RETURN OF TITLE IV, HEA POLICY
When you apply for financial aid, you sign a statement that you will use the funds for educational purposes only. Therefore, if you withdraw before completing your program, a portion of the funds you received may have to be returned. American Beauty Schools will calculate the amount of tuition to be returned to the Title IV, HEA Federal fund programs according to the policies listed below.
RETURN TO TITLE IV FUNDS POLICY
This policy applies to students’ who withdraw official, unofficially or fail to return from a leave of absence or dismissed from enrollment at American Beauty Schools. It is separate and distinct from the American Beauty Schools refund policy. (Refer to institutional refund policy)
The calculated amount of the Return of Title IV, HEA (R2T4) funds that are required for the students affected by this policy, are determined according to the following definitions and procedures as prescribed by regulations.
The amount of Title IV, HEA aid earned is based on the amount of time a student spent in academic attendance, and the total aid received; it has no relationship to student’s incurred institutional charges. Because these requirements deal only with Title IV, HEA funds, the order of return of unearned funds do not include funds from sources other than the Title IV, HEA programs.
Title IV, HEA funds are awarded to the student under the assumption that he/she will attend school for the entire period for which the aid is awarded. When student withdraws, he/she may no longer be eligible for the full amount of Title IV, HEA funds that were originally scheduled to be received. Therefore, the amount of Federal funds earned must be determined. If the amount disbursed is greater than the amount earned, unearned funds must be returned.
The institution has 45 days from the date that the institution determines that the student withdrew to return all unearned funds for which it is responsible. The school is required to notify the student if they owe a repayment via written notice.
The school must advise the student or parent that they have 14 calendar days from the date that the school sent the notification to accept a post withdraw disbursement. If a response is not received from the student or parent within the allowed time frame or the student declines the funds, the school will return any earned funds that the school is holding to the Title IV, HEA programs.
“Official” Withdrawal from the School
A student is considered to be “Officially” withdrawn on the date the student notifies the Financial Aid Director or School Director in writing of their intent to withdraw. The date of the termination for return and refund purposes will be the earliest of the following for official withdrawal:
Upon receipt of the official withdrawal information, American Beauty Schools will complete the following:
calculation of Return of Title IV, HEA funds the student has earned, and if any,
the amount of Title IV funds for which the school is responsible. Returns made
to the Federal Funds Account are calculated using the Department’s Return of
Title IV, HEA Funds Worksheets, scheduled attendance and are based upon the
based upon the length of time the student was enrolled in the program
based on scheduled attendance and the amount of funds the student received.
student’s behalf as a result of exiting the program. If a student’s scheduled
attendance is more than 60% of the payment period, he/she is considered to
have earned 100% of the Federal funds received for the payment period. In
this case, no funds need to be returned to the Federal funds.
fees that the student must return, if applicable.
school and the available methods of payment. A copy of the completed worksheet,
check, letter and final ledger card will be kept in the student’s file.
In the event a student decides to rescind his or her official notification to withdraw, the student must provide a signed and dated written statement that he/she is continuing his or her program of study, and intends to complete the payment period. Title IV, HEA assistance will continue as originally planned. If the student subsequently fails to attend or ceases attendance without completing the payment period, the student’s withdrawal date is the original date of notification of intent to withdraw.
Unofficial Withdrawal from School
In the event that the school unofficially withdraws a student from school, the School Director and/or Admissions Director must complete the Withdrawal Form using the last date of attendance as the drop date.
Any student that does not provide official notification of his or her intent to withdraw and is absent for more than 10 consecutive school days (14 calendar days), will be subject to termination and considered to have unofficially withdrawn.
Within one week of the student’s last date of academic attendance, the following procedures will take place:
of academic attendance on the attendance record;
school days (14 calendar days) of absence;
status resulting in the current termination of enrollment;
student has earned, and, if any, the amount of Federal funds for which the school is
Federal fund programs any unearned portion of Title IV funds for which the school
is responsible within 45 days of the date the withdrawal determination was made and
note return on the student’s ledger card.
refund letter explaining Title IV requirements:
time the student was enrolled and scheduled to attend in the program and the
amount of aid the student received.
and fees that he/she must return, if applicable.
due the school and the available methods of payment.
in the student’s file.
Disbursement Restrictions – 30 Day, First time, First Year Undergraduate Students
There are some Title IV, HEA funds that you were scheduled to receive that cannot be disbursed to you once you withdraw because of other eligibility requirements.
For example, if you are a first-time, first-year undergraduate student and you have not completed the first 30 days of your program before you withdraw, you will not receive any Direct Loan funds that you would have received had you remained enrolled past the 30th day.
Title IV, HEA aid is earned in a prorated manner on a per diem basis (clock hours) up to the 60% point in the payment period. Title IV,HEA aid is viewed as 100% earned after that point in time. A copy of the worksheet used for this calculation can be requested from the financial aid director.
Withdraw Before 60%
The institution must perform a R2T4 to determine the amount of earned aid through the 60% point in each payment period or period of enrollment. The institution will use the Department of Educations prorate schedule to determine the amount of the R2T4 funds the student has earned at the time of withdraw.
Withdraw After 60%
After the 60% point in the payment period or period of enrollment, a student has earned 100% of the Title IV, HEA funds he or she was scheduled to receive during this period. The institution must still perform a R2T4 to determine the amount of aid that the student has earned.
American Beauty Schools measures progress in Clock Hours, and uses the payment period for the period of calculation.
The Calculation Formula:
Determine the amount of Title IV, HEA aid that was disbursed plus Title IV, HEA aid that could have been disbursed.
Calculate the percentage of Title IV, HEA aid earned:
HOURS SCHEDULED TO COMPLETE
TOTAL HOURS IN PERIOD = % EARNED
Percentage earned from (multiplied by) Total aid disbursed, or could have been disbursed = AMOUNT STUDENT EARNED.
Subtract the Title IV aid earned from the total disbursed = AMOUNT TO BE RETURNED.
100% minus percent earned = UNEARNED PERCENT
Unearned percent (multiplied by) total institutional charges for the period = AMOUNT DUE FROM THE SCHOOL.
If the percent of Title IV aid disbursed is greater than the percent unearned (multiplied by) institutional charges for the period, the amount disbursed will be used in place of the percent unearned.
If the percent unearned (multiplied by) institutional charges for the period are less than the amount due from the school, the student must return or repay one-half of the remaining unearned Federal Pell Grant.
Student is not required to return the overpayment if this amount is equal to or less than 50% of the total grant assistance that was disbursed /or could have been disbursed. The student is also not required to return an overpayment if the amount is $50 or less.
American Beauty Schools will issue a grant overpayment notice to student within 30 days from the date the school’s determination that student withdrew, giving student 45 days to either:
Order of Return
American Beauty Schools is authorized to return any excess funds after applying them to current outstanding Cost of Attendance (COA) charges. A copy of the Institutional R2T4 work sheet performed on your behalf is available through the office upon student request.
In accordance with Federal regulations, when Title IV, HEA financial aid is involved, the calculated amount of the R2T4 Funds” is allocated in the following order:
Timeframe for Returning of Title IV, HEA funds:
A school must return the amount of Title IV funds for which it is responsible as soon as possible
but no later than 45 days after it determines or should have determined that the student withdrew.
If you did not receive all of the funds that you earned, you may be due a post-withdrawal disbursement. If your post-withdrawal disbursement includes loan funds, your school must get your permission before it can disburse them. You may choose to decline some or all of the loan funds so that you don’t incur additional debt. Your school may automatically use all or a portion of your post-withdrawal disbursement of grant funds for tuition, fees, and room and board charges (as contracted with the school).
The school needs your permission to use the post-withdrawal grant disbursement for all other school charges. If you do not give your permission (some schools ask for this when you enroll), you will be offered the funds. However, it may be in your best interest to allow the school to keep the funds to reduce your debt at the school.
Timeframe for post- withdrawal disbursement of Title IV, HEA funds
Time frame for returning an unclaimed Title IV, HEA credit balance
If a school attempts to disburse the credit balance by check and the check is not cashed, the school must return the funds no later than 240 days after the date the school issued the check.
If a check is returned to a school or an EFT is rejected, the school may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the funds were returned or rejected. When a check is returned or EFT is rejected and the school does not make another attempt to disburse the funds, the funds must be returned before the end of the initial 45-day period.
The school must cease all attempts to disburse the funds and return them no later than 240 days after the date it issued the first check.
Institution Responsibilities in regards to return of Title IV, HEA funds
American Beauty Schools’ responsibilities in regards to Title IV, HEA funds follow:
The institution is not always required to return all of the excess funds; there are situations once the R2T4 calculations have been completed in which the student must return the unearned aid.
Overpayment of Title IV, HEA Funds
Any amount of unearned grant funds that you must return is called overpayment. The amount of grant overpayment that you must repay is half of the grant funds you received or were scheduled to receive. You must make arrangement with American Beauty Schools or Department of Education to return the amount of unearned grant funds.
Student Responsibilities in regards to return of Title IV, HEA funds
Refund vs. Return to Title IV, HEA Funds
The requirements for the Title IV, HEA program funds when you withdraw are separate from any refund policy that American Beauty Schools may have to return to you due to a cash credit balance. Therefore, you may still owe funds to the school to cover unpaid institutional charges. American Beauty Schools may also charge you for any Title IV, HEA program funds that they were required to return on your behalf.
If you do not already know what American Beauty Schools refund policy is, you may ask your Schools Director for a copy.
Return to Title IV, HEA questions?
If you have questions regarding Title IV, HEA program funds after visiting with your financial aid director, you may call the Federal Student Aid Information Center at 1-800-4-fedaid (800-433-3243). TTY users may call 800-730-8913. Information is also available on student aid on the web www.studentaid.ed.gov.
*This policy is subject to change at any time, and without prior notice.