The Financial Aid Office is required by federal regulations to recalculate federal financial aid eligibility for students who withdraw, drop out, are dismissed, or take a leave of absence prior to completing 60 percent of a semester. Recalculation is based on the percentage of earned aid using the following Federal Return of Title IV funds formula:
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Percentage of aid earned
equals
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Percentage of semester completed
equals
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The number of days completed up to the withdrawal date divided by the total days in the semester (any break of five days or more is not counted as part of the days in the term)
Unearned aid funds are returned to the appropriate federal program. The institution must return the amount of Title IV funds for which it is responsible no later than 45 days after the date of the determination of the date of the student's withdrawal.
Aid to be returned equals (100 percent minus percentage of aid earned) multiplied by the total amount of aid that could have been disbursed during the semester.
If a student earned less aid than was disbursed, the institution would be required to return a portion of the funds and the student would be required to return a portion of the funds. This may result in the student owing a debit balance to the institution.
If a student earned more aid than was disbursed, then the student may ve eligible for a post-withdrawal disbursement. The institution must pay a post-withdrawal disbursement within 120 days of the student's withdrawal.
Unearned aid funds are returned in the following order:
- Unsubsidized Direct Stafford Loans (other than PLUS loans)
- Subsidized Direct Stafford Loans
- Federal Perkins Loans
- Federal Parent (PLUS) Loans
- Federal/Direct PLUS Loans
- Federal Pell Grants
- Academic Competitiveness Grants
- National SMART Grant
- Federal Supplemental Opportunity Grants
