Return of Title IV Federal Student Aid Policy
If you withdraw completely from school during the semester, a portion of the total amount of Federal Title IV aid disbursed to you must be returned to the financial aid programs. The portion that must be returned is based on the percentage of time you remained enrolled in school.
For Example: A student who remains enrolled for 10% of a semester will be eligible to keep 10% of the total Title IV aid disbursed to him/her. The balance (or 90%) must be returned to the Title IV program(s). Similarly, a student who remains enrolled for 60% of a semester will be eligible to keep 60% of the total Title IV aid disbursed to him/her. The balance (or 40%) must be returned to the Title IV program(s).
In addition, you begin attendance and do not officially withdraw, you must complete at least one class with a passing grade (A, B, C, or D), or a repayment must be processed based on the mid-point of the semester.
NOTE: No Title IV aid funds are required to be returned if the student remains enrolled for more than 60% of the semester before completely withdrawing.
Title IV Aid & Order of Return
- Unsubsidized Stafford Loan
- Subsidized Stafford Loan
- Pell Grant
- Federal Supplemental Educational Opportunity Grant (SEOG)
- Talent Incentive Program (TIP)
- Funds are not returned to the Federal Work-Study Program
Date of Withdrawal
The Date of Withdrawal is the date you provide official notification to NWTC's Enrollment Services (Student Center, SC240) of your intent to completely withdraw from school. If you unofficially withdraw from school, the Financial Aid Office will use the midpoint of the semester to establish your date of withdrawal.
Repayment
At the time you withdraw, the Student Finance Office will automatically use all or a portion of your institutional refund as payment toward the amount that must be returned to the Title IV programs. You may also be required to repay a portion of the aid funds that were disbursed to you after your charges had been paid. You will be notified/billed for any grant funds that must be repaid immediately.
Failure to resolve the repayment within 45 days will result in your account being sent to the U.S. Department of Education for Collection and a HOLD being placed on all future financial aid eligibility. You will not be allowed to obtain grades and/or an academic transcript. Student loan funds are to be repaid in accordance with the terms of the loan.
Post-Withdrawal Disbursement
The Financial Aid Office will determine if your are eligible to receive Title IV funds that were awarded but not yet disbursed to you at the time of your withdrawal from school. If you are eligible for a post-withdrawal disbursement, we will first apply these funds to your outstanding college charges (if any). Any remaining amount of the post-withdrawal disbursement will be released to you.
If you owe a grant repayment or have an outstanding student loan, any class refund due to you may be claimed by the Financial Aid Office and returned to the lender or the proper financial aid account.
Drug-Related Convictions and Student Ineligibility
Federal regulations state that students who have been convicted under federal or state law for possession or sale of a controlled substance will be suspended from Title IV eligibility.
If you are convicted of an offense involving the possession of an illegal substance, the ineligibility period is:
- First offense = 1 year
- Second offense = 2 years
- Third offense = Indefinite
If you are convicted of an offense involving the sale of an illegal substance, the ineligibility period is:
- First offense = 2 years
- Second offense = Indefinite
You may regain eligibility by successfully completing a drug rehabilitation program that complies with criteria established by the Department of Education. Please see the Enrollment Services for more details.
Tax Requirements
The Tax Reform Act of 1986 included an amendment to Section 117 of the IRS that subjects scholarships and fellowships to taxation. The law notes that the only amount that can be excluded from gross income is the amount of scholarship or fellowship grant received by the student for tuition and fees, books, supplies, and equipment (course-related expenses). Other expenses not actually required for enrollment at the school or in a course, such as room and board or non-required equipment and supplies, may not be excluded.
We recommend that if you are receiving a grant or scholarship, you save and retain financial aid award letter, amended award letters, registration forms, and receipts for tuition, fees, books, supplies, and required equipment.
If you have specific question, please contact a tax professional.
Hope Scholarship
The Hope Scholarship is a tax credit, not a scholarship. See this link for important information.