Return of Federal Student Financial Aid Funds when a Student Withdraws from All Classes During a Semester

The new federal requirements for return of Student Financial Aid Awards prescribe a statutory schedule to determine the amount of Student Financial Aid Program funds a student has earned when the student ceases attendance. The determination is based on the period of time the student was in attendance.

Up through the 60 percent point in each payment period (semester) a pro rata schedule is used to determine how much Student Financial Aid Program funds the student has earned at the time of withdrawal. After the 60 percent point in the payment period, a student has earned 100 percent of the Student Financial Aid Program funds. If a student receiving federal financial aid withdraws from all classes before completing 60 percent of the semester, a calculation is performed to determine if a portion of the financial aid received must be returned.

The amount of Student Financial Aid Program assistance earned is the percentage of Student Financial Aid Program assistance that has been earned, multiplied by the total amount of Student Financial Aid Program assistance that was disbursed (and that could have been disbursed) for the payment period as of the day the student withdrew.

The percentage earned is one of the following:

  • If the day the student withdrew occurs on or before the student completed 60 percent of the payment period for which the assistance was awarded, the percentage earned is equal to the percentage of the payment period for which assistance was awarded that was completed. That is, if a student completed 30 percent of the semester, the student earned 30 percent of the assistance he or she was originally scheduled to receive.
  • If the day the student withdrew occurs after the student has completed 60 percent of the payment period, the percentage earned is 100 percent.

The percentage of the payment period completed is the total number of calendar days in the payment period for which the assistance is awarded, divided into the number of calendar days completed in that period, as of the day the student withdrew. If the student receives less Student Financial Aid Program assistance than the amount earned, the school must comply with the procedures for late disbursement specified by the U.S. Department of Education in regulations.