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Return of Title IV Funds

As part of the Higher Education Amendments of 1998, Congress passed new provisions regarding refund policies and procedures for students who have received Federal Student Assistance and are considered withdrawn from school. Based on WestMed Colleges policies, which are made in accordance with federal regulations, a student is considered “withdrawn” if not in attendance for 14 consecutive days.

The Federal Return of Title IV Funds (R2T4) policy was effective October 7, 2000, and governs all federal grant and loan programs, including Federal Pell Grant, SEOG, ACG, SMART, Perkins Loan, Stafford/Direct Loans (subsidized and unsubsidized,) and PLUS loans. This federal regulation assumes that awards of Federal Student Aid funds are earned in proportion to the number of clock hours attended for the period funded. If a student is considered withdrawn from the College, a calculation is then performed to identify the total scheduled financial assistance the student earned and is therefore entitled to receive. If the student receives (or the College receives on the student’s behalf) more financial aid than is earned, the unearned funds must be returned to the Department of Education and/or the appropriate lender. If the student receives (or the College receives on the student’s behalf) less financial aid than the amount earned, the student may be able to receive those additional funds.

The portion of federal grants and loans that a student is entitled to receive is calculated on a percentage basis. The percentage is determined by comparing the total number of clock hours in the specified payment period to the number of days completed before withdrawing from the College.

In general, loan disbursements and grants cover a specific period of time and number of clock hours called the payment period. Once more than 60 percent of the payment period has been completed, all (100 percent) of the financial aid award received for that period is considered earned.

Important Note: If a student is considered withdrawn from the College (officially or unofficially) before completing 60 percent of a payment period, the student may have to repay unearned federal monies that were already disbursed at the beginning of the payment period.

If it is determined that the student received excess funds that must be returned, the College shares the responsibility of returning those funds. The College’s portion of the funds to be returned is equal to the lesser of:

  • The entire amount of the excess funds, or
  • The total in tuition and fee charges multiplied by the percentage of unearned aid received.

If the refund calculation determines that the College is not required to return all of the excess funds, then the student must return the remaining amount. Any loan funds that a student is required to return must be repaid according to the terms of the promissory note. If any grant funds must be returned, the law allows the repayment amount to be reduced by 50 percent. This means that a student who has received too much in grant funds will only be required to return half of the excess amount.

If there is a return of any unearned financial aid by the College, the student will be billed accordingly. In such cases, the student will be required to make arrangements with the Student Business Services Office to pay the amount refunded to the Department of Education or the lender within 45 days of the date of the College’s notification. In addition, the student will not be eligible for any further federal financial aid until the balance is paid.


WestMed College is an affiliate of the National University System.