Filed under General University Policies, Title IV Specific Policies, Tuition & Finance Policies

The Federal Student Aid Process

Financial Aid Office


1.    Federal Student Aid Eligibility

To be eligible for Federal Student Aid, students must:

  • Complete the Free Application for Federal Student Aid (FAFSA).
  • Be a regular student, enrolled in a Title IV eligible, degree or certificate program of study.
  • Not be currently enrolled in a secondary school.
  • Provide proof of a high school diploma or the recognized equivalent (such as a GED). Validating documents can be an official high school transcript or diploma, verification of state GED, or DD214 indicating high school completion or receipt of GED.
  • Be a U.S. citizen or national, or an eligible non-citizen (verification of eligible non-citizen status may be required).
  • Have a valid Social Security Number.
  • Not be in default on a Federal Student loan or owe an over-payment on a Federal Student Aid Grant or Loan and may not have borrowed in excess of the annual or aggregate loan limits for the Federal Student Loan Program.  Check if uncertain.
  • If the student is male, he must be registered with Selective Service as required. Visit if uncertain.
  • Maintain satisfactory academic progress (SAP) once approved for funding (See SAP Policy).
  • Certify that federal student aid will only be used for educational purposes
  • Demonstrate financial need

2.    Applying for Federal Student Aid

In order to determine a student’s eligibility for Title IV funding, the student must complete the Free Application for Federal Student Aid (FAFSA). The Financial Aid Office strongly recommends completing the FAFSA at least two (2) weeks prior to the first day of classes. Continuing students should complete the new FAFSA annually, by May 1, prior to the new award year starting July 1.

Near the end of the FAFSA application, students will be asked to enter the school code, of the particular school(s) for which the student would like the FAFSA results to be sent. ABTU’s school code is: 041187

Click the following link to complete the FAFSA

Note: In the interest of producing college graduates without the burden of federal student loan debt, ABTU encourages eligible students to participate in our Zero Debt Initiative, allowing students to use Federal Pell Grants alone to cover the cost of education.


3.    Criteria for determining and packaging a student’s award

Upon completion of the FAFSA, the Department of Education will send the student a “Student Aid Report”, to the email address entered on the FAFSA.  Once the student’s eligibility for Title IV funds (Pell Grants, and Direct Loans) has been determined, the amount of the Pell Grants and Direct Loans which will be sent to the school for tuition and fees, and Loans refunded to the student (if applicable) can then be calculated. Students must be enrolled as a full time student in order to receive 100% of the Pell Grant and Direct Loans for which they are eligible. Students enrolled as a one-half time student will only be eligible to utilize one-half of their total Pell Grants and Direct Loans available. Students must also continue to maintain Satisfactory Academic Progress (SAP) in order to be eligible for Federal Student Aid disbursements.

American Business & Technology University packages all financial aid for students based on the guidelines in the Federal Student Aid Handbook.

Federal Student Aid Handbook:



4.    Pell Grant and Direct Loan Award Formula

In order to be considered a full-time student, the student must be enrolled in a minimum of 12 semester credit hours (four courses) per semester (term/payment period). There are three semesters (terms/payment periods) in an academic year. Pell Grant and Direct Loan payments will be paid in installments over the course of the academic year.  The payment period schedule determines when and the amounts of Pell Grant and Direct Loans that will be disbursed.

An initial calculation of the student’s eligibility for the Pell Grant is made after the school receives the student’s ISIR (Institutional Student Information Record) and an official EFC.  An official EFC is used to calculate the student’s Pell Grant amount based on the Pell Grant schedule that is distributed by the Department of Education before the beginning of each academic year.   The funds for each payment period will not be disbursed until the student has completed half of the weeks of instructional time of the academic year they are enrolled in.  

If a student transfers from another school to ABTU, ABTU will first determine the percentage of eligibility remaining to the student before any Pell Grant payments will be made.  ABTU can only pay that portion of the Pell Grant that the student is eligible for as long as the student is in attendance at ABTU.  The grant must be adjusted to ensure the student is not over-awarded for the award year.

5.    Payment Period Definition

ABTU has two payment periods or academic terms per Academic Year (32 weeks). Each payment period or semester is 16 weeks in length followed by a break.  ABTU offers 3 payment periods or semesters per Calendar Year (See Academic Calendar).  All of ABTU’s courses award three semester credit hours.  All semester credit hour courses are 8 weeks long and are offered within 8-week modules starting at the beginning and mid-point of the payment periods (semesters); there are 6 scheduled 8-week modules per year.  Full-time students are expected to enroll in 3 or 4 eight-week courses per payment period (semester), totaling 9 to 12 courses per year. A student can enroll in any of the six course starts per calendar year (students enrolling at the mid-point of a semester must enroll in 2 courses to be at least half-time eligible for Federal Student Aid).


6.    Federal Student Aid Disbursement

ABTU will request funds once per payment period (semester), or three (3) times per year. The following schedule demonstrates when ABTU anticipates funds will be requested from the federal government. In order for ABTU to request funds a student must be meeting SAP, be current with course work, and be in good standing with all ABTU policies. Once the student is confirmed to be meeting these requirements, disbursements will be made to the student account immediately after receiving the funds from the Department of Education.  In the event the disbursement results in a credit balance on the student account, a disbursement will be made to the student within fourteen (14) days of receipt of the funds from the government.


ABTU monitors students’ attendance and grades on a course-by-course basis; this allows ABTU to determine at-risk students before the end of a payment period (point of SAP measurement). Determining students who are at risk early on will allow ABTU to deploy academic efforts to retain the students before they reach the end of the payment period.

Below is a detailed timeline of the back office process for drawing down funds, applying funds, and processing disbursements to students.

  1. Student is asked to complete the Free Application for Federal Student Aid (FAFSA) at
  2. When the FAFSA is received, a Financial Aid Officer confirms that the student is planning to attend.
  3. The Financial Aid Officer verifies the student’s last day of attendance, SAP status, and that the student has maintained eligibility.
  4. When funds are to be disbursed ABTU posts awarded funds (payments) to the student’s ledger card using the COD disbursement date. The payments are itemized with respect to Pell, Direct Loans and/or any other funds received. These are itemized into specific lines on the student’s ledger. This task is done within three (3) days of the COD disbursement date.
  5. Once funds are received, ABTU transfers the funds from the Pell and Direct Loans account to the respective disbursement accounts (Pell and Direct Loans) within three (3) days. The student’s ledger cards are then verified against the deposit for accuracy.
  6. The Financial Aid Officer and the Accounting Office review and reconcile the funds that were received.
  7. If a student withdraws and refunds are due, refunds are processed in the form of checks or EFT to eligible students. Checks are mailed via USPS.

Determining Student’s Credit Balance
The Accounting Office is provided a deposit summary for each eligible student. Each student’s ledger card is reviewed to verify all applicable charges for tuition, books, and fees due to the school. ABTU then verifies that the funds received are for the payment period in which it was requested.

Payments due to the school are then applied to the student’s ledger card. Pell Grant funds are applied first, followed by Direct Loans, then other funding sources when applicable. Once payments are applied to the specific payment period, ABTU determines credit balances if any. This credit balance is reported on the student’s ledger card.

When the amount of a credit balance is determined, the Accounting Office meets with the Financial Aid Department to identify any necessary refunds. Each funding submission details to which payment period the payment should apply, the total cost of the payment period, and determines to which courses the payments are to be applied.

The Financial Aid Officer verifies the student has remained eligible before a disbursement is made. This is done by confirming SAP and Last Day of Attendance (LDA) in the Student Information System. The Accounting Office then updates QuickBooks with the payment information.

ABTU mails checks and utilizes direct deposit to send credit balances to students. For all payments, the Accounting Office reconciles the accounts to verify that the payments have cleared.

Contact for Questions:
Brooke Muff, Financial Aid Officer
Phone: (816) 279-7000, ext. 1701
Toll Free: 1-800-908-9329, ext. 1701

7.    Return of Title IV Funds (R2T4)

Federal regulations specify how American Business & Technology University must determine the amount of Title IV program assistance that a student has earned if he or she officially withdraws, stops attending, or is dismissed. The Title IV programs that ABTU uses are governed by this law. These programs are Federal Pell Grants and Direct Loans. Aid that will be included in a return calculation includes Federal Pell Grant, based on re-calculation of student eligibility and direct Stafford loans, as long as the student begins attendance in at least half time enrollment (second course).

When a student withdraws, stops attending, or is dismissed, the amount of assistance that the student has earned is determined on a prorated basis. If a student does not begin attendance in all the courses he/she was scheduled to attend within a payment period, ABTU will re-calculate the student’s eligibility for Pell Grants. If the student has withdrawn, the re-calculation will be done prior to the Return of Title IV funds calculation. Once a student has successfully completed 60 percent or more of the payment period, he or she has earned all the scheduled assistance for that payment period. If the student withdraws and did not receive all of the assistance that was earned, a post withdrawal disbursement may be due.

If a new student has not progressed academically by the mid-point of his/her first course (end of the fourth week of a typical 8-week course), ABTU has the right to cancel the student’s enrollment. Any pre-paid tuition will be refunded in accordance with the school’s refund policy. Title IV students will have their Pell Grants and Direct Loans recalculated, a Return of Title IV funds calculation will be performed. A potential post withdrawal disbursement may be due to the student.

If a student submits a written withdrawal with confirmation of an anticipated return date, which falls within the same payment period, a Return of Title IV funds is not required.  This notification from a student is typically done using the withdrawal form or by email.

For example: If a student withdraws during the first course of the payment period and specifies a return at the beginning of the second course in the same payment period, a Return of Title IV funds is not required. ABTU is required to recalculate the student’s financial aid package based on 1/2 time enrollment status and using a cost of attendance and corresponding EFC for the period of time the student was in attendance.

ABTU is an online school that takes attendance. Therefore, students that do not log in and perform an academic activity within the first week (seven days) of a course or 14 days at any time during a course are considered dismissed.  The last date of the student’s academic activity is the date that is used to determine the amount of Federal funds that have been earned.

If an enrolled student withdrew without confirming intent to return, and later returns, the student is treated as though he/she did not cease attendance, as long as re-entry is done within the same payment period.

A student requesting a Leave of Absence must do so using the Leave of Absence form. A withdrawal is not the same as a Leave of Absence. Please see the Leave of Absence and/or withdrawal policies

If a student is due a post-withdrawal disbursement of a Pell grant, the school must credit the student’s account with the post-withdrawal disbursement for current charges within 180 days, and must process a post-withdrawal disbursement to the student no later than 45 days after the school’s date of determination that the student withdrew.

A post-withdrawal disbursement is different than a credit balance. If a student is not due a post-withdrawal disbursement, but has a positive balance with ABTU, the funds will be disbursed within 14 days of the college completing the Return to Title IV Calculation (R2T4)

In the event a student is over awarded, the Pell Grant for the over-awarded class will be sent back before the R2T4 is performed.

There may be Title IV funds that cannot be disbursed once a student withdraws because of other eligibility requirements.  For example, if the student is a first-time, first year undergraduate and has not completed the first 30 days of the payment period before withdrawing, he or she will not be eligible to receive loan funds that would have been received had the student remained enrolled past the 30th day. If a student withdraws before establishing half-time enrollment status (six credits) the first disbursement of Direct loans will be counted as aid that could have been disbursed in the Return to Title IV calculation. The school will not actually disburse these loan funds as a post-withdrawal disbursement or any subsequent disbursement.

If a student has received unearned Title IV program funds, the student must return the remaining amount.  Any loan funds that the student must return may be repaid in accordance with the terms of the promissory note. That is, the student may make scheduled payments to the holder of the loan over a period of time.

8.    Federal Student Aid Transfer

Students may not be eligible for partial or full amounts of Federal Student Aid (Pell Grants and Direct Loans) if they have received or applied for Federal Student Aid at other post-secondary colleges. In order to receive financial aid funds at ABTU, a student must first withdraw from his or her previous college and then reapply for funding at ABTU.

Transfer students may also have complications with payment periods that overlap between the two colleges which may result in their financial aid package not covering the tuition bill. To resolve such issues, the student must provide information from the other college or must wait to enroll until the overlapping loan issue is resolved.

A student with previous colleges or universities on record may be required to provide transcripts or a letter of explanation as to why a transcript is not available to ABTU. Failure to do so may result in cancellation of a student’s application. ABTU will evaluate each student on a case-by-case basis if a transcript is not available to determine if enrollment will be allowed.


Updated 11/29/2018: Revised Direct Loan language and Payment Period Definitions.

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