When a student withdraws, two separate processes occurthe Office of the Registrar prorates tuition and some fees (according to their withdrawal policy and refund schedule), and the Office of Student Financial Aid (OSFA) prorates financial aid.
The law specifies how schools must determine the amount of Title IV program assistance that students earned if they withdraw from school. The Title IV programs that are covered by this law are: Federal Pell Grants, Iraq and Afghanistan Service Grants, TEACH Grants, Stafford Loans, PLUS Loans, Federal Supplemental Educational Opportunity Grants (FSEOGs) and Federal Perkins Loans.
When a student withdraws during the payment period or period of enrollment, the amount of Title IV program assistance that was earned up to that point is determined by a specific formula. If the student received (or the school or parent received on the student's behalf) less assistance than the amount that the student earned, the student may be able to receive those additional funds. If the student received more assistance than was earned, the excess funds must be returned by the school and/or the student in the following order:
- Federal Unsubsidized Direct Stafford Loan
- Federal Subsidized Direct Stafford Loan
- Federal Perkins Loan
- Federal Direct PLUS Loan
- Federal Pell Grant
- Federal SEOG
- Federal TEACH Grant
- Iraq and Afghanistan Service Grant
The amount of assistance that a student has earned is determined on a prorata basis. For example, if the student completed 30% of the payment period or period of enrollment, the student earns 30% of the assistance originally scheduled to be received. Once the student has completed more than 60% of the payment period or period of enrollment, the student earns all the assistance scheduled to be received for that period.
If the student did not receive all of the funds earned, there may be due a Post-withdrawal disbursement. If the Post-withdrawal disbursement includes loan funds, the school must get the student's permission before it can disburse them. The student may choose to decline some or all of the loan funds so that additional debt is not incurred. The school may automatically use all or a portion of the Post-withdrawal disbursement of grant funds for tuition, fees and room and board charges. The school 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, the student 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 personal debt at the school. It should be noted that there are some Title IV funds that were scheduled to be received and cannot be disbursed to the student once withdrawn because of other eligibility requirements. If the student receives (or the school or parent receives on the student's behalf) excess Title IV program funds that must be returned, the school must return a portion of the excess equal to the lesser of:
- The student's institutional charges multiplied by the unearned percentage of the student's funds, or
- The entire amount of excess funds.
The institution must return this amount even if it didn't keep this amount of the student's Title IV program funds.
If the school is not required to return all of the excess funds, the student must return the remaining amount. Any loan funds that the student must return, the student (or the parent for a PLUS Loan) repay in accordance with the terms of the promissory note. That is, the student makes scheduled payments to the holder of the loan over a period of time.
Any amount of unearned grant funds that the student must return is called an overpayment. The maximum amount of a grant overpayment that the student must repay is half of the grant funds received or were scheduled to receive. The student does not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. The student must make arrangements with the school or the Department of Education to return the unearned grant funds.
The requirements for Title IV program funds when the student withdraws are separate from the institutions refund policy. Therefore, the student may still owe funds to the school to cover unpaid institutional charges. The school may also charge the student for any Title IV program funds that the school was required to return.
If the student has received funds from the state or an outside agency or received institutional funds, the student will be billed for any amount of funds that is considered an advanced payment. The OSFA must follow the guidelines specified by those organizations regarding withdrawals. For most aid types a prorated return is required.
If you stop attending all classes during a semester and do not go through the University's withdrawal process, you are treated as an "unofficial withdrawal". At the end of each semester, the OSFA identifies all students who did not pass at least one class. The OSFA will work with the colleges to document your last date of attendance. Using that information, you will be reviewed under the Return of Funds calculation.
Reducing hours can have serious impact on your financial aid. If you reduce hours prior to the end of the add/drop period your financial aid will be adjusted accordingly. Please keep in mind that if you already received a refund based upon your higher enrollment, you may need to repay the funds for which you are no longer eligible.
Dropping vs. Withdrawing
If at any point you "drop hours" and your tuition assessment is adjusted, your financial aid may be adjusted.
Withdrawing hours after the add/drop period (provided that you do not fully withdraw) does not affect your current term aid or your enrollment hours; however you will receive a grade of "W" for the course(s) withdrawn. Withdrawing hours after the add/drop period (provided you don't fully withdraw from the university) will not affect your current term aid, but could impact your future eligibility by lowering your completion ratio. See the SAP Policy for more information about completion ratio requirements.
If your enrollment hours are retroactively reduced such that you do not meet the minimum enrollment for the aid programs received, this may affect both your tuition assessment and your eligibility for financial aid for the term the retroactive reduction to enrollment hours was processed. This can occur at any point during the term, as well as after the term has ended.
If you have questions about how changes in your enrollment can affect your current or future financial aid eligibility, contact the OSFA.
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