1. Skip to navigation
  2. Skip to secondary navigation
  3. Skip to content
  4. Skip to sidebar

Primary Navigation

Returning Federal Financial Aid
Funds After Withdrawing

Special rules apply when students withdraw after receiving student financial aid (SFA) for the term from any of the following programs: 

  • Federal Pell Grant
  • Federal Supplemental Educational Opportunity Grant (SEOG)
  • TEACH Grant
  • Federal Perkins Loan
  • Federal Direct Subsidized and/or Unsubsidized Loan
  • Federal Direct PLUS Loan (for graduate students)
  • Federal Direct PLUS Loan (borrowed on the student's behalf)
  • Other Title IV programs.

Print a pdf of this information

These rules are federally mandated. Before Malone University can calculate any tuition/fee refunds to a student under the institutional refund policy (see the Academic Calendar for this policy), the Financial Aid Office must determine whether any financial aid funds should be paid back.
The Higher Education Amendments of 1998 define withdrawal as failure to complete the period of attendance on which federal aid eligibility was based. Therefore, this policy affects not only those individuals who complete the formal withdrawal notification process (as specified by the registrar), but also those students who simply stop attending classes. In either case, when a recipient of Title IV funds ceases attendance during a term, the university must calculate how much SFA was earned by the student.

A percentage is determined by the following formula:

Number of calendar days completed in the term as of the date of withdrawal
divided by
Total number of calendar days in the term
If this percentage is more than 60 percent, no paybacks will be processed. Students will have completed at least 60 percent of the term if they withdraw on or after the dates listed below:
•    For fall semester attendees  – October 31, 2011
•    For spring semester attendees  – March 27, 2012
If the result is 60 percent or less, then this percentage is used to determine how much of the aid that was disbursed (or could have been disbursed) is considered earned. The remainder must be returned to the Title IV program(s). Return of funds is processed as outlined below.
Malone University must return the lesser of (1) the amount of SFA not earned or (2) the institutional costs (tuition, housing, etc.) that the student incurred multiplied by the percentage of SFA not earned.

The student (or parent, in the case of a PLUS loan) must repay the amount of unearned SFA remaining after the university has returned its share.

Allocation of Returned Funds
Unearned funds are first applied (paid back) to any Title IV loans borrowed during the term. As stipulated by federal regulations, funds are returned in the following order:

  • Unsubsidized Direct Loan
  • Subsidized Direct Loan 
  • Federal Perkins loans 
  • Federal Direct PLUS Loan (for graduate students) 
  • Federal Direct PLUS loans

When the school must return loan funds to the lender on the student’s behalf (or parent’s, in the case of a PLUS loan), the student’s billing statement  will be charged for this amount. When the federal calculation determines, instead, that it is the student’s (or parent’s) responsibility to return funds directly to the lender, the earned Title IV loan funds are repaid in accordance with the terms of the loan.

If unearned funds remain after all loans have been repaid, the remaining unearned funds must be credited to Title IV programs in the following order:

  • Federal Pell Grant
  • Federal SEOG 
  • TEACH Grant

When the school must return grant funds on the student’s behalf, the student’s billing statement will be charged for this amount. When the responsibility for repaying funds to the Title IV grant programs falls to the student, the student is required to return only 50 percent of the grant repayment as calculated using the federal formula. Grant overpayments may be collected according to arrangements satisfactory to the school, or by overpayment collection procedures prescribed by the Department of Education.

Withdrawing during the refund period
Withdrawals during the university’s refund period (during which tuition/fee refunds may apply), institutional aid that has credited to the student account may be adjusted. Please refer to the Academic Calendar for the appropriate dates.

Withdrawing from Malone University
If a student must withdraw from all courses and leave the University, an official withdrawal form from the Office of the Registrar must be completed. This official withdrawal form must be approved, processed and returned to the Office of the Registrar no later than the last day of classes during the semester. No withdrawal will be approved or processed during the week of final examinations.   All students should be aware that withdrawing (either officially or unofficially) can adversely affect scholarships and grants for the next term of attendance. The Office of Financial Aid can provide guidance in those cases.

Unofficial Withdrawal
“Unofficial withdrawals” are defined as those students who simply stopped attending classes. These students never went through a formal process to withdraw but did not complete the period of attendance on which their federal aid eligibility was based. As noted in the Federal Student Financial Aid Handbook, the Department of Education mandates that universities develop a mechanism for determining whether a student who is a recipient of Title IV grant or loan funds has ceased attendance without notification during the period of enrollment.
To meet this requirement, the Office of Financial Aid has created a term-based report that identifies all students who received federal aid and posted all “F” and/or “W” grades. For students falling into these categories, we must determine if the student actually began attendance and, if so, when the attendance ceased. Once we have that information, these students are processed as schedule cancellations (if never attended) or as unofficial withdrawals (if attended and left without officially withdrawing). For schedule cancellations, the student account will be charged for all disbursed aid so that it can be returned to the source. For unofficial withdrawals, an unofficial withdrawal calculation is performed for refund purposes.
Each student is responsible for having class instructors contact the Office of Financial Aid with a last date of attendance or class-related activity by the accounts receivable posting date that is shown in the student’s Unofficial Withdrawal letter. If acceptable documentation is provided, the later date will be used for the unofficial withdrawal calculation.