Return of Title IV Funds (R2T4)

Students “earn” Title IV funds by remaining enrolled for the payment period for which they received federal student aid. The Federal Return of Title IV Funds policy mandates that students who officially or unofficially withdraw from all classes may only keep the financial aid they “earned” up to the time of withdrawal. State and institutional programs require similar treatment. Financial Aid funds that were disbursed in excess of the amount “earned” must be repaid.

Financial aid in excess of the amount “earned” is reduced in the following priority:

  1. Federal Pell Grant
  2. Federal Supplemental Educational Opportunity Grant (SEOG)
  3. State of Illinois programs
  4. Institutional and departmental funds
  5. Private financial resources

Calculations are done on a case-by-case basis after the withdrawal date is established.

Title IV funds refer to federal student aid that is authorized through Title IV of the Higher Education Act.  At Shawnee Community College, Title IV funds refer to the Federal Pell Grant, the Federal Supplemental Education Opportunity Grant (FSEOG), and the Federal Work-Study program.  Shawnee Community College no longer participates in the federal student loan programs.  Only Pell and FSEOG are considered for the purpose of Return of Title IV funds.

Title IV funds are earned by a student by enrolling in and attending eligible college classes.  Whenever a student withdraws from all classes (whether officially or unofficially) before 60% of the semester has been completed, a portion of the Title IV Aid that the student was awarded must be returned to the federal government, since it is considered to be “unearned” financial aid.  That percentage of the unearned aid that would have been used to pay tuition, fees and books is returned by the school.  Some portion of the remaining “unearned” aid must be returned by the student.  It is important that students be aware of this consequence of officially or unofficially withdrawing from all classes.

Whenever SCC becomes aware that a student has withdrawn from all classes, the Financial Aid Office will determine if unearned Title IV aid must be returned, and the amount that the college and the student, respectively, must return.

If the student is required to return a portion of the Title IV funds, SCC will notify the student of the requirement and amount to be returned within 30 days of SCC becoming aware that the student has withdrawn.  The student may return the money, or arrange a repayment plan through the Department of Education.  If the student has not returned the required unearned funds or set up a repayment plan with the Department of Education within 45 days of the notification, the college will report an overpayment of Title IV funds to the Department of Education through the National Student Loan Data System.  The student will be ineligible for any further Title IV funds for attendance at any college or university until repayment has been arranged.  Examples of the process used to determine unearned Title IV funds to be returned can be viewed by the student at under the Financial Aid section.