Return of Title IV Funds

Return of Title IV Funds Policy

If you receive federal financial aid and stop attending or withdraw from all courses at or before 60 percent of the term is completed, you must repay all or some of the federal aid you received.

If you received a grade of F in all courses for any term, you must repay a portion of the federal aid you received. The amount you owe will be based on the last date you participated in a class, unless an instructor certifies that you were participating in at least one class after 60 percent of the term has passed.

How much do I have to return?

A federal formula dictates the amount of Title IV aid that both you and TSTC must return to the federal government.

Percent of aid to be returned = (Number of calendar days remaining in the term) / (Number of calendar days in the term)

Scheduled breaks of five consecutive days or more are not counted.


Pat is a full-time student attending TSTC in Waco for the fall semester. The semester is 103 calendar days long. Classes are scheduled for the entire semester. Pat withdraws from classes on the 54th day of the semester.

Pat’s financial aid and charges for the full term are:

Federal Pell grant
Federal Direct Unsubsidized Loan
Federal Direct Subsidized Stafford Loan
Total Financial Aid awarded
Tuition and fees
Financial aid refund disbursed to the student after tuition and fees are paid


Completed days
Total days in term
/ 103
Percent of aid earned
Pat withdrew from classes on the 54th day of the semester. This number is divided by the length of the full term: 103 days. The result is the percentage of aid earned
Percent of aid earned
Total financial aid awarded
X $4,985.00
Aid earned based on completion
Multiply the percentage of aid earned by the total financial aid awarded to determine the amount of aid earned.
Total financial aid awarded
Aid earned based on completion
- $2,612.14
Financial aid to be returned
Subtract the amount of aid earned from the total amount of financial aid awarded to determine the amount of financial aid that must be returned.

The amount TSTC must return

  1. The total amount of aid that must be repaid is $2,372.86.
  2. Multiply the institutional charges of $2,100.00 by the unearned percentage of 47.6%, or $999.60.
  3. TSTC must return the lesser of these two, or $999.60. The remainder is Pat’s responsibility.

The amount Pat must return

  1. Pat repays TSTC for its portion of the financial aid1: $999.60.
  2. Pat repays the U.S. Department of Education2: $1,373.26.
  3. Total amount Pat must repay3: $2,372.86.

How funds are returned

Funds are returned to loan programs first and then grant programs.

1The College returns $999.60 to the Federal Direct Subsidized Stafford Loan program, creating a balance on Pat’s TSTC Waco account. Pat is responsible for paying this balance.

2The amount Pat must return is $2,372.86. Pat’s remaining loan for the semester is applied to this amount first. Because TSTC returned $999.60, Pat’s loan for the semester has been reduced to $2,135.40. Pat repays this amount to the U.S. Department of Education according to the terms of the Master Promissory Note.

3The remaining balance of -$762.14 is from the Federal Pell Grant program. The actual amount which Pat must return is reduced by 50% of the original grant amount ($1850 x 50% = $925). In this example, Pat would not owe any Federal Pell Grant program funds. If they had, TSTC in Waco would return this entire amount to the U.S. Department of Education, including the amount owed by the school and the amount (if any) owed by the student. Pat is then responsible for repaying this amount to the College.

We do not require the student to repay any funds to the Federal Pell Grant program and therefore do not report students who owe funds to NSLDS.

Student portion to be returned to federal financial aid programs:

  1. Student portion: $1,373.26.
  2. Loan returned during repayment: $2,135.40.
  3. The student still needs to return: $(762.14).
  4. 50% Title IV grant protection: – $925.
  5. Grant amount remaining: $(1,687.14).

This information is may change based on changes to federal law, regulation, or TSTC’s policies and procedures. If changes are made, you must abide by the new policy.


Section 3508 of the CARES Act directs the Secretary to waive the statutory requirement for institutions to return Title IV funds as the result of student withdrawals related to a qualifying emergency. If you began attendance in a payment or enrollment period that includes March 13, 2020 and later withdrew because of COVID-19-related circumstances, TSTC is not required to return Title IV funds.

This includes students who withdrew during this period for whom TSTC has already performed the calculation and returned funds. Where returns have already been made, TSTC should:

  • Re-disburse Title IV funds to those students,
  • Make required adjustments in COD, crediting students’ ledger accounts, and
  • Request any necessary funds from G5.

If no returns have been made, TSTC should:

  • Determine the amount of Title IV funds that would otherwise have to be returned.
  • Make no adjustments to COD as a result of the withdrawal.
  • Make no adjustments (as the result of the withdrawal) to the amount of Title IV aid credited to the student’s ledger account.

TSTC can consider all withdrawals of ground-based students an interruption related to the COVID-19 national emergency if it:

  • Transitioned all students to distance learning.
  • Closed campus housing and facilities.
  • Saw other interruptions in instruction.

Since we met all three of these conditions, we will waive the requirement to return unearned Title IV grants and loans for all ground-based students who began attending in the Spring 2020 semester. TSTC will re-disburse any Title IV grant and loan for ground-based students who had previously been returned, and will then perform the calculation again and will not return the funds.

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