The ugly of financial aid When does repayment become required When a recipient of federal student aid ceases to be enrolled 100 withdrawal prior to the end of payment period or period of enrollment ID: 696035
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Slide1
Return to Title IV R2T4
The ugly of financial aidSlide2
When does repayment become required?
When a recipient of federal student aid ceases to be enrolled (100% withdrawal) prior to the end of payment period or period of enrollment.
Examples: If a student fails to complete at least one course for the semester in which he or she received federal financial assistance.
If the student drops the course(s) prior to the 60% completion date.
The 60% completion date is calculated at the beginning of each semester.
If the student drops from 12 hours to 9 credit hours, the reduction represents a change in enrollment status, not a withdrawal. No
r
eturn calculation is required. Slide3
There really is a method to the madness….Credit Hour Program tracking sheet.Slide4Slide5Slide6
Clock hour program tracking sheet.Slide7Slide8Slide9
In house holdSlide10
Return to the Department of Revenue (DOR)Slide11
Once the student owes money, then what?
If the student has an in house hold:
Student will be contacted by financial aid department informing them of the reason by he or she owes money back to the college and the amount of repayment required.
Both via email and letter.
Student will then be contacted by our business office.
Letters (3) are mailed to the student informing them that repayment of federal financial aid assistance is required and offering to set up a payment plan (1
st
letter), and if the student takes no action, the business will notify them of the deadline for full repayment prior to sending their information to the Department of Revenue (2
nd
letter), and then if no repayment takes place, the student is notified that he or she has been turned over for collection by the Department of Revenue (3
rd
letter).
A negative service indicator is then placed on the students account and enrollment is blocked and no transcript can be issued. Slide12
Once the student owes money, then what?
Once the student has been turned over to the Department of Revenue (DOR) for collection:
The DOR will contact the student via mail that he or she has been reported for collections.
Fees are then imposed for their collection effort.
If the student is employed, the DOR will take action to garnish their wages.
The DOR then notifies the state agencies that regulate taxes and blocks the student from being able to tag/licensure their vehicle, pay property tax, etc. until the debt is repaid.
The students income taxes can be taken by the DOR for repayment.
It negatively impacts their credit report. Slide13
Next steps
Once a student owes money, a hold is placed on their FAFSA account (by the DOR) to block their ability to receive any federal financial assistance to attend any college or university. The hold will remain their until the debt is repaid and the DOR notifies the institution who reported them that the debt has been collected in full.
Even if the student has cash in hand to pay for coursework,
h
e or she cannot enroll at another institution due to not being able to get a transcript. Also most institutions (if not all, of them) have a policy or a rule of the senate that prevents enrolling the student as he or she is not in good academic standing with their previous institution.Slide14
Future financial aid status
This one is tricky, a student MAY or MAY NOT be SAP suspended.
IF
the student falls into a repayment situation in the 1
st
semester of college or has met SAP standards until the time of difficulty, he or she would NOT be SAP suspended. He or she would be on WARNING and could still receive federal financial assistance to come to college.
This student has the potential to find themselves back in R2T4 status.
IF
the student has been struggling prior to this situation, he or she would most likely be SAP suspended.
Once the debt has been repaid, the student would need to complete a SAP appeal to see if financial aid could be re-instated.
A committee would determine the reinstatement of assistance.
Most likely, the student would be required to pay for two classes, earn a 2.0 GPA in those classes, and then submit a new appeal for the upcoming semester. Slide15
What aid are we talking about?
Any and all federal financial aid would need to be repaid for the semester that the student fell into repayment status.
Yes, this includes the loans for the semester or least partial loans for the semester (this is situational).
If the student spends the entire bookstore charge allotment, and if they are full time status and charged full time tuition with fees (in other words the maximum amount of charges allowed), then it COULD take the entire student loan borrowed and the student would be required to repay the full loan for that semester.
If it does not require the full repayment of the loan, the balance then falls under the original promissory note for that loan and the student will not need to repay the full amount for the semester of R2T4.
Not the loans from previous semesters.
Loans from previous semesters could fall into default status during this time period while the student works to repay the current semesters debt.
Pell grant, FSEOG, Teach Grant, Iraq Afghanistan Service Grant, Direct Loans, and Perkins Loans.
Does not impact KEES money.
Work study monies are not included. Slide16
Key to remember…
The date a student expresses that he or she is considering withdrawing form a course is the date used for withdraw.
It is imperative for faculty to note the last date of attendance.
Any
and all
drop forms processed after the mid-term point, need to be sent to
financial aid.