Return of Title IV Funds Policy
This policy sets out the provision related to the return of Title IV funds for students in receipt of US Direct Loans.
Background
US Direct Loan recipients who discontinue or take an unapproved leave of absence from their course will be required to return any unearned loan funds.
University refund and enrolment policies
This policy should be read in conjunction with the following University policies:
- Enrolment and Timetabling Policy (MPF1294)
- Student Loans, Fees and Charges Policy (MPF1325)
- Course withdrawal Procedure
- Leave of Absence Procedure
Course Withdrawal and Leave of Absence
The University is required to perform a Return of Title IV (R2T4) calculation for US Direct Loan recipients who discontinue or are taking an unapproved leave of absence from their course to determine the earned and unearned loan funds (if any).
Course Withdrawal
If you decide to discontinue your course please follow the course withdrawal process.
Leave of Absence
Please remember for the purposes of US Direct Loan, your leave of absence is considered an approved leave of absence if:
- The duration of the leave of absence, together with other leaves of absences, does not exceed 180 days in any 12-month period starting from the first day of your initial Leave of Absence; and
- there is a reasonable expectation that you will return from the leave of absence.
Leave of absence for Bachelor and Master by Coursework students is at least one half-year study period in duration. This exceeds 180 days and is therefore classified as an unapproved leave.
If you plan to take a leave of absence from your course please follow the instructions here.
If your application for leave is granted by the University but you are on unapproved leave for Financial Aid purposes, the University must perform an Return of Title IV funds calculation and update your enrolment status with the US Department of Education to ‘Withdrawn’.
Contact International Financial Aid Team
Students must contact the International Financial Aid Team via email after submitting a course withdrawal or leave of absence form. Students are required to complete Exit Counselling within seven days of the withdrawal date and should prepare to commence loan repayment.
Date of withdrawal
The date of withdrawal is used to determine the earned and unearned Direct Loan funds.
Course Withdrawal
If you withdraw from your course, the date of withdrawal is the date you withdraw from your course via the University’s Student System.
Leave of Absence
If you take an unapproved leave of absence, the date of withdrawal is the final day of the semester in which you were last enrolled.
The University is not an attendance taking institution. If you do not submit a course withdrawal or leave of absence form, the University will decide on the withdrawal date based on the midpoint of the payment period. If notice was not provided due to circumstances beyond your control, the withdrawal date will be the date on which that circumstance occurred.
Payment Period
Depending on your course requirements, you may be required to study a subject(s) that commences before the standard semester begins, for example: a practical subject in Summer term, see Study Period.
For the purposes of US Direct Loan, your payment period:
- Starts on the commencement of your first class
- Ends on the last day of the assessment period
Calculation of earned Direct Loan amounts
The University will calculate earned Direct Loan amounts as follows:
- Number of days in the relevant payment period:
- Number of attended days in the relevant payment period:
- Percentage of attendance:
- The number of days in the payment period is 140 (1 February to 30 June equals 150 days minus 10 consecutive days break).
- Bob attended 100 days (1 February to 11 May), which is 71.43% attendance rate (100 days divided by 140 days) which is more than 60%.
Based on the number of days from the commencement of your first class until the final day of the assessment period less any breaks of 5 calendar days or more.
Based on the number of days from your first day of the loan period until the date of withdrawal less any breaks of 5 calendar days or more.
Based on number of days you attended classes (2) divided by number of days in the relevant pay period (1).
If you attended more than 60% of the relevant payment period, the full Direct Loan amount for the relevant pay period is earned.
Example
Bob received a $10,000 Direct Loan disbursement for Direct Unsubsidised Loan ($4,000) and a Graduate Direct Plus Loan ($6,000). The University transferred $4,000 into his student fee account and $6,000 to his nominated bank account.
His payment period commenced on 1 February (which is his first day of study) and ends on 30 June. He withdraws from his course on 11 May via the Student System. The University calculates the amount of earned Direct Loan funds as follows:
Bob has earned the full Direct Loan disbursement and does not need to return any funds.
Return of unearned Direct Loans
If the percentage of your attendance is 60% or less:
- You must return the unearned amount from living cost to the US Department of Education
- The University must return the unearned amount from tuition fees to US Department of Education
If you attended 60% or less but withdraw after the census date you are liable to pay the unearned portion of the tuition fees that the University must return to the US Department of Education.
The University will return the unearned portion of tuition fees to the US Department of Education in the following order:
1. Direct Unsubsidised Loan
2. Direct Subsidised Loan
3. Parent or Graduate Direct PLUS Loan
Unearned Direct Loan amounts must be returned as soon as possible but no later than 45 days of the date of your withdrawal.
Example
Bob received a $10,000 Direct Loan disbursement for Direct Unsubsidised Loan ($4,000) and a Graduate Direct Plus Loan ($6,000). The University transferred $4,000 into his student fee account and $6,000 to his nominated bank account.
His payment period commenced on 1 February (which is his first day of study) and ends on 30 June. He withdraws from his course on 11 April via the Student System.
The University calculates the amount of earned Direct Loan funds as follows:
- The number of days in the payment period is 140 (1 February to 30 June equals 150 days minus 10 consecutive days break).
- Bob attended 70 days (1 February to 11 April), which is 50% attendance rate (70 days divided by 140 days) which is less than 60%
- The unearned loan amount is 50% of $10,000 which equals $5,000.
The University is required to return $4,000 (the amount transferred in Bob’s student fee account) and Bob is required to return $1,000 to the US Department of Education. The unearned funds will be returned first to the Direct Unsubsidised Loan, then to the Graduate Direct Plus loan.
Bob will owe the University the outstanding tuition fees.
Both the University and Bob must return their portion within 45 days after the 11 April (withdrawal day).
Notification of return of funds requirements
The University will notify you of any return of any unearned Direct Loan funds via your University email account. This notice will include information about the amount of unearned Direct Loan funds and whether the University will return funds on your behalf.
The University’s Refund Policy is independent of the regulations covering the return of Title IV funds. On withdrawal, eligibility for refunds or liability for tuition and other payments to The University of Melbourne is determined by the University’s refund policy relevant to the student’s fee liability category.
Credit balance refund
Credit balance refund for withdrawn students will be put on hold until R2T4 is calculated.
Post-withdrawal disbursement process
Where a student has withdrawn from their course of study and is still entitled to earned Direct Loan funds, they may be eligible to receive a post-withdrawal disbursement.
The University will contact the student within 30 calendar days of the date of withdrawal (determination date) to notify them of the post-withdrawal disbursement option, including the amount of the loan funds, the obligation to repay any borrowed amounts, and instructions on how to agree to a post-withdrawal disbursement.
The student must confirm within 14 calendar days of receipt of the notice to agree to a post-withdrawal disbursement. If the student agrees to the post-withdrawal disburse, the University will disburse the funds within 180 days of the student’s date of withdrawal.