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Return of Title IV Funds Policy

Repayment of Federal Funds: Return of Title IV

If a student receives federal financial aid and stops attending or withdraws from all courses at or before 60 percent of the term is completed, the student will be required to repay all or a portion of the federal aid received, including aid used to pay for college expenses. If the student received a grade of F in all courses for any term, the student will be required to repay a portion of the federal aid received, based on the last date of participation, unless an instructor certifies and documents that the student was participating in at least one class after the 60 percent point of the term or until the end of the term. A term may consist of one or more blocks or modules.

A federal formula dictates the amount of Title IV aid that must be returned to the federal government by the College and the student. This formula applies to a student who is receiving Title IV funds if that student withdraws from the College on or before the 60 percent point in time in the term. The percentage of Title IV aid to be returned is equal to the number of calendar days remaining in the term divided by the number of calendar days in the term. Scheduled breaks of five consecutive days or more are excluded from this calculation.

Return of Title IV Funds Policy Example

The following example illustrates how the federal Return of Title IV Funds policy would affect a student who withdraws from classes at Texas State Technical College Waco:

A student is attending Fall Semester full-time, which is 103 calendar days in length. Classes are scheduled for the entire semester. The student withdraws from classes on the 54th day of the semester.


The student's financial aid and charges are:

Federal Pell grant


Federal Direct Unsubsidized Loan


Federal Direct Subsidized Stafford Loan


Total Financial Aid awarded


Tuition and fees (institutional charges)


Financial aid refund disbursed to the student after tuition and fees are paid


This infographic shows a sample of the formula used to calculate the return of Title IV funds. 

Student withdraws from classes on the 54th day of the semester.

Of the $2,372.86 that needs to be returned to the Department of Education:

College returns (student repays TSTC):

 $ 999.60

Student’s portion:



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

**The College would return $999.60 to the Federal Direct Subsidized Stafford Loan program, creating a balance on the student's TSTC Waco account. The student is responsible for paying their TSTC Waco balance of $999.60.

The student's portion to return is calculated as $2,372.86. The student's remaining loan for the semester is applied towards this amount first. Because the College returned $999.60, the student's loan for the semester has been reduced to $2,135.40, which the student repays to the U.S. Department of Education in accordance with the terms of the Master Promissory Note (by beginning payments six months after graduation or dropping below six credit hours.)

The remaining balance of -$762.14 is from the Federal Pell Grant program. The actual amount which the student must return to the U.S. Department of Education for the grant programs is reduced by 50% of the original grant amount ($1850 x 50% = $925.00). In this example, the student would not owe any Federal Pell Grant program funds. If the student had owed Federal Pell Grant program funds, TSTC Waco would return this entire amount to the U.S. Department of Education for the grant programs – including the amount owed by the school and the amount (if any) owed by the student. The student 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:

Student portion

$ 1,373.26

Loan returned during repayment


Student still needs to return


50% Title IV grant protection

- 925.00

Grant amount remaining


All information is subject to change based on changes to federal law, regulation, or College policy and procedure. If changes are made, students 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. For any student who begins attendance in a payment period or period of enrollment that begins on or includes March 13, 2020, and subsequently withdraws from the period as a result of COVID-19-related circumstances, an institution is not required to return Title IV funds.

This includes students who withdrew during the applicable period for whom the institution has already performed an R2T4 calculation and returned funds. Where returns have already been made, the institution should re-disburse Title IV funds to those students, making required adjustments in COD, crediting students’ ledger accounts, and requesting any necessary funds from G5. In the case of withdrawn students for whom no returns have been made, the institution should:

  1. Perform an R2T4 calculation in order to determine the amount of Title IV funds that would otherwise have to be returned;
  2. Make no adjustments to COD as a result of the withdrawal;
  3. Make no adjustments (as the result of the withdrawal) to the amount of Title IV aid credited to the student’s ledger account.

Institutions that transitioned students to distance learning, closed campus housing or other campus facilities, or experienced other interruptions in instruction are permitted to consider all withdrawals of ground-based students during the covered period to have been the result of circumstances related to the COVID-19 national emergency. Since TSTC met all 3 of these conditions, our college elects to waive the R2T4 requirement to return unearned Title IV grants and loans for all ground-based students who began attendance in the Spring 2020 semester – which is an enrollment period that includes March 13, 2020. TSTC will re-disburse any Title IV grant and loan for ground-based students that had previously been returned and will then perform the calculation again and will not return the funds.

Texas State Technical College 3801 Campus Drive Waco, Texas 76705 254-799-3611
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