Repaying Federal Funds

The college and student are both responsible for returning unearned federal financial aid.

The college must return to the federal government the percentage of unearned aid multiplied by either the institutional charges or disbursed aid, whichever is less. The percentage of unearned aid is determined by the federal Return of Title IV funds (R2T4) policy.

The student must return any remaining unearned grant funds that are not sent back by the college.

Refunds to Title IV programs are made in the following order:

  1. Federal Direct Unsubsidized Loan.
  2. Federal Direct Subsidized Loan.
  3. Federal Direct Parent PLUS loan.
  4. Federal Pell Grant.
  5. Federal Supplemental Educational Opportunity Grant.
  6. Iraq and Afghanistan Service Grant.

Return of funds calculations do not need to be performed when:

  • Your only source of federal aid is college work study.
  • You drop all classes before the classes have begun, or when the college cannot document at least one day of class attendance. In this situation, all financial aid must be returned.

How to Repay Federal Aid

We will notify you of any changes to your financial aid package as a result of the R2T4 calculation, and if you owe federal funds to the government.

Amounts that you must return will first be applied to federal loans. You will be permitted to repay loans based on the terms of the Master Promissory Note.

A grant overpayment is the amount you are expected to repay if you have been awarded funds that were not earned. If the grant overpayment cannot be paid in full, a repayment plan may be arranged with the U.S. Department of Education.

If any money is owed to the college resulting from the return of federal funds used to cover tuition and fees, you will be billed by GRCC's Cashier’s office.

 

Deadlines for Returning Federal Funds

You are given 45 days to pay the college the amount of your overpayment.

If payment is not made to the college within this time frame, the Financial Aid office will refer the overpayment debt to the U.S. Department of Education for collection.

 

If Your Funds Are Not Repaid

If you owe an overpayment of Title IV funds you are ineligible for further disbursements from the federal financial aid programs at any institution until the overpayment is paid in full or payment arrangements are made with the U.S. Department of Education.

A hold will be placed on your college records and account until the amount due to the school for returned funds is repaid or the overpayment is resolved.

 

Regaining Financial Aid Eligibility

The Financial Aid office will use data from the NSLDS to update and/or correct overpayment information. A copy of an official letter from the U.S. Department of Education stating that the overpayment has been resolved will also be accepted. Successful resolution will result in reinstatement of federal aid eligibility.