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When a student who receives financial aid withdraws from the University, a determination must be made as to how much, if any, of the federal and/or institutional funds must be returned. The date used to calculate refunds or repayments is when the student officially notifies the school of the intent to withdraw or the midpoint of the payment period if the student did not notify the school or begin the withdrawal process. 

The federal student aid refund/repayment policy is applicable when a student withdraws from Morehead State University.

For students who receive Title IV funds (federal financial assistance) and withdraw during a payment period or enrollment period, the amount of financial aid they have earned up to that point is determined by a specific formula. If a student receives less assistance than the amount they earned at the time of withdrawal, they will be eligible to receive any additional funds due them. If a student receives more assistance than earned at the time of withdrawal, the excess funds must be returned to the appropriate federal program(s). 

The amount of assistance a student earns is determined on a pro-rata basis. Pro-rata refund calculations apply to any student attending this institution and withdrawals within 60% into the period of enrollment for which the student has received Title IV assistance. Once a student has completed more than 60% of the payment period or period of enrollment, all of their assistance has been earned. 

There are six basic steps to the "Return of Title IV Funds" formula for calculating the amount of funds that must be returned, if any, to the Title IV programs. These steps are as follows: 

  1. Determine the date of withdrawal and percentage of payment period attended by the student.
  2. Calculate the amount of Title IV aid earned by the student.
  3. Compare the amount earned and amounts disbursed to determine the amount unearned.
  4. If the amount earned exceeds the amount disbursed, determine late disbursement.
  5. If the amount earned is less than the amount disbursed, determine the amount of Title IV aid to be returned.
  6. Calculate the portion of funds to be returned by the institution and the student. 

If a student receives excess funds that must be returned, the school must return a portion of the excess equal to the lesser of 

  • The institutional charges multiplied by the unearned percentage of the student's funds, or 
  • The entire amount of the excess funds. 

If the school is not required to return all of the excess funds, the student must return the remaining amount. Any loan funds that a student must return, the student (or parent for a PLUS loan) will repay following the terms of the promissory note. The student will make scheduled payments to the holder of the loan over a time period. 

If a student is responsible for returning grant funds, they do not have to return the full amount. The law provides that students are not required to return 50% of the grant assistance they receive which is their responsibility to repay due to withdrawal. Any amount that a student is required to return is a grant overpayment, and the school will make arrangements with the student to return the funds. 

The amount of the funds returned to the Title IV programs may not exceed the amount the student received for the period of enrollment for which the student has been charged and must be allocated to the Title IV programs in the following order:

  1. Federal Unsubsidized Stafford Loans
  2. Federal Subsidized Stafford Loans 
  3. Perkins Loans
  4. Federal PLUS Loans
  5. Direct PLUS Loans
  6. Pell Grants
  7. FSEOG
  8. Other Title IV programs

After Title IV programs are reimbursed, the remaining funds would be returned to State and/or other programs.