Terms & Policies

Return to Title IV Policy for Salem College of Hairstyling and Central College of Cosmetology

The current federal refund policy applies to all students receiving Title IV federal financial aid who withdraw, are dismissed, stop attending, or take a leave of absence from the College during the payment period in which they are enrolled. If a recipient of Title IV aid withdraws during a payment period, the College must calculate the amount of Title IV aid the student earned. Unearned Title IV funds must be returned to the Title IV programs. Earned Title IV Funds Title IV funds used to cover educational costs according to the length of time the student was enrolled before withdrawing. The amount of funds earned is directly proportional to the number of clock hours scheduled to have been completed in the payment period as of the student's withdrawal date, by the total number of clock hours in the payment period. If the resulting percentage is greater than 60% a student is considered to have earned all aid. Unearned Title IV Funds The amount of assistance awarded under Title IV that has not been earned by the student and must be returned to the programs. The unearned Title IV funds percentage is determined by subtracting the earned Title IV percentage from 100. To calculate the amount of unearned Title IV funds, multiply the total disbursed federal financial aid by the unearned Title IV refund percentage. Withdrawal from School 1. A student notifies the institution of his/her withdrawal in writing (Official Withdrawal). The official withdrawal date will be the date the school was notified. 2. A student on an approved Leave of Absence notifies the school that he/she will not be returning. The date of withdrawal shall be the last date of attendance. 3. Students not returning form an Authorized Leave of Absence as scheduled will be unofficially withdrawn from the school as of the last day of attendance. 4. A student expelled/terminated by the college will be withdrawn based on their last day of attendance. 5. A student that misses 14 consecutive calendar days shall be withdrawn based on their last date of attendance. The school will monitor attendance at least once every 14 calendar days. (unofficial withdrawal)

Examples Title IV Refunds 1. If the student receives more federal student aid than the amount earned by the college, the student or both must return the unearned funds in the specified order: 1. Unsubsidized Direct Loans; 2. Subsidized Direct Loans; 3. Direct Plus Loans; 4. Federal Pell Grants; 5. Iraq and Afghanistan Service Grant. The amount of federal student aid to be returned is determined by subtracting the amount of earned Title IV aid from the amount of Title IV aid that was disbursed to the student. 2. Aid due from the college: a. The college is not required to return its share before the student. Rather it is the return calculation of the amount of assistance that the college if responsible for returning to the Title IV accounts that must be calculated first. Thus, the student’s repayment obligations are determined after the college’s share is calculated. b. The school must return the lessor of: i. The amount of Title IV funds that the student does not earn: or ii. The amount of institutional charges that the student incurred for the payment period or period of enrollment multiplied by the percentage of funds that was not earned. iii. The percentage not earned is determined by subtracting the percentage of Title IV aid earned from 100%. iv. The college must return unearned funds for which it is responsible as soon as possible but no later than 45 days from the determination of a student’s withdrawal. 3. If the college is not required to return all of the excess grant funds, the student must return the remaining amount within 30 days of notification or make repayment arrangements with the college. The college must return Title IV funds to the program from which the student received aid during the payment period or period of enrollment, in the order listed above in section 1 under Returning of Title IV aid. 4. Aid Due From Student: a. A student is responsible for all unearned Title IV program assistance that the college is not required to return. The initial amount of unearned federal student aid due from the student is determined by subtracting the amount returned by the college from the total amount of unearned Title IV funds to be returned. This is called the initial amount due from the student because a student does not have to return the full amount of any grant repayment due. Therefore, the student may not have to return the full initial amount due. b. Any loan funds that the student must return, they repay in accordance with the terms of the Master Promissory Note. That is, they make scheduled payments to the holder of the loan over a period of time at the end of the grace period. c. Regulations limit the amount a student must repay to the amount by which the original overpayment amount exceeds 50% of the total grant funds disbursed or could have been disbursed by the student for that payment period. d. The initial amount of unearned Title IV grant aid due from the student is found by subtracting the loans to be repaid by the student from the initial amount of unearned aid due from the student. e. Any amount of unearned Pell Grant funds that a student must return is called an overpayment. The amount of grant overpayment due from a student is limited to the amount by which the original grant overpayment exceeds half of the total Title IV grant funds disbursed and could have been disbursed to the overpayment is $50.00 or less. The college will notify the student within 30 days of withdrawal overpayment. f. Grant overpayments may be resolved through: - Full and immediate repayment to the school - Overpayment collection procedures negotiated with Debt Resolution Services. g. Students who owe overpayments as a result of withdrawals initially will retain their eligibility for Title IV funds for a maximum of 45 days from the earlier of: 1. The date the college sends the student notice of overpayment. 2. The date the college was required to notify the student of the overpayment. h. Within 30 days of determining that a student who withdrew must repay all of a Title IV grant, a college must notify the student that he/she must repay the overpayment or make satisfactory arrangements to repay it. The college must inform the student of the following items in its notifications: i. The student owes an overpayment of Title IV funds. j. The student eligibility for additional Title IV funds will end if the student fails to take positive action by the 45th day following the date the college sent or was required to send notification to the student. k. There are two actions a student can take to extend his/her eligibility for Title IV funds beyond 45 days: 1. The student may repay the overpayment in full to the college. 2. The student may sign a repayment agreement with the Department of Education. l. If the student fails to take one of the above listed actions during the 45-day period, the student’s overpayment immediately must be reported to the NSLDS and referred to the Debt Resolution Services for collection. m. The student should contact the college to discuss his/her options. If at any time a student who previously negotiated a repayment arrangement fails to comply with the terms of his/her agreement to repay, that student immediately becomes ineligible for additional Title IV funds. All students will receive a copy of the College Catalog, which includes the Return to Title IV procedures prior to enrollment.