Title IV Aid (R2T4) & Withdrawal Policy

Financial Aid Withdrawal & Non-Attendance Policies

Per Department of Education Federal Regulations, Title IV funds (Pell, SEOG, TEACH Grants, Direct Subsidized and Unsubsidized student loans, and Plus loans) are awarded to a student with the expectation that the student will attend the classes for which they enrolled. Part of the awarding criteria for Financial Aid is the number of credit hours a student is enrolled for (enrollment status) along with the duration of enrollment (semester).

Attendance will be taken through census date. Only classes that a student has confirmed attendance through census will be used to determine enrollment status for financial aid purposes. If a student has not attended a class at census, the student will be administratively withdrawn from the course and will not receive any federal or state aid for the course.

When a student changes their class schedule by dropping a course prior to census date, or by dropping more credit hours than what is added back (i.e. drop 3 credit hour course but only add a 1 credit hour course) then the aid must be refigured on the REVISED enrollment status. This could mean a change from full-time to part-time and result in a reduction of the amount of aid that a student can receive for the semester.

When a student withdraws before completing the semester, our office is required to complete a recalculation, for all Title IV funds, as of the date the student ceased attendance.

State regulations also require a recalculation of state aid such as the Tennessee Student Assistance Award and the HOPE Scholarship if a student withdraws or changes their schedule.

Tusculum University is not required to monitor student attendance. Instructors must record and report attendance for each class meeting (including online, student teaching, internships, practicum, and so forth) through census date. If a student receives a failing grade in a course, an instructor will be required to enter a last date of academically related activity for that course. This is the date that will be used for Return to Title IV recalculations.

Return of Federal Title IV Aid Funds

Federal regulations require a specific refund calculation for all students receiving Federal Title IV aid funds. The length of time during which a refund must be calculated is up to 60 percent of the payment period (semester/term). If a student withdraws on or before the 60 percent point in time, a portion of the Federal Title IV aid funds awarded to a student (Federal Direct Unsubsidized and/or Subsidized loans, Federal Perkins Loan, Federal Direct Parent (PLUS) Loan, Federal Pell grant, Federal SEOG, and/or the Federal TEACH grant) must be returned, in accordance with the provisions of the Higher Education Act, as amended. The return of these funds may result in the student owing a balance to the University and/or to the U.S. Department of Education.

The Tusculum University Financial Aid Office is required by federal statute to recalculate federal financial aid eligibility for students who withdraw, are dismissed, or cease attending prior to completing 60% of a payment period. When a student receives failing, incomplete, or missing grades for a term, they may be considered to have unofficially withdrawn (stop attending/drop out) without proper notification. If the non-attendance is verified by Tusculum University, a calculated portion of the student’s Title IV aid will be returned according to federal regulations. This may result in the student owing funds to Tusculum University.

Aid awarded through the Federal Title IV Student Financial Aid Programs must be recalculated in these situations. The recalculation is based on the percentage of earned aid using the following Federal Return of Title IV Funds formula:

Percentage of payment period completed in which courses are offered in modules = the number of days completed up to the withdrawal date divided by the total days in the payment period. (Any break of five days or more is not counted as part of the number completed days or total days in the payment period.) This percentage is also the percentage of earned aid.

As an institution not required to take attendance, the date of the institution’s determination that the student withdrew will be based on the students last day of academically related activity recorded by the instructor with a failing grade. Funds are returned to the appropriate federal program based on the percentage of unearned aid using the following formula:

Aid to be returned = 100% of the aid that could be disbursed minus the percentage of earned aid; multiplied by the total amount of aid that could have been disbursed during the payment period or term.

If a student earned less aid than was disbursed, the institution would be required to return a portion of the funds and the student may be required to return a portion of the funds. Tusculum University will return the amount of Title IV funds for which it is responsible as soon as possible, but no later than 45 days after Tusculum determines or should have determined that the student withdrew. Keep in mind that when Title IV funds are returned, this may create a balance due to Tusculum from the student.

The return of Federal Title IV Aid funds is allocated in the following order:

1) Loans:

  • Unsubsidized Federal Direct Stafford Loans
  • Subsidized Federal Direct Stafford Loans
  • Federal Perkins Loans
  • Federal Direct Parent (PLUS) Loans received on behalf of student

2) Remaining Funds:

  • Federal Pell Grants
  • Federal Supplemental Educational Opportunity Grants
  • Federal TEACH Grants

Post-Withdrawal Disbursement & Overpayments

If a student earned more aid than was disbursed to him/her, the institution may owe the student a post-withdrawal disbursement. A post-withdrawal disbursement must be made from available grant funds before available loan funds. Loan funds require the confirmation from the borrower that they still wish to have the loan funds disbursed. Grant funds not credited to the student’s account, must be disbursed to the student as soon as possible, but no later than 45 days after the date of the institution’s determination that the student withdrew.

Tusculum will provide a written notification to the appropriate borrower(s) with 30 days of the date of the institution’s determination that the student withdrew that 1) identifies the type of loan and the amount that will either be applied to the student’s account and/or refunded back to the appropriate borrower(s), 2) requests the accept or decline of the post-withdrawal loan disbursement, 3) advises the borrower(s) about their repayment obligation, and 4) gives the borrower(s) a response deadline. Any confirmation received on or before the deadline will be processed by Tusculum as soon as possible, but no later than 180 days after the date of the institution’s determination that the student withdrew. Failure to respond or the receipt of a declination from the student and/or parent will negate the possible post-withdrawal disbursement and no loans funds will be processed.

In the event of an overpayment to the student, Tusculum University has opted to repay all funds to the appropriate Federal Aid Program(s) as prescribed above, which in turns results in the student owing the institution. Tusculum University utilizes a standard collections procedure to collect the student account receivables and will hold the release of any academic transcripts until the obligation is paid in full. Tusculum understands that it has the option to report the students who fail to take positive action to NSLDS and refer them to the Default Resolution Group for collection if it were not repaying the funds itself. Any inadvertent overpayments will be returned within 45 days of the date of the institution’s determination that the student withdrew.

Return of State Aid Funds

The State of Tennessee funding regulations also require a recalculation of State aid programs such as the Tennessee Student Assistance Award (TSAA) and the Tennessee HOPE Scholarship if a student withdraws or changes their enrollment status via schedule changes. Some programs require pre-approval to drop to a lower enrollment status in order to maintain eligibility.