Financial Aid

Return and Repayment of Title IV Funds

Return of Title IV Funds Policy

The student and their family are responsible for financing the student’s education. Once the family’s resources for education have been exhausted, financial aid is available to assist with the remaining costs.

If a student receiving Title IV funds (Pell Grant, SEOG, and Direct Loans) withdraws from all classes before completing the semester, a Title IV withdrawal calculation must be performed. This calculation is also applicable to students who enroll in both the first and second summer sessions, but fail to complete both sessions.

HCU must calculate the amount of Title IV funds the student has earned for the period of enrollment. If the student has received more funds than they have earned, the unearned funds must be returned to the appropriate source. This could result in a balance owed to the University.

Once the Return to Title IV Funds calculation is completed, students will be notified via their HCU email. At that point, any outstanding balance may appear on the student’s account and must contact the Students Account Office to make payment arrangements.

Students who have received Title IV aid are subject to both the University’s refund policy and the Title IV formula outlined below.

View Institutional Refund dates

Formula applied to Title IV Funds

The return of Title IV funds formula calculates the amount of Title IV (federal) aid that a withdrawn student is entitled to receive relative to the percentage of the term that the student attended. This calculation applies to both students who officially withdraw through the Office of Academic Records and for those who unofficially withdraw by failing to attend the courses that they signed up for in each term. For example, if a student withdraws after attending 20% of the term, the student earns 20% of any awarded Title IV aid that the student was eligible to receive before withdrawing. However, a student who attended more than 60% of the term earns 100% of the aid.

The formula may be broken down into five steps:

  1. Determine the percentage of the semester the student attended before withdrawing. The percentage of the semester attended becomes the percentage of aid earned. If the percentage attended is greater than 60%, the percentage earned becomes 100%.
  2. Determine the amount of Title IV aid earned by multiplying the total Title IV aid (other than Federal Work Study) for which the student qualified by the percentage earned. Total Title IV includes both aid that was disbursed and aid that could have been disbursed.
  3. Compare the amount earned to the amount actually disbursed prior to withdrawal. If more aid was disbursed than was earned, determine the amount of Title IV aid that must be returned. If less aid was disbursed than was earned, the student is entitled to a post-withdrawal disbursement for the difference.
  4. Allocate the responsibility for returning unearned aid between HCU and the student.
  5. Distribute the unearned aid back to the Title IV programs.

Order of Return of Funds

Houston Christian University is authorized to return any unearned aid in accordance with federal regulations. When federal financial aid is involved, the calculated amount of the Return of Title IV Funds (R2T4) funds will be allocated in the following order, up to the total net amount disbursed from each source:

  • Unsubsidized Direct Loans
  • Subsidized Direct Loans
  • Direct PLUS Loans
  • Pell Grants
  • Iraq and Afghanistan Service Grants
  • TEACH Grants

Unearned Funds/Returns

The institution has 45 days from the date it determines a student has withdrawn to return all unearned Federal Aid for which it is responsible. The Office of Financial Aid will send the student an email to their HCU email explaining the return of funds, in accordance with the Return of Funds policy, including the amount and type of funds that were returned. A copy of the email/notification will be stored in the student’s file. If the return of federal aid creates a balance due, the Student Accounts office may place a hold on the student’s account until the balance is paid in full.

Post-Withdrawal Disbursements

If you did not receive all of the funds you have earned, you may be eligible for a post-withdrawal disbursement. The Office of Financial Aid will notify the student (or parent, if the disbursement involves a Parent PLUS Loan), and they will have 14 calendar days from the notification date to accept the post-withdrawal disbursement of Federal Loans. Pell Grant funds will be automatically disbursed based on the amount the student has earned. If the student or parent does not respond within the allowed time frame, or if the student declines the funds, any earned funds held by the institution will be returned to the Department of Education.

A credit balance that occurs as a result of a post-withdrawal disbursement will be refunded to the student or parent (PLUS loans) as soon as possible.

Students will receive a notice of Post-withdrawal Funds will be made in the following order:

  1. Pell Grant
  2. SEOG
  3. Teach
  4. Direct Subsidized Loan
  5. Direct Unsubsidized Loan
  6. PLUS Loan

Withdraw Policy

To officially withdraw from HCU, you must contact the following offices in the following order: (1) print an “Add/Drop” form, (2) Academic Advising, (3) Office of Financial Aid, (4) Office of Academic Records. The Office of Academic Records provides a form which guides you through the process. You may need to visit the Student Account’s Office to discuss adjustments to your account.

Examples of refund calculations are available in the Office of Financial Aid.

Repayment Policy

If a student totally withdraws from the university on or before the first day of classes of a payment period, and the student received a cash disbursement for non-institutional costs under any Title IV program (excluding Federal CWSP and Direct Loans) for that period, the student must repay any cash disbursement which is determined by the university to be an overpayment.

In determining whether a student received an overpayment, the university will subtract from the cash disbursement received by the student the educational costs incurred for non-institutional charges (to include room and board, books and supplies, and miscellaneous expenses) for that payment period up to the date of withdrawal. The cost of room and board will be calculated on a daily basis equal to the current rent being charged by the university. The cost of books, supplies, and miscellaneous expenses will be determined by the number of days that the student is enrolled. The university will determine the amount of the refund, and the amount will be allocated to the Title IV programs in the following order:

  1. Direct Unsubsidized Loans
  2. Direct Subsidized Loans
  3. PLUS Loan
  4. Federal Pell Grant
  5. Federal SEOG Program
  6. TEACH Program
  7. Other Title IV Aid Programs
  8. Other Federal sources of aid
  9. The student

The university will determine the amount of any repayment, and the amount will be allocated in the following order:

  1. Federal Pell Grant
  2. Federal SEOG Program
  3. TEACH Program
  4. Other Title IV programs
  5. Other Federal, State, private, or institutional aid.

In cases where the student drops courses and has already received full payment of financial aid awards from federal sources, repayment of unused funds may be necessary.

Information included in this publication is subject to change. Contact the Office of Financial Aid with any questions you may have about this information.