Return of Title IV Funds Considerations

 

Unless an institution receives funds under the reimbursement or heightened cash management monitoring payment methods, a student or parent may provide an optional authorization for the institution to hold his or her Title IV credit balance refund under 34 CFR 668.165(b)(1)(ii). Under that authorization, the institution may retain Title IV funds in excess of the prorated amount. If this occurs and the student subsequently withdraws from a non-term program measured in either clock or credit hours, under 34 CFR 668.22(g)(3) the institution must use as “institutional charges” in Step 5 of the Return of Title IV Funds calculation, the greater of:

The prorated amount of the student’s institutional charges as determined under 34 CFR 668.164(c)(5); or

The amount of Title IV funds that the institution retained as of the student’s withdrawal date, which may exceed the prorated amount as a result of the student or parent’s authorization for the institution to retain those funds.

Additionally, when a student withdraws, the Department’s longstanding guidance limits the amount of the Title IV aid that an institution must return to the Department for aid credited for certain types of unreturnable equipment, even if charges for such equipment would otherwise be considered an institutional charge under 34 CFR 668.164(c)(1)(i). When performing a Return of Title IV Funds calculation, an institution may exclude from institutional charges the total documented cost of unreturnable equipment and the documented cost of returnable equipment if not returned in good condition within 20 days of withdrawal. Note that the amount that may be excluded is the amount that the institution actually paid for the materials, not necessarily what it charged students to purchase them.