20 U.S. Code § 1091b - Institutional refunds
If a recipient of assistance under this subchapter withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the amount of grant or loan assistance (other than assistance received under part C) to be returned to the subchapter IV programs is calculated according to paragraph (3) and returned in accordance with subsection (b).
If a student does not return to the institution at the expiration of an approved leave of absence that meets the requirements of subparagraph (A), the institution shall calculate the amount of grant and loan assistance provided under this subchapter that is to be returned in accordance with this section based on the day the student withdrew (as determined under subsection (c)).
After determining the eligibility of the student for a late disbursement or post-withdrawal disbursement (as required in regulations prescribed by the Secretary), the institution of higher education shall contact the borrower and obtain confirmation that the loan funds are still required by the borrower. In making such contact, the institution shall explain to the borrower the borrower’s obligation to repay the funds following any such disbursement. The institution shall document in the borrower’s file the result of such contact and the final determination made concerning such disbursement.
If the student has received more grant or loan assistance than the amount earned as calculated under paragraph (3)(A), the unearned funds shall be returned by the institution or the student, or both, as may be required under paragraphs (1) and (2) of subsection (b), to the programs under this subchapter in the order specified in subsection (b)(3).
The student shall return assistance that has not been earned by the student as described in subsection (a)(3)(C)(ii) in the order specified in paragraph (3) minus the amount the institution is required to return under paragraph (1).
Notwithstanding paragraph (1), if the institution determines that a student did not begin the withdrawal process, or otherwise notify the institution of the intent to withdraw, due to illness, accident, grievous personal loss, or other such circumstances beyond the student’s control, the institution may determine the appropriate withdrawal date.
The provisions of this section shall take effect 2 years after October 7, 1998. An institution of higher education may choose to implement such provisions prior to that date.
A prior section 1091b, Pub. L. 89–329, title V, § 503, as added Pub. L. 90–35, § 2(c), June 29, 1967, 81 Stat. 83; amended Pub. L. 92–318, title IV, § 451(a), June 23, 1972, 86 Stat. 344, authorized the Commissioner to appraise and annually report on existing and future education personnel needs, prior to repeal, effective Sept. 30, 1976, by Pub. L. 94–482, title I, § 151(a)(2), (b), Oct. 12, 1976, 90 Stat. 2151.
2006—Subsec. (a)(2)(A). Pub. L. 109–171, § 8022(1), substituted “1 or more leaves of” for “a leave of” in introductory provisions.
Subsec. (a)(3)(B)(ii). Pub. L. 109–171, § 8022(2), inserted “(as determined in accordance with subsection (d))” after “student has completed”.
Subsec. (a)(3)(C)(i). Pub. L. 109–171, § 8022(3), substituted “grant assistance under subparts 1 and 3 of part A, or loan assistance under parts B, D, and E,” for “grant or loan assistance under this subchapter”.
Subsec. (a)(4)(A). Pub. L. 109–171, § 8022(4), amended heading and text of subpar. (A) generally. Prior to amendment, text read as follows: “If the student has received less grant or loan assistance than the amount earned as calculated under subparagraph (A) of paragraph (3), the institution of higher education shall comply with the procedures for late disbursement specified by the Secretary in regulations.”
Subsec. (b)(1). Pub. L. 109–171, § 8022(5), inserted “not later than 45 days from the determination of withdrawal” after “return” in introductory provisions.
Subsec. (b)(2)(C). Pub. L. 109–171, § 8022(6), amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows: “Notwithstanding subparagraphs (A) and (B), a student shall not be required to return 50 percent of the grant assistance received by the student under this subchapter, for a payment period or period of enrollment, that is the responsibility of the student to repay under this section.”
Subsec. (d). Pub. L. 109–171, § 8022(7), (8), in introductory provisions, substituted “(a)(3)(B)” for “(a)(3)(B)(i)” and, in par. (2), substituted “clock hours scheduled to be completed by the student in that period as of the day the student withdrew.” for “clock hours—
“(A) completed by the student in that period as of the day the student withdrew; or
“(B) scheduled to be completed as of the day the student withdrew, if the clock hours completed in the period are not less than a percentage, to be determined by the Secretary in regulations, of the hours that were scheduled to be completed by the student in the period.”
2005—Subsec. (b)(2)(D). Pub. L. 109–66 added subpar. (D).
Subsec. (b)(2)(E). Pub. L. 109–67 added subpar. (E).
1998—Pub. L. 105–244 amended section catchline and text generally. Prior to amendment, section consisted of subsecs. (a) to (c) requiring each institution of higher education participating in a program under this subchapter to have in effect a fair and equitable refund policy for refunding unearned tuition, fees, room and board, and other charges to students or parents who received grant or loan assistance under this subchapter.
1993—Subsec. (a). Pub. L. 103–208, § 2(h)(26), substituted “grant or loan assistance” for “grant, loan, or work assistance” in introductory provisions.
Subsec. (b)(3). Pub. L. 103–208, § 2(h)(27), substituted “subsection (c) of this section” for “subsection (d) of this section”.
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