The Federal Higher Education Act (HEA) of 1965 was revised in 1998, and new regulations for Title IV student financial assistance programs were developed. Attending classes earns students Title IV federal financial help. When a student does not complete 60% of a semester or term, the “unearned” part of their aid must be returned to federal programs.
If a student withdraws from the institution before completing 60% of the semester or term, the financial aid office recalculates Title IV eligibility. The proportion of earned aid is recalculated using the Federal Return of Title IV funding formula:
The number of days finished up to the withdrawal date divided by the total days in the semester or term equals the percentage of semester or term completed.
The Withdrawal date is established by the official date the student started the withdrawal procedure or notified the institution of his or her plan to withdraw.
Example: On September 26, Student A withdraws from the Fall semester. The semester started on August 16 and will finish on December 10. The semester is made up of 119 days. During the semester, the student attended 42 days.
- 42 days / 119 days = 35%
As a result, the student has completed 35% of the semester and must submit a Title IV computation report.
If a student received less help than was disbursed, the institution must refund a portion of the funds, and the student must return a portion of the funds. When Title IV monies are returned, the student may owe the university a debt.
If a student earned more aid than was disbursed to him or her, the institution must pay the student a post-withdrawal disbursement within 120 days after the student’s withdrawal date.
Any unearned federal financial aid must be returned to program funds in the priority sequence set by rule, up to the amount of help the student has received from the program: Unsubsidized Stafford Loan, Subsidized Loan, PLUS Loan, Federal Pell Grant, Federal SEOG, and other Title IV programs.
If a student departs the institution without giving official notice, the university may set a withdrawal date based on the semester’s midpoint or the student’s last day of attendance as verified by an academically connected activity.
If a student receives all Fs throughout a semester, it may be regarded an unofficial withdrawal if the last date of attendance (LDA) is unknown, or the Financial Aid Office will use the LDA inputted by the professor into the system.