Withdrawals and Return of Federal Financial Aid
As part of the Higher Education Amendments of 1998, Congress passed provisions governing what must happen to federal financial assistance if students completely withdraw from school in any term. The law assumes that students “earn” federal financial aid award directly in proportion to the number of days of the term attended. For example, if a student completes 30% of the term, he/she earns 30% of the assistance he/she was originally scheduled to receive. This means that 70% of the scheduled awards remain unearned and must be returned to the federal government.
Once a student completes more than 60% of the term, he/she can be said to have earned all (100%) of the assistance. If he/she withdraws from the College (either officially or unofficially) or ceases attendance in all courses before completing more than 60% of the term, he/she may have to repay any unearned federal monies that were already disbursed. Any award money students have to return is considered a federal overpayment. They must either repay that amount in full or make satisfactory arrangements with either the College or the Department of Education to repay the amount. Students must complete these arrangements within 45 days of the date of the College’s notification of overpayment status or risk losing eligibility for further federal financial assistance. In addition, students may owe the College money for tuition that was originally covered by financial aid funds.