The withdrawal refund policy for student financial aid funds will comply with regulations for the Return of Funds of Title IV aid (Requirements of 34 CFR 668.22). The Department of Education mandates that unearned federal financial aid funds are returned to the specific program if a student officially or unofficially withdraws from all coursework in a semester.
The refund amount is determined by the days of the semester the student was in attendance versus the remaining days (after withdrawal) until the semester ends. A student who completes at least 60% of the semester is not required to have Title IV funds returned. The Financial Aid Office encourages the student to meet with their office so the calculation can be provided prior to withdrawal.
Funds returned to the Federal Government reduce the outstanding balances in individual federal programs. Any unearned Title IV aid must be returned to the Federal Government within 45 days of the withdrawal determination date.
Financial aid returned by LCN, the student, and/or a parent or the College must be allocated in the following order*:
- Federal Unsubsidized Direct Loan
- Federal Subsidized Direct Loan
- Federal Direct Parent Loan (PLUS)
- Federal Pell Grant
*Federal programs the College does not participate in are not included in the distribution.
If the student receives (or LCN or parent receives on the student’s behalf) excess Title IV program funds that must be returned, LCN must return a portion of the excess equal to the lesser of:
1. The institutional charges multiplied by the unearned percentage of funds or
2. The entire amount of excess funds.
If the RT24 calculation results in an amount to be returned that exceeds the school's portion, then the student (or parent in the case of funds due to a parent PLUS loan) must repay, as appropriate, the amount determined.
Any amount of unearned grant funds that a student must return is called an overpayment. The maximum amount of a grant overpayment must be repaid is half of the grant funds that were received or scheduled to receive. A student does not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. The student must establish arrangements with LCN or the Department of Education to return the unearned grant funds.
The Financial Aid Office notifies students of their debt to the Department of Education via postal mail.
Late Disbursement
If the student is otherwise eligible, the first disbursement of Federal Direct Subsidized Loan or Federal Direct Unsubsidized Loan proceeds is allowed up to 180 days after the student has ceased to be enrolled. Subsequent disbursements are not allowed.
Post-Withdrawal Disbursement
Based on the student’s confirmed last date of attendance, if more aid was earned by the student than disbursed, LCN may owe the student a post-withdrawal disbursement. If the calculation determines that a post-withdrawal disbursement is due, LCN will process a post-withdrawal disbursement of federal grant funds within 45 days.
If the post-withdrawal disbursement includes federal loan funds, LCN will offer these funds to the student within 30 days and receive the student’s permission before the funds can be disbursed. LCN will give the student at least 14 days to choose to decline some or all of the loan funds. The student must accept or deny the federal loan funding via email so the LCN FA office knows how to proceed. Nonresponse from the student after 14 days is considered a denial of loan funds.
All post-withdrawal disbursements will be applied to the student’s account to pay tuition and fees. After all post-withdrawal aid is disbursed, if this results in a credit balance, LCN will issue a refund of the new credit balance as soon as possible and no later than 14 days after the calculation of R2T4.