Federal Regulation 34 CFR 668.22 specifies how a school must determine the amount of Title IV program assistance you earn if you withdraw from school. The Title IV programs offered by the university that are covered by this law are as follows: Federal Pell Grants, Iraq and Afghanistan Service Grants, TEACH Grants, Direct Loans, Direct PLUS Loans, and Federal Supplemental Educational Opportunity Grants (FSEOG).
Though your aid is posted to your account at the beginning of each term, you earn the funds as you complete the term. If you withdraw during your payment period or period of enrollment (please contact the Financial Aid Department to find which one applies to you), the amount of Title IV program assistance you have earned up to that point is determined by a specific formula. If you received (or the school or your parent received on your behalf) less assistance than the amount you earned, you may be able to receive those additional funds. If you received more assistance than you earned, the excess funds must be returned by the school and/or you.
The amount of assistance that you have earned is determined on a pro rata basis. For example, if you completed 40% of your payment period or period of enrollment, you earned 40% of the assistance you were originally scheduled to receive. Once you have completed more than 60% of the payment period or period of enrollment, you earned all the assistance you were scheduled to receive for the period.
There are two types of withdrawals, official withdrawals and unofficial withdrawals.
- The official withdrawal date is determined by the Registrar’s Department based on when a student drops all of their classes, or notifies a university official of their intent to withdraw. In the case of module courses, if a student drops all future or current modules after completing a module, the withdrawal date is the last date of academic participation.
- Unofficial withdrawals are students who failed all of their classes per the grades reported at the end of each semester. UWM’s F grade policy requires that all F grades be reported with the corresponding week the student last participated in the class. The withdrawal date is the Saturday of week of the highest F grade received.
The “Return to Title IV” calculation has several steps. Below is the pertinent information involved in the calculation.
- The school determines the amount of Title IV financial aid that has been disbursed to your account versus the amount of Title IV financial aid that could have been disbursed to your account. In most cases the full amount of aid will have disbursed. In the instance that your aid has not been disbursed you may be eligible for a post-withdrawal disbursement.
- The school determines the amount of time you attended versus the total days of the semester. Breaks of five or more days during the semester are removed from the total days of the semester. The calculation is represented as a percentage of aid the student has earned.
- The school multiplies the percentage of aid earned by the total amount of disbursed aid and aid that could have disbursed. This is the amount of aid the student has earned.
- The school takes the amount of aid the student has earned and subtracts it from the total aid disbursed for the student. This is the amount of aid the student has not earned.
- The school determines the amount of institutional charges that have been applied to the students account. This amount is multiplied by the percentage of aid earned. This is the amount of unearned institutional charges.
- The school reviews the amount of unearned aid versus the amount of unearned institutional charges, which is done within 30 days from the date the school determined the student withdrew (officially and unofficially). The lesser of the numbers is the amount of aid that is returned. The school has 45 days from the date the school determined the student withdrew (officially and unofficially) to return this amount. Below is a list of the Title IV programs to which the R2T4 calculation applies. The programs are listed in the exact order in which funds must be returned to the Department of Education (as applicable):
- Federal Direct Unsubsidized Loan
- Federal Direct Subsidized Loan
- Federal Direct PLUS Loan
- Federal Pell Grant
- Iraq and Afghanistan Service Grant
- Federal Supplemental Educational Opportunity Grant (FSEOG)
- Federal TEACH Grant
- Other Federal, State, Private, or Institutional Aid
If a student did not receive all the Title IV funds earned prior to their withdrawal, the student may be eligible for a post-withdrawal disbursement. Post-withdrawal disbursements will first be applied to any outstanding tuition, fees, and room and meal plan charges. If any subsequent credit balance remains, this amount will be issued to the student within 14 days. The post-withdrawal disbursement can be from loans funds or grants funds depending on eligibility.
- If the post-withdrawal disbursement includes loan funds, the school will offer the post withdrawal disbursement of loans within 30 days of the date the school determined the student withdrew. The student will have 14 days after notification to accept or decline loan funds.
- If the post-withdrawal disbursement includes grant funds, the school will disburse the post withdrawal disbursement of grants within 45 days of the date the school determined the student withdrew.
Please note, any Title IV funds that may be scheduled to be received after withdrawal must meet the required conditions for a late disbursement prior to being considered for a post-withdrawal disbursement. Any loans accepted for a post withdrawal disbursement will be included in your overall federal loan indebtedness.
For any loan funds that you must return, you (or your parent for a Direct PLUS Loan) repay in accordance with the terms of the promissory note. That is, you make scheduled payments to the holder of the loan over a period of time.
Any amount of unearned grant funds is called an overpayment and is returned by the school on your behalf. The maximum amount of a grant overpayment you must repay is half of the grant funds you received or were scheduled to receive. If the grant overpayment amount is $50.00 or less, the school does not have to return the funds.
The federal refund formula is rather complex and separate from any refund policy of the school, therefore you may still owe funds to the school to cover unpaid institutional charges. The school may also charge you for any Title IV program funds the school was required to return. If you don’t know the school’s refund policy, or need the requirements and procedures for officially withdrawing, please contact the Financial Aid Department for a copy of the policy.
If you need to withdraw from all of your classes, you are encouraged to speak to a financial aid advisor before doing so to determine how it may affect your financial aid and your Satisfactory Academic Progress. If you have any questions about your Title IV program funds, you can call the Federal Student Aid Information Center at 1-800-4-FEDAID (1-800-433-3243). TTY users may call 1-800-730-8913. Information is also available on Student Aid on the Web at: https://studentaid.gov/.