Impact of Withdrawal on Financial Aid
Using a specific formula, financial aid is considered earned based on the amount of time a student has completed during a term for which aid is received. A federal financial aid recipient who withdraws prior to completing more than 60% of the term will have to repay unearned aid in relation to the time remaining where the student is no longer enrolled.
For example: if a student has completed 25% of a term at the point of withdrawing, the student has earned 25% of the aid scheduled to be received and thus must repay the portion of unearned aid. The Student Financial Aid Office will send notification to withdrawn students as to the amount of aid that must be repaid.
Continue reading below for additional information.
All students must successfully complete at least two thirds of cumulative attempted hours to remain eligible for financial aid under Satisfactory Academic Progress (SAP) requirements. Withdrawing from classes will impact the percentage of credits earned compared to credits attempted and possibly the SAP Grade Point Average measure as well. This may result in the student failing SAP when the assessment is measured at the end of the term and consequently being ineligible for aid in subsequent terms.
Return of Funds
Federal Return of Title IV Funds policy mandates that students who withdraw from all classes may keep only the federal financial aid they have earned up to the time of withdrawal. Accordingly although aid is posted to the student's university account at the beginning of the term, the student earns the aid funds as the term is completed.
Once a student has completed more than 60% of the term, the student has earned all of the assistance received for that term. Any student withdrawing prior to completing more that 60% of the term should expect to have to repay financial aid in a percentage roughly equivalent to the percentage of time not in attendance. In the event that a student withdraws from all classes, the UW Colleges Student Financial Aid Office will determine the amount of financial aid a student has earned and how much unearned aid must be returned for educationally-related expenses tied to the weeks the student will no longer be enrolled.
If the amount of aid already disbursed to a student for the semester exceeds the recalculated earned-aid eligibility stemming from the withdrawal, it will be necessary that appropriate payment be made for the unearned aid. Student payment could be from tuition refunded by UW Colleges (Refund Schedule) or the student using funds that were given directly via a financial aid refund check.
Federal aid programs awarded at UW Colleges that fall under the Return of Title IV Funds policy include (and from which funds will be returned in the following order):
- Direct Unsubsidized Student Loan
- Direct Subsidized Student Loan
- Direct Parent PLUS Loan
- Federal Pell Grant
- Federal Supplemental Educational Opportunity Grant or SEOG
- Iraq and Afghanistan Service Grant
- Other federal Title IV aid
State and institutional aid programs may require similar treatment in circumstances where a credit balance from an institutional refund remains after the requirements for the return of unearned federal aid have been met.
In cases where a student may not have received all of the federal financial aid funds earned before withdrawing from classes, the student may be due what is referred to as a post-withdrawal disbursement.
A federal grant must have been awarded prior to withdrawal for the grant to be considered under post-withdrawal disbursement (with the exception of a Pell Grant for a student whose Free Application for Federal Student Aid or FAFSA was selected for Verification and is subsequently verified to be Pell eligible). For post-withdrawal disbursement of a federal grant, the Student Financial Aid Office will apply the grant funds toward tuition, fees, and other eligible institutional charges, but will notify the student to give the option to decline the grant award.
A federal loan (Direct Subsidized Student Loan or Direct Unsubsidized Student Loan) must have been accepted by the student, or by the parent in the case of a Direct Parent PLUS Loan, and the loan award’s acceptance must have been sent to or “originated” with the US Department of Education prior to the student's withdrawal to be eligible for post-withdrawal disbursement. Also, a Direct Loan Master Promissory Note or MPN must have been completed by the time a return of Title IV calculation is performed by the school for the loan award to be eligible for post-withdrawal disbursement.
The student's permission (or parent's for a Direct Parent PLUS Loan) is required to disburse loan funds stemming from a post-withdrawal determination. With that, the Student Financial Aid Office will contact the student (or parent) if a post-withdrawal disbursement is applicable and eligibility requirements have been met/or of any additional application steps that are required prior to disbursement, such as completion of loan entrance counseling.
If a student stops attending all classes, does not officially withdraw, and fails to earn a passing grade in at least one course and/or has a 0.0 GPA for the term, the student may be considered an unofficial withdrawal. Consequently, such a student may owe unearned federal aid and will be notified of the amount of aid that must be repaid.
At the end of each term (fall semester, spring semester, and summer) after final grades have been recorded, the Student Financial Aid Office identifies aid recipients to whom unofficial withdrawal status may apply. Grades reported by professors and the last week of the student’s academic activity reflected by those grades are utilized in the review process. When a student's academically-related activity does not definitively put the student beyond the 60% point of the term, the student may owe for unearned federal aid as an unofficial withdrawal. Academic-related activities include:
- physically attending a class where there is an opportunity for direct interaction between the instructor and students;
- submitting an academic assignment;
- taking an exam, completing an interactive tutorial, or participating in computer-assisted instruction;
- attending a study group that is assigned by the school;
- participating in an online discussion about academic matters; and
- initiating contact with a faculty member to ask a question about the academic subject studied in the course.