Office of Student Financial Aid

Return of Title IV Funds

When a student withdraws, either officially or unofficially, on or before completing 60 percent of the term, and has received federal Title IV funds in the form of a Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (SEOG), Teacher education Assistance for College and Higher Education Grant (TEACH), Iraq Afghanistan Service Grant, Federal Perkins Loan, Federal Direct Loan, or a Federal PLUS Loan, the federal government requires that the University of Toledo review the student’s eligibility for those funds. Students earn their Title IV aid by attendance so if a student ceases attendance the financial aid office will apply a federally mandated formula to determine how much of the federal funding was earned up to the time of withdrawal. This review and recalculation is called Return of Title IV Funds (R2T4).

The Title IV funds that were disbursed in excess of the earned amount must be returned to the federal government by the university and/or the student. If the student received a refund from financial aid, which was to be used for education-related personal expenses or non-university housing expenses, the student may be required to return a portion of those funds to the university. This portion represents funds that were intended to pay education-related expenses through the end of the term. The amount to be returned to the university will be determined by the student’s institutional costs, student refunds received for non-university expenses and the funds that must be returned to the government.

The Title IV funds that were disbursed in excess of the earned amount must be returned to the federal government within 45 days by the university and/or the student.

The order in which funds will be returned are:

1) Unsubsidized Direct Student Loans

2) Subsidized Direct Student Loans

3) Federal Perkins Loan

4) PLUS loans

5) Federal PELL Grant

6) Federal Supplemental Educational Opportunity Grant (SEOG)

7) Teacher education Assistance for College and Higher Education Grant (TEACH)

8) Iraq Afghanistan Service Grant

A student may be eligible for a post-withdrawal disbursement if, prior to 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, it will be processed for the student and a refund will be issued within 14 days of the credit balance.

If the post-withdrawal disbursement (PWD) includes loan funds, University of Toledo must get the student’s permission before it can disburse the loan. Students may choose to decline some or all of the loan funds so as not to incur additional debt. A notification will be sent out to the student if they are eligible for a PWD that includes loan funds. The student must return the signed, original document to the School within 14 days.

University of Toledo may automatically use all or a portion of the PWD of grant funds for tuition and fees. However, the school needs the student’s permission to use the PWD of grant funds for all other school charges if the student has not submitted a Federal Title IV authorization . If the student does not give his/her permission, the student will be refunded the funds. However, it may be in the student’s best interest to allow the school to keep the funds to reduce the student’s debt at the school.

It is also important to understand that accepting a PWD of student loan funds will increase a student’s 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 in future terms.

How is the withdrawal date determined?  The amount to be returned to the federal government will be calculated using the date the student officially withdrew from classes or, in the case of an unofficial withdrawal, the last date the student was involved in an academically related activity. An unofficial withdrawal is when a student stops attending classes, but does not withdraw from those classes or notify the university.

The University of Toledo does not have a formal leave of absence policy that meets the Department of Education's guidelines.

 

Last Updated: 10/1/19