The Higher Education Amendments of 1998, Public Law 105-244 (the Amendments of 1998) substantially change the way funds paid toward a student's education are handled when a recipient of Title IV funds, including Federal Stafford Loans, Federal Grad Plus Loans and Federal Perkins Loans, withdraws from school. These regulations are effective 10/7/2000.

Please read the following information carefully. If you have any questions, please contact Financial Aid Administrator directly.

The old provisions required schools to use specific refund policies when a Title IV (federal financial aid) recipient withdrew. The school determined the amount of institutional charges (tuition) it earned, the unearned amount, and the tuition amount that had to be refunded. In addition, the old provisions specified an order of return to all sources of aid.

The new requirements do not dictate an institutional refund policy. Instead a statutory schedule is used to determine the amount of Title IV funds, in this case, Federal Stafford Loans Subsidized and Unsubsidized, Federal Grad Plus Loans, and Federal Perkins Loans, that a student has earned as of the date the student ceases to be in attendance. The amount earned is based on the amount of time the student spent in academic attendance. Federal Work-Study is not included in this calculation. It has no relationship to the student's institutional charges.

This change in the law makes clear that Title IV funds, including Federal Stafford Loans, Federal Grad Plus Loans, and Federal Perkins Loans, are awarded to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV Federal Stafford Loan funds which the student was originally scheduled to receive.

The student's obligation to pay tuition to the school is, however, established by school policy as stated in the Catalog, the Student Handbook and each year's payment signed quarterly enrollment agreement.

Up through the 60% point in each payment period, a pro-rate schedule is used to determine the amount of Title IV aid, the student has earned at the time of withdrawal. After the 60% point, the student has earned 100% of the federal Title IV funds.

If a recipient of funds withdraws from school after beginning attendance, the amount of Federal Stafford Loan and Federal Grad Plus Loans funds earned by the student must be determined. If the amount disbursed to the student is greater than the amount the student "earned", "unearned" funds have to be returned. If the amount disbursed to the student is less than the amount the student earned, the student is eligible to receive a post-withdrawal disbursement of the "unearned" aid that was not received. 

In the case of Federal Stafford Loans or Federal Grad Plus Loans, this means, if a loan was certified and the student enrolled, but disbursement had not yet been made at the time of withdrawal, the student may still be eligible for a disbursement.

What does this mean for you?

If you withdraw from ACTCM, the Financial Aid Office will calculate the amount of Federal Stafford, Federal Grad Plus Loans, and Federal Perkins Loan funds that you have "earned" on the basis of your enrollment until withdrawal. The "unearned" amount that has been used to pay tuition will be refunded to your lender by ACTCM to reduce your outstanding loan balance. ACTCM will then, as usual, notify your lender that you are no longer enrolled as of the date of withdrawal.

Subsequently you are required to pay any "unearned" amount you have received for indirect expenses, such as living expenses, books and materials, travel, etc, according to the terms of your loan agreement, that is, according the usual terms of repayment and the normal repayment schedule. No unusual or one time refund of funds to the lender is required from the student recipient of Federal Stafford, Federal Grad Plus Loans or Perkins Loans as a result of withdrawal. You, as the borrower, simply enter repayment as usual at the end of the six or nine-month grace period.

The ACTCM tuition refund policy, as published in the Catalog and the Quarterly Enrollment Agreement remains unchanged. However, because the calculation of the tuition refund and the calculation of the amount of "earned" and "unearned" Federal Stafford Loan funds are no longer tied together by federal law as in the past, there may be a tuition balance owing as a result of withdrawal. Before you withdraw, please be sure you understand the potential financial consequences of withdrawal.

Questions

Please contact Financial Aid Administrator at ACTCM in advance of withdrawal whether permanent or temporary, or prior to any Leave of Absence, to review the potential financial consequences