Withdrawals & Return to Title IV (R2T4)
Federal regulations determine how Federal Student Aid (Title IV) funds are handled when a recipient of those funds withdraws entirely from the University prior to the end of a payment period or period of enrollment. If you withdraw completely before a semester or term has ended, a calculation must be made to determine what portion of your federal aid must be returned. Any student that withdraws prior to 60% of the semester having been completed can expect to have some repayment of funds due.
The policy "focuses on the return of Title IV funds received for the time period during which the student was enrolled." It also refers to "earned" and "unearned" institutional charges and Title IV funds, excluding Federal Work Study. The University, the student or both may be required to send funds back to the federal government based on funds that were unearned, based on the date of withdrawal. In effect, a student is offered aid for a semester or term and should that student not complete that period due to withdrawal from all courses, some of that aid was not earned.
In coordination with federal regulations, the Financial Aid Office will perform the calculation within 30 days of your withdrawal and funds will be returned to the appropriate federal aid program within 45 days of your withdrawal. An evaluation will be done to determine if aid was eligible to be disbursed but had not disbursed as of your withdrawal date. If you meet the federal criteria for a post withdrawal disbursement, you will be notified of your eligibility within 30 days of determining your date of withdrawal. If the eligibility is for a grant disbursement, the funds will be disbursed within 45 days of determining your date of withdrawal. If the eligibility is for a loan, you will be notified in the same timeframe but you must also reply to the Financial Aid Office if you wish to accept the post withdrawal loan obligation. A post withdrawal disbursement of any funds would first be used toward any outstanding charges before any funds are returned to you.
Federal Title IV funds affected include all Federal Direct Loans, Federal Pell Grants, Afghanistan Service Grants and Federal Supplemental Grants. The repayment priority is as follows:
- Direct Unsubsidized Loan
- Direct Subsidized Loan
- Direct PLUS Loan
- Federal Pell Grant
- Afghanistan Service Grants
- Federal Supplemental Grant
- TEACH Grant
State funds are not considered Federal Title IV Funds, but there is a state requirement for determining and returning state funds as well. (See Return of State Aid Policy below.)
To determine the percentage of unearned aid, the new policy uses the number of DAYS enrolled in the award period, rather than weeks. The formula to determine what amount of unearned Title IV aid to be returned is:
Percent of term NOT attended
Amount of Title IV aid
= Unearned Title IV aid
Percent of term NOT attended
= Unearned Charges (or whichever is smallest)
To determine the percent of the term not completed, the number of days the student did attend is divided by the number of days in the enrollment period and this number is subtracted from 100%.
Title IV aid disbursed to student was $1,000. The student's institutional costs were $900. The enrollment period is 110 days long, and the student attended 22 days and withdrew.
- 22/110 = 20% (time enrolled)
- 100% - 20% = 80% (% of term not completed)
- 80% (.80) X Title IV aid disbursed ($1,000) = Amount of unearned aid
- (.8 X $1,000) = $800
To determine the actual amount of aid that has to be returned, the amount of unearned aid is compared to the amount of unearned costs, using the same formula. Thus, while the unearned aid in this example was $800, the amount of unearned cost is only $720 (.8 X $900).
The amount to be returned by the school is the lesser of these dollar amounts. The student is then liable for the difference between the two amounts. ($800 - $720 = $80).
Return of State Grant Policy
As was noted previously, state funds are not considered Federal Title IV funds. However, the return of State aid will be calculated using a modified federal policy adopted by the Wisconsin Higher Educational Aids Board (HEAB).
We will use the formula and attribution used by the federal policy to determine the amount of state aid to return. The funds will be attributed as follows:
- Wisconsin Grant
- Tuition Assistance Grant
- Wisconsin Covenant
- Wisconsin Indian Grant
- Talent Incentive Grant
- Lawton Grant
- Advanced Opportunity Grant
- Institutional Scholarships
- Private Scholarships
State aid programs will have priority for any credit balance remaining from an Institutional Refund after the federal funds are satisfied.
If there is an Institutional Refund issued after a student withdraws, and there is a balance remaining after the federal funds are subtracted, the State grant funds will be next in line to receive a refund. The amount of the refund will correspond to the federal formula of earned and unearned funds.
Regulations define the withdrawal date as the date:
- The student begins the withdrawal process prescribed by the school, OR
- The student provided the school with official notification of the intent to withdraw, OR
- The midpoint of the payment period in which the student received Title IV aid or the last date of an academically related activity that the student participated in, for a student who does not begin the process or provide notification.
Unofficial withdrawals are defined as students who begin a semester but cease attending classes at some point during the term without officially withdrawing from the University. Professors are instructed to give students who stopped attending their classes before the end of the term a 'WF' for the course. Students who receive all WF's will be considered withdrawn from the University, and may owe unearned financial aid back to the Title IV programs.
Within 30 days of the end of the semester, we will determine the date a student withdrew from the University and calculate the amount of aid, if any, that needs to be returned to the Title IV programs. In order to make this determination, we will request information from the faculty regarding the last day the student took part in any “academically-related activity.” Should the last day of activity be undetermined (for example, unable to reach the appropriate faculty), the 50% point of the semester will be used to calculate the return.
An evaluation will be done to determine if aid was eligible to be disbursed but had not disbursed as of your withdrawal date. If you meet the federal criteria for a post withdrawal disbursement, you will be notified of your eligibility within 30 days of determining your date of withdrawal. If the eligibility is for a grant disbursement, the funds will be disbursed within 45 days of determining your date of withdrawal. If the eligibility is for a loan, you will be notified in the same timeframe but you must also reply to the Financial Aid Office if you wish to accept the post withdrawal loan obligation. A post withdrawal disbursement of any funds would first be used toward any outstanding charges before any funds are returned to you.
Department of Education guidance states academically-related activity includes:
- Physical class attendance where there is direct interaction between instructor and student
- Submission of an academic assignment
- Examination, interactive tutorial or computer-assisted instruction
- Participation in a study group
- Participation in an online discussion about academic matters
- Initiation of contact with instructor to ask question about academic subject