Federal Aid and Withdrawals

On This Page:

Federal Regulations  |  Earned And Non-Earned Aid  |  Post-Withdrawal Disbursements  |  Required Returns  |  Refund of Earned Aid

Attendance for the Entire Award Period

Federal aid funds are awarded under the assumption that you will attend the institution for the entire period in which federal assistance was awarded. If you withdraw from school, you may no longer be eligible for the full amount of Title IV funds that you have received or were scheduled to receive. Therefore, a withdrawal may not only affect you academically but financially as well.  We encourage you to read the information below regarding financial aid and withdrawals.

 

Applicable Federal Regulations: 34 Cfr 668.22

This law requires that institutions determine the amount of federal financial aid (Title IV programs) that a student earned at the time of his or her withdrawal. The Title IV programs that are covered by this law include: Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOGs), Federal Direct Stafford Loans, Federal Direct PLUS Loans, and Federal Perkins Loans.

When a student withdraws during the payment period or period of enrollment, the amount of Title IV program assistance that the student earned to that point (Withdrawal Date) is determined by a specific federal formula. If the student received less assistance than the amount that was earned, the student may be able to receive those additional funds as a Post-Withdrawal disbursement. If the student received more assistance than the amount that was earned, the excess funds must be returned by the school and/or the student.

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Earned And Non-Earned Aid

When a student withdraws and they are a financial aid recipient, the University Financial Aid Office (UFAO) has to determine what percentage of their aid has to be returned to the Federal Government. This is done through a process called R2T4 (Return calculation). Federal Regulations state that a student begins earning Federal (Title IV) funds on his or her first day of attendance for the given period of enrollment. The earned aid is therefore calculated by dividing the number of days attended by the total number of days in the given term to determine the percent of aid earned.

In other words,

 

The Percent of Title IV Aid Earned  =  __Number of days attended__
                                                                      Number of days in term         

 

Based on the results of this calculation, the Financial Aid Office is required to notify the student of his or her eligibility, if any, for a Post-Withdrawal disbursement within 30 days of the date the student withdraws from the University.   The amount of assistance that a student has earned and is therefore, eligible to keep, is determined on a prorata basis. For example, if the student completed 30% of the payment period or period of enrollment, the student has earned 30% of the federal financial aid that he or she received or was scheduled to receive.  This also means that the student did not earn 70% of the scheduled federal financial aid and this amount must be returned to the federal financial aid program.  Once a student has completed more than 60% of the payment period or period of enrollment, he or she has earned all the federal financial aid received or scheduled to be received for that period.

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Post-Withdrawal Disbursements of Federal Financial Aid

If the withdrawn student did not receive all of the funds that he or she earned, they may be eligible for a Post-withdrawal disbursement. If Post-withdrawal disbursement includes loan funds, the student’s School Financial Aid Office must get their permission before it can disburse them. Students may choose to decline some or all of the loan funds so that they do not incur additional debt.

For undergraduate students, all or a portion of the Post-Withdrawal disbursement of grant funds may be automatically used for any existing outstanding charges, including tuition, fees and housing charges.  The Financial Aid Office will need the student’s permission to use the Post-Withdrawal grant disbursement for all other school charges. If the student does not give permission (some schools ask for this when students enroll), they will be offered the funds. However, it may be in the student’s best interest to allow the school to keep the funds to reduce their debt at the school.

There are some Title IV funds that may have been scheduled for release but can no longer be disbursed on the student’s account because their withdrawal and other eligibility requirements have not been met.

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Required Post-Withdrawal Returns

If the withdrawn student received more Title IV program funds than they earned, the school’s financial aid office must return this unearned excess amount to the appropriate aid program.   

As required under regulation 34 CFR 668.22 and determined by the Return Calculation, unearned aid is returned in the following order as applicable:

  1. Unsubsidized Direct Stafford Loans (other than PLUS loans)
  2. Subsidized Direct Stafford Loans
  3. Federal Perkins Loans, Federal PLUS Loans
  4. Federal Pell Grant
  5. Federal Supplemental Educational Opportunity Grant

Any unearned portion of Financial Aid that was disbursed to the student must be repaid to the University.  If the return of the unearned federal funds results in a debit to the student’s account, they will be responsible for the outstanding balance owed to the University.

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Post-Withdrawal Refund of Earned Aid

In the event that the withdrawn student is eligible for a refund of earned aid, the student should ensure that their direct deposit information is updated.  For students who do not have direct deposit, it is extremely important to keep their mailing address up to date so that the refund can be mailed.  Students should also check their SSOL account periodically for any updates, alerts, emails etc that may contain important information that could have an impact on registration should the student decide to return to the University.

The University is required by law to refund earned credit balances within 14 days from the date the earned aid was determined.

For more information about our refund process please visit the SFS refunds page.

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