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Financial Aid

Withdrawals and R2T4

Federal regulations dictate 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.

The policy "focuses on the return of Title IV funds received for the time period during which the student was enrolled." The policy refers to "earned" and "unearned" institutional charges and Title IV funds, excluding Federal Work Study. Title IV funds affected are Federal Direct Loans, Pell Grants, Perkins Loans, and Federal Supplemental Grants.

State Grant funds are not considered Title IV Funds. However, the return of State Grant funds will be calculated using a modified federal policy adopted by the Higher Education Aids Board (HEAB).

The attribution priority will first return funds back to Federal Direct Loans, Perkins Loans, Federal Grants and finally State Grants.

A percentage of institutional charges is to be returned depending upon the percentage of the enrollment period completed. This pro rata return policy will be in effect for all recipients of Title IV aid.

Refund Formula

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
X (times)
Amount of Title IV aid

= Unearned Title IV aid

-or-

Percent of term NOT attended
X (times)
Institutional Charges

= 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%.

EXAMPLE

Enrollment period is 110 days long. Student attended 22 days and withdrew 22/110 = 20% (time enrolled) 100% - 20% = 80% (% of term not completed) Title IV aid disbursed to student was $1000.00 Student institutional costs were $900.00

80% (.80) X Title IV aid disbursed = Amount of unearned aid (.8 X $1000) = $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

Federal Methodology will be used to determine the amount of funds to be returned to HEAB.

We will use the formula and attribution used by the federal policy to determine the amount of state grant aid to return. The funds will be attributed as follows:

Wisconsin Higher Education Grant
Tuition Assistance Grant
Wisconsin Covenant
Wisconsin Indian Grant
Talent Incentive Grant
Lawton Grant
WIHA
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.

Withdrawal Date

The new regulations define 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 Withdrawal

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.

The Financial Aid Office is responsible for determining the date a student withdraws from the university and calculating the amount of aid, if any, 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 students took part in any "academically related activity." Per Department of Education guidance, this 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.