Contact the Office of Financial Aid BEFORE you withdraw from classes!
What is an Overpayment?
Overpayments occur when students receive more financial aid they should have received by regulation. Students are required to pay back the extra funds they received. For this reason, students can also think of overpayments as repayments, i.e., they must repay the school. Overpayments are the only occasions where students would need to pay back a grant.
Because overpayments can cause significant financial hardship for unprepared students, it is important to read this page in its entirety so you understand your responsibilities and obligations under the law.
Overpayments have a variety of causes. The most common ones include instances where the student:
- Was paid at full-time status (12 or more units) for their first disbursement in a term, but they dropped to less than half-time status (0.5 to 5.5 units) before their second disbursement or the freeze date
- This is the most common situation, but it applies to any amount of decrease in enrollment intensity. If you drop from 10 units to 6 units, you would trigger an overpayment. If you drop from 6 units to 3 units, you would trigger and overpayment. And so on.
- The student was paid Pell Grant but withdrew before completing 60% of their coursework for the term. (If the classes were short term, such as shorter summer courses, they must complete 49% of the modules within the term.) Withdrawals include
- Unofficial withdrawals (leaving school without notice)
- Excused withdrawals (obtaining a signed Excused Withdrawal Petition before leaving school)
- Dropping all your classes (which is classified as an unofficial withdrawal)
- Receiving all Fs and/or Ws
- Made an error on their financial aid application (FAFSA or CADAA) and, once the error was fixed, their financial aid eligibility decreased
- Was paid at more than one school or institution for the same term
- The student was paid Pell Grant based on enrollment but all of their grades were NS (“no show”)
Enrollment Intensity
Drops in enrollment intensity are one of the most common reasons for an overpayment, so it is important to understand how they work.
In fall and spring, Pell Grant is disbursed in two equal disbursements—one at the beginning of the term and the other about a month later. Just prior to the second disbursement, Solano takes a snapshot of the student’s enrollment to determine their final enrollment intensity determination for eligibility purposes. That date is known as the Pell Recalculation Date or, more commonly, the “freeze date” because students' hours are permanently “frozen” at that level.
Pell recipients can find the scheduled disbursement dates in their FalconNest portal. The second disbursement date in the primary term will be the freeze date.
Return to Title IV (R2T4) Repayment Policy
In some cases, federal regulations require the Financial Aid Office to calculate the “earned amount” of a student’s award and ensure that the “unearned amount” is returned to the agency that oversees federal student aid programs. This process is known as Return to Title IV Repayment or R2T4.
The following awards are subject to R2T4 regulations:
- Federal Pell Grant
- Iraq and Afghanistan Service Grant (IASG)
- Federal Supplemental Educational Opportunity Grant (FSEOG)
- Federal Direct Subsidized Loans
- Federal Direct Unsubsidized Loans
Note that Federal Work Study (FWS) funds are not included in this list. Likewise, R2T4 calculations are not performed on state, local, and institutional awards (although each program may have its own rules requiring the return of funds).
What triggers an R2T4 calculation?
There are two general situations in which a calculation must be performed:
- The student notifies the school of their intent to withdraw from all classes or begins the official withdrawal process. This is known as an “official withdrawal.” The withdrawal date used will be the date that the student notified the school of their intention to withdraw or began the official withdrawal process.
- After the payment period is over, the school finds that a student finished the payment period with a collection of “F” and “W” grades. This is known as an “unofficial withdrawal.” As Solano Community College is not required to take attendance, we will use the midpoint (50% mark) of the payment period for the withdrawal date.
An R2T4 calculation is not required when:
- The student never actually began attendance for the payment period. In this case, all disbursed Title IV funds must be returned to the Title IV programs.
- The student had begun attendance but was not eligible to receive Title IV funds due to an eligibility reason, such as unsatisfactory academic progress, appeal denials, incomplete verification materials, ineligible program of study, etc. In this case, no Title IV funds should have been disbursed, but if any were disbursed, the entire amount must be returned.
How is the R2T4 calculated?
Students are considered to have earned aid in proportion to the amount of time in the payment period that they remained enrolled in classes. The longer that the student remained in their classes (i.e., the later the withdrawal date), the more of their aid will be considered “earned.” Once the student has been enrolled for 60% of the payment period, they are considered to have earned 100% of their federal financial aid award for the period.
Note that different R2T4 rules apply to students who are only taking courses that are shorter than the length of the term (e.g. an 8 week course in fall or a 4-week course in summer). Full descriptions of the calculations and their components are available online in Volume 5 of the FSA Handbook for the award year in question.
The calculation ultimately determines the amount of the student return (the amount for which the student is responsible, if any), the institutional return (the amount for which the institution is responsible, if any), and/or a post-withdrawal disbursement (if applicable).
Student returns
This is the amount the student must return to the government. A notice will be sent when we have performed the R2T4 calculation. A student must repay the full amount to Cashier's Office within 45 days of their date of withdrawal. If unpaid, the outstanding amount will be referred as an overpayment to the US Department of Education for debt collection.
Students in an overpayment status for federal funds will not be able to receive any additional financial aid disbursements at any college or university until repayment has been made in full.
Institutional returns
Solano will return this amount to the government and will charge the debt on your FalconNest Student account for repayment.
- You may be eligible to continue receiving financial aid if you owe this portion
- Owing this debt to the college will prevent you from adding or dropping classes in future terms, accessing transcripts, and viewing your grades
Order of returns
If the calculation finds that a student has been disbursed “unearned aid,” then student and institutional returns must be made (up to the total net amount of the award) in the following order:
- Unsubsidized Direct Federal Stafford Loan
- Subsidized Direct Federal Stafford Loan
- Federal Pell Grants
- Federal Supplemental Educational Opportunity Grant (FSEOG)
Post-Withdrawal Disbursements
If the R2T4 calculation shows that a student received less Federal Student Aid than the “earned amount,” SCC will offer them a Post-Withdrawal Disbursement (PWD) of the earned aid that was not received. The student must respond quickly—within 14 days—if they hope to receive a PWD of grant funds (like Pell or FSEOG).
If a student attended classes but was not eligible for any Title IV aid prior to withdrawing, these regulations do not apply.
Timeframes
- Within 30 days of the determination that a student has withdrawn, an R2T4 calculation must be performed
- Within 45 days of the date of determination, any unearned funds must be returned to Title IV
- If the student is eligible for a post-withdrawal disbursement, that offer must be made within 30 days of the determination (and the student has at least 14 days to provide their consent to that disbursement)
- PWDs of grants must be made within 45 days of the determination that the student has withdrawn and PWDs of loan funds must be made within 180 days of that determination
Overpayment Reporting
We are required to send information about overpayments to the National Student Loan Data System (NSLDS) within 45 days. Once the overpayment has been reported, the student will not be eligible to receive financial aid at any postsecondary institution until the amount has been repaid.
Initially, an overpayment will show as a debt on the student account at Solano. Students can pay back the balance to Solano through the Cashier Office and we will return that money to the government on their behalf.
Federal overpayments not paid before the earlier of 60 days after the student’s last date of attendance or the end of the aid year (June 30) will be referred to the Collection Agency for the U.S. Department of Education. At that point, the student may make repayment arrangements directly with the U.S. Department of Education to regain financial aid eligibility by calling 1-800-621-3115 or by going to MyEdDebt and selecting Contact Us.
State overpayments (e.g. Cal grants) must be paid to Solano Community College who will return the funds to the appropriate state agency.