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Repayment of Financial Aid Funds
If a student receives federal student aid funds withdraws from all their classes or does not complete any of their classes successfully, they could OWE money back to the U.S. Department of Education. This includes money you received in grants and loans.
The Financial Aid Office is required by the federal government to calculate the amount of federal aid a student has earned according to the day the student withdrew or the last day of reported school activity for the semester.
Calculation
The portion of financial aid to be returned is determined by the percentage of financial aid not earned by the student. The percentage of unearned aid is calculated using the following formula:
Total number of calendar days in the semester not completed by the student
Divide by the total number of calendar days in the semester.
If the calculation results in the student earning 60% or more of their financial aid funds, no repayment will be required.
If the results determine the student withdrew before 60% of the semester, the student will be billed for a portion of the financial aid funds received. The student will be given 45 days to repay the funds in full or make payment arrangements with the Department of Education. Students must first contact the Financial Aid Office for assistance with payment arrangements.
EXAMPLE: A student receives a $1,000 grant. If there are 100 days in the term and you drop out on the 26th day, then you earned 26% or your grant. The Financial Aid Office will multiply your grant money and figure out what you earned, and did not earn.
- $1,000 grant x 26% = $260 earned; $1,000 x 74% = $740 unearned
The college will owe some of the money back depending on the number of units you took: You took 12 units at $11 each = $132 x 74% (unearned) = $98 the college has to pay.
You will have to pay back the unearned amount, minus the college's share, and multiply by 50%: $740 - $98= $642 x 50% = $321 you have to pay the federal program.
Don't worry if you do not understand the calculation, the Financial Aid Office will calculate the amount for you.
You must pay back the money according to the normal rules of the loan program if you receive LOAN money and withdraw.
You do not own anything if you receive WORK money and withdraw. You keep the salary you earned.
Consequences of Outstanding Repayments Obligation:
SCC does not have the authority to waive or write off the repayment requirement regardless of the reason for the withdrawal, including extenuating circumstances such as illness, accident or grievous personal loss.
A student who fails to return the unearned Federal Financial Aid funds will be referred to the U.S. Department of Education for collection.
Until the repayment issue is resolved, the student's record will be "flagged" every time a student files a Free Application for Federal Student Aid (FAFSA). A student in repayment is ineligible for financial aid at any other institution in the nation.
Overpayments / Overawards
Overpayments and/or overawards may occur during the
process Federal and state regulations do not allow
students to receive aid which exceeds their financial
eligibility. An overaward may occur in the following
situations:
- change in budget or housing status
- unreported aid from outside resources (scholarships, grants, stipends,
etc.)
- an increase in family contribution as a result of corrections made to the
Student Aid Report (SAR)
- changes in enrollment status
- human error in calculation or data entry of an award(s)
- aid awarded after initial award notification
Students are required to repay all assistance for which they are
determined to be ineligible.
Repayment
/ Recalculations
Financial aid second disbursement will be issued
to students with nine (9) or more eligible units on November 2, 2007.
The Financial Aid Office will verify all eligible units for the second
disbursement on October 30, 2007. Students
who add courses after October 30, 2007 and through November 2, 2007 may come to
the Financial Aid Office to have their names placed on an award adjustment sheet
for further financial aid consideration. Waitlisted
courses will not be counted toward a student’s enrollment status.
After November 2, 2007, financial aid will not be recalculated for
enrollment status changes and no additional financial aid funds will be issued.
Students who have failed to maintain enrollment in the number of units
they were paid for, will be sent a notice to repay the difference in their aid
eligibility. This applies to student’s who were paid for half time (6 units)
enrollment prior to November 2, 2007 and have dropped in units.
If
you are required to repay, you will be sent a separate notice.
Students who are required to repay will have 45 days to repay the
unearned amount. Students who fail
to repay will be reported to the U.S. Department of Education.
Additionally, students who are required to repay are not eligible for
future financial aid until the amount owed is repaid or satisfactory repayment
arrangements are made with the U.S. Department of Education.
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