According to federal regulations, students may lose some of their federal student financial assistance if they don’t finish their enrolled program of study. This policy applies to students who:

The “withdrawal date” is the date the student withdraws, as determined by the institution. “Return of Title IV Funds” is the federally mandated process by which an institution calculates the amount of federal funds to be returned for a Title IV federal financial aid recipient who begins attendance and subsequently withdraws or who ceases attendance during a term. The calculations may result in a reduction of the student’s Title IV loan and grant aid to reflect the percentage of the term that the student attended if they attended 60 percent or less of the term. Based on these calculations, the institution, and the student may be required to return any “unearned” federal assistance. The institution is required to perform the calculation within forty-five (45) days of the determination of the discontinuance of the study.

For students who receive Title IV federal aid and withdraw from their program of study before completing 60% of a payment period or term, a calculation will be conducted to determine the amount of federal student aid funds they have earned during the time they were enrolled. If the student remains enrolled for more than 60% of the payment period or term, all disbursed federal aid is considered fully earned. This calculation, performed prior to any tuition refund calculation based on the institution’s policy, may lead to the determination of unearned aid that must be returned to the U.S. Department of Education (USDE) by the institution and the amount the student must repay to the USDE.

If the R2T4 calculation results in the determination that the amount of federal aid disbursed for the period on behalf of the student exceeds the amount of federal aid that has been earned by the student for that period, then a refund of the unearned portion must be returned to the U.S. Department of Education. The institution will be responsible for its portion of the refund and the student may be responsible to return their portion of the unearned federal aid as determined by the calculation.

Unearned funds to be returned to the U.S. Department of Education by the institution, and any unearned grant funds owed by the student, must be repaid within 45 days of the date the institution determined that a student has withdrawn. Unearned, Title IV funds owed by the student to a federal loan program must be repaid in accordance with the repayment terms of the student’s loan.

The calculated percentage of the semester completed becomes the percentage of the Title IV aid that the student has earned. The total Title IV aid disbursed to the student, or that could have been disbursed to the student minus the amount of Title IV aid earned by the student yields the amount of Title IV loan and grant aid that is unearned and that must be returned:

Total Title IV Disbursable Aid – Title IV Aid Earned = Title IV Loan and Grant to be Returned

Refunds of unearned federal student aid will be returned to the Title IV programs in the following
order:

If the R2T4 calculation results in the determination that the amount of federal aid earned by the student for the period exceeds the amount of federal aid that has been disbursed on the student’s behalf for that period, then the student may be entitled to a post-withdrawal disbursement of earned funds.

A post-withdrawal disbursement of Federal Title IV aid occurs when the amount of Title IV aid earned by the student is greater than the amount of the Title IV aid disbursed for the semester. A student eligible for a post-withdrawal disbursement will receive written notification from the institution. Students have the right to accept or decline the disbursement of those funds. Students are given 14 days from the date of the notification to respond.

Earned federal grant funds will be disbursed by the institution within 45 days of the date of withdrawal determination. Earned federal student loan funds, eligible for post-withdrawal disbursement, will be offered to the student within 30 days of the date of withdrawal determination. As noted, the student shall have 14 days to accept or decline disbursement of those funds.

Post-withdrawal disbursements shall first be applied to the student’s account to cover any charges that remain unpaid after the student’s withdrawal from the institution. In the event all charges owed by the student have been paid in full, and a credit balance remains on the account, such credit balance will be returned to the student within 14 days of the date that the credit balance was determined. A check will be mailed to the student’s last known address.

The institution will notify the student by email upon completion of the calculation if the student has any responsibilities to repay any federal funds beyond the scope of the student’s existing student loan repayment obligations. In many cases, any return of unearned Title IV funds will result in adverse financial consequences including the student owing tuition and fees to the institution that would otherwise have been paid with federal student aid.

If you are considering withdrawing and have any questions about the financial aid consequences, please contact Molly Moghari at MMoghari@worsham.edu.