by the student’s withdrawal date.
• Students eligible to receive a loan must be enrolled at least half-time on the withdrawal date.

Even though the R2T4 calculation identifies aid that could have been disbursed, the aid may not be disbursed if:

• The Federal Direct Loan was originated but the Master Promissory Note (MPN) was not signed.
• A first loan disbursement to a first-time, first-year borrower withdrew before day 30 of the payment period.
• The student does not respond within 14 days of the letter date affirming the desire to receive the otherwise eligible loan.

All post-withdrawal disbursements are applied to the student account first.  If the Post-Withdrawal Disbursement results in a credit balance, a refund will be issued within 14 days.  (2)