Title IV financial aid funds are awarded with the assumption that the student will attend school for the entire term for which the aid was awarded. Therefore, if a student withdraws or ceases attendance, they may no longer be eligible for the full amount of Title IV funds originally scheduled to receive or may be eligible for a post withdrawal disbursement. For example, a student who withdraws in the second week of the semester has earned less of their financial aid than a student who withdraws in the fifth week.
It is important that all aid recipients understand the potential financial impact of withdrawing from classes.
Funds subject to a Return to Title IV (R2T4) calculation include Federal Direct Student Loans, Pell Grants, and Federal Supplemental Educational Opportunity Grants (FSEOG). Institutional scholarship funds and Federal Work Study are not subject to these calculations.
Federal regulations require a recalculation of financial aid eligibility if a student:
Reduces units, or;
Completely withdraws, or:
Stops attending before the end of the semester; or
Does not complete all modules (courses which are not scheduled for the entire semester or payment period for which the student has registered at the time the modules began), or;
Does not provide written confirmation to SWC at the time of ceasing attendance that the student plans to attend a future module during the same payment period
Note: Once the 60% point of the payment period is reached, a student is considered to have earned all of the financial aid originally awarded and will not be required to return any funds.
Satisfactory Academic Progress
Withdrawal from school may affect your Satisfactory Academic Progress standing and future eligibility for financial aid.
When a student reduces his/her course unit load, but does not completely withdraw from all classes, there is a change in enrollment status. A Return to title IV calculation is not required, but a student’s financial aid eligibility will be adjusted accordingly and can result in an Institutional Liability owed to the college. A hold will be placed on the student’s record, prohibiting registration for future semesters or the receiving of academic transcripts until the debt is paid in full.
For financial aid purposes, there are two types of withdrawals – official and unofficial.
An official withdrawal is initiated by the student and includes withdrawals for medical reasons.
Date determination: The withdrawal date is determined by “the student’s withdrawal date, or the date of notification, whichever is later” or the last date of documented academic related activity. This includes
Military withdrawal: If the student withdraws from school and meets the definition of an “affected individual” under the HEROES Act, the student is not responsible for repaying any Title IV grant overpayment that resulted from the R2T4 calculation.
An unofficial withdrawal occurs when there is no notification or official withdrawal by the student. If the student does not officially drop class(es) and fails to earn a passing grade in at least one course in the term, it will be considered an unofficial withdrawal, even if the student was enrolled in the course(s) for the entire term.
Date determination: Without official notification from the student, the withdrawal date will be the midpoint of the semester or the last date of documented academic related activity as determined by the faculty member.
Students who fail to begin attendance in any class for which he/she was registered in a term will have awarded aid canceled. Any funds received are considered “unearned” and must be returned to the respective aid program(s). The student will be billed for this amount.
Return of Title IV Funds (Earned versus Unearned Aid)
Within 45 days from when you discontinue enrollment, the Financial Aid Office must calculate the amount of financial aid you have earned prior to the date the action was filed. Any aid received in excess of the earned amount is considered unearned. The unearned financial aid must be returned to the respective federal programs no later than 45 days from when the student seperated from Southwestern College. The calculation is based upon only the amount of Title IV Aid for which you were eligible.
Calculating Earned Financial Aid
The amount of earned financial aid is calculated on a daily basis from the first day of classes. The process uses calendar rather than business days. Earned aid is determined by taking the number of days attended before enrollment ended divided by the total number of days in the term (first day of instruction until the last day of finals, excluding spring break for semester students).
Return policies apply to students that withdraw on or before the 60% point of the term. For a student who withdraws after the 60% point-in-time, there is no unearned financial aid.
See examples for calculating the percent of earned aid below.
Once the earned and unearned aid percentages are determined, the next step is to calculate the dollar amount of unearned aid that must be returned. The Return amount is determined by multiplying the unearned aid percentage by the total of all Title IV aid received.
Unearned Aid Percentage
X Total of all Title IV Funds Received
= Total Unearned Aid
If a student did not receive all of the funds that he/she earned, the student may be due a post withdrawal disbursement. Southwestern College may use all or a portion of a student’s post-withdrawal disbursement (including student loan funds, if accepted) to offset outstanding tuition and fees. Please note that there may be scheduled Title IV aid that cannot be disbursed once a student withdraws because of other eligibility requirements.
Federal Direct Loans
Students who have withdrawn from classes and have a post withdrawal disbursement eligibility that includes Federal Direct Student Loan funds often do not wish to incur additional student loan debt. Eligible students will be notified via email and will have ten days to submit a Request to Cancel, Reduce or Reinstate Direct Loan Form to the Financial Aid Office if they wish to have their loan reinstated. If the form is not received within that time frame, it will be assumed that the student has chosen not to receive a post-withdrawal disbursement of their federal direct loan funds.
The R2T4 calculation will be completed within 30 days after the type and date of withdrawal is determined. If the student has been overpaid, he/she will be notified via email of the amount and program of funds that are required to be returned.
Students who have an Institutional Liability will have a hold placed on their record, prohibiting registration for future semesters or the receiving of academic transcripts until the debt is paid in full.
Students who have a Student Liability will be given a period of time in which to repay the debt to the institution, If payment in full is not received by the given date, the debt will be reported to the Department of Education’s Debt Resolution Services. If unpaid after 45 days, a hold will be placed on the student’s DoEd record and he/she will lose federal financial aid eligibility until the funds have been repaid.
Any student loan funds to be returned must be repaid in accordance with the terms of the promissory note, making scheduled payments to the lender or holder of the loan over a period of time.
2019-20 Return to Title IV and Overpayments Policy (pdf)