Return of Title IV Funds

Return of Title IV Funds (R2T4)

Students who have received (or who are eligible to receive) federal financial aid and who withdraw from all their classes prior to the 60% point in time of the semester, are subject to a recalculation of their awards based on the amount of aid earned.

The amount of aid earned is determined by the number of days the student enrolled prior to withdrawing from classes. Any financial aid the student received in excess of the earned amount must be repaid to the college. The college will return the fund to the appropriate source.

The student is required to pay the college any unearned aid they have received. The FAO will email the student a notification of change in eligibility. HCC will return all funds required by the school and those funds to be returned on behalf of the student. Prior to 2013-2014, a student who owed a financial aid repayment was not be allowed to receive further financial aid until the funds were repaid and if not repaid, the college reported the a grant overpayment to the US Department of Education, National Repayment Center.

The college will retain all tuition and fee charges if the student withdraws after the refund period. The college will adjust tuition and fee charges if the student withdraws during the refund period.

As a result of the required Return of Title IV Refund Calculation, there may be instances where students must decide if they want anticipated earned aid to be applied to their account. In such instances, the FAO will send a letter to the student. Students must reply to the FAO in writing by ten days to benefit from a post-withdrawal disbursement.
Funds to students will be advanced in the following order:

• HCC Employee/Dependent Tuition Waiver

• Third Party Billing

• Montgomery GI Bill/ Reserve Educational Assistance Program

• AmeriCorps

• Alumni Discount

• Tuition Exchange

• Non-institutional Grants/Scholarships/Sponsorships (private)

• College non-need-based scholarships (merit)

• College non-need-based scholarships (departmental)

• Federal Scholarships

• State Scholarships

• Federal Pell Grant

• Federal Supplemental Opportunity Grant (FSEOG)

• Institutional Need-based Grants/Awards

• Federal Subsidized Stafford Loan

• Federal Unsubsidized Stafford Loan

• Federal PLUS Loan

• Alternative Loan (only at the request of the student)

• Federal Work-study or Texas Work-study

Funds returned as a result of R2T4 will be refunded in the following order:
• Federal Unsubsidized Stafford Loan

• Federal Subsidized Stafford Loan

• Federal PLUS Loan

• Federal Pell Grant

• Federal Supplemental Opportunity Grant (FSEOG)

• TEACH Grant

• Iraq and Afghanistan Service Grant

R2T4 Example:

Mary Johnson is receiving Title IV grants and loans for the fall semester. The start date is January 8 and end date is May 4. There is 7 days for scheduled spring break – no classes.

  • Tuition and Fees = $1,000
  • Pell Grant disbursed = $1400
  • FSEOG disbursed = $1200

Mary withdrew from all classes on January 18. Mary attending a total of 11 days during a period of 110 calendar days, calculated at 10% of the semester. Because this percent is 60% or less, the Percentage of Title IV aid earned is 10%. Unearned is 90%.

  • Mary was disbursed $2600 and earned 10% or $260. 
  • Mary’s tuition and fees is $1000. 
  • The amount of unearned charges is $900 (1000 x 90%). This amount is due from the school.
  • Unearned aid is $2340 (2600 – 260).

Amount of unearned aid due from the student is $2340 - $900 = $1440. Part of this return is protected from return of Title IV, or 50% of the total grants or $1300. Student is responsible for returning the difference of $1440 - $1300 = $140.
The school will return the $900 and the $140 (on behalf of the student).
The school will reduce the Pell Grant by $1040, leaving the student with a Pell award of $360. The student will be billed for the $1040.