Title IV funds are awarded to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive. If a recipient of Title IV loan funds withdraws from a school after beginning attendance, the amount of Title IV grant or loan assistance earned by the student must be determined. If the amount disbursed to the student is greater than the amount the student earned, unearned funds must be returned. If the amount disbursed to the student is less than the amount the student earned, and for which the student is otherwise eligible, he or she is eligible to receive a Post-withdrawal disbursement of the earned aid that was not received.
Withdrawal and Requirements for Return of Title IV Funds
This policy applies to students who withdraw voluntarily or who are required to withdraw. Aid for these students is determined according to the policy outlined below. The term “Title IV Funds” refers to the Federal financial aid programs authorized under the Higher Education Act of 1965 (as amended). At the University of Windsor this includes the following programs:
- Unsubsidized Federal Direct Loan (Direct Loan)
- Subsidized Federal Direct Loan (Direct Loan)
- Federal Parent/Grad PLUS Loan
Policy: If a student who has received Title IV funding withdraws from all courses prior to completing over 60% of a semester, he/she may be required to repay a portion of the federal financial aid received for that term. A pro rata schedule is used to determine the amount of federal student aid funds a student has earned at the time of withdrawal. The return of funds is based upon the concept that students earn their financial aid in proportion to the amount of time in which they are enrolled. Under this reasoning, a student who withdraws in the second week of classes has earned less of his/her financial aid than a student who withdraws in the seventh week. Title IV aid is earned in a prorated manner on a per diem basis up to the 60% point in the term. Title IV aid is viewed as 100% earned once you have completed more than 60% of the term. In accordance with federal regulations, when financial aid is involved, funds are allocated to the aid programs in the following order:
- Unsubsidized Federal Direct Loan (Direct Loan)
- Subsidized Federal Direct Loan (Direct Loan)
- Federal Parent/Grad PLUS Loan
- Other institutional aid; and
- The student, if applicable.
A student’s withdrawal date is:
- The date the student began the institution’s withdrawal process or officially notified the institution of intent to withdraw; or
- The midpoint of the period for a student who leaves without notifying the institution; or
- The student’s last date of attendance at a documented academically-related activity. The student is responsible for the return of refunded Title IV funds for which the student was determined to be ineligible (to the Title IV loan program) within 45 days after notice from the University of an overpayment. Failure to return funds as required will result in the loss of eligibility for federal student aid.
Post-withdrawal Disbursement of Title IV Loan Funds
For a student who withdraws after the 60% point-in-time, even though a return is not required, a school may have to complete a Return calculation in order to determine whether the student is eligible for a Post-withdrawal disbursement.
The University will notify a student, or parent for a parent PLUS loan, in writing prior to making any Post-withdrawal disbursement of loan funds within 30 days of the date of a school’s determination that a student has withdrawn. The notice will identify the type and amount of the loan funds to be credited to the student’s account and will advise the student, or parent for a parent PLUS loan, they may accept or decline all or a portion of the funds. The notice will also advise the student, or parent for a parent PLUS loan, of the obligation to repay the loan funds should they choose to accept all or a portion of the funds.
If the student, or parent for a parent PLUS loan, does not wish to accept some or all of the loan funds that the institution wishes to credit to the student’s account, the institution will not disburse those funds. The student, or parent for a parent PLUS loan, will be advised in this correspondence that they have thirty days from the date of notification to respond to the University. Failure to respond, or a late response may result in a return post-withdrawal funds to the lender. If authorization from a student (or parent for a PLUS loan) is received after the deadline, the school is not obligated to make a Post-withdrawal disbursement of loan funds.
If a student or parent submits a timely response accepting all or a portion of a Post-withdrawal disbursement, per the student’s or parent’s instructions, the school will disburse the loan funds within 180 days of the date of the institution’s determination that the student withdrew.
