Return of Aid Policy
- Return of Title IV Funds
- Withdrawal date
- Title IV Funds calculation
- Unofficial withdrawal-no passing grades
- Request for academic withdrawal
- Determining the amont of unearned aid to be returned
- Postwithdrawal disbursement
- Distribution of R2T4 financial aid refund
- Example of a Return to Title IV Calculation
Federal Aid Overview
Federal Title IV funds are awarded to a student under the assumption that the student will attend school for the entire period for which assistance is awarded. Students receiving financial aid who withdraw, drop, or do not attend courses may be required to return a portion of the financial aid received. Once notified of a total withdrawal, the institution is required to apply a federally mandated formula to determine how much of the federal funding was “earned” by the student up to the time of withdrawal. This review and recalculation is called a “Return of Title IV Aid Calculation.”
Return of Title IV Funds
Federal regulations require that Purdue University use a Return of Title IV Funds calculation if you are receiving Title IV financial aid (Pell, SEOG, PLUS, and Direct Loans) and withdraw, drop, or do not attend courses during a given semester. If you discontinue study (withdraw, drop, or do not attend) all courses within the semester and have previously been awarded federal aid, the University must determine if the federal aid is required to be returned to the appropriate financial aid programs.
We are required to perform the calculation within 30 days of the discontinuance of study. The policy statement below is for your information and reference; please call the Office of Financial Aid at 765-494-5050 with questions regarding the effect and changes of your financial aid award if you plan to discontinue study or withdraw from Purdue University.
This is the date that you discontinue studies at Purdue University.
A student who wishes to withdraw from all current term classes during any semester or summer session may begin the withdrawal process by completing the following actions:
- Log in to myPurdue and perform the following steps:
- Select the Registration tab
- Select “Withdrawal from Current Academic Term"
- Complete and submit the form
The day that you submit your online withdrawal request, unless otherwise determined by the Office of the Dean of Students, will be considered your effective withdrawal date. The withdrawal action will be considered final upon Dean of Students approval of the withdrawal. You will receive email verification when the process is complete.
Specific withdrawal dates can be found in the Mortar Board calendar and on the Office of the Registrar's website. Please note that grade assignment and refund schedules for academic sessions of shorter duration are proportionate to the length of the session.
Before a student withdraws from the University, it is important to be aware of how that decision may impact financial aid. To learn more about this impact, please consult with the Division of Financial Aid.
Title IV Funds Calculation
This is the federally mandated process by which a school calculates the amount of federal funds to be returned for a Title IV aid recipient who withdraws or who ceases attendance during a semester. The calculations may result in a reduction of your Title IV loan and grant aid to reflect the percentage of the semester that you attended, if you attended 60 percent or less of the semester. The Return of Title IV calculation is based on the following:
- The number of days the you attended
- The institutional charges assessed
- The total amount of Title IV aid awarded, accepted, and or disbursed
Furthermore, we—and you—may be required to return any “unearned” federal assistance.
Unofficial withdrawal—no passing grades
Federal financial aid regulations require that any student who fails to earn a passing grade in at least one course in the semester shall be considered as having unofficially withdrawn.
At the end of each semester, Purdue University will review the academic transcripts of federal financial aid recipients to identify students who have no passing grades as a result of nonattendance or unofficial withdrawal. The Return of Title IV calculation will be performed (after the semester has ended and grades are available) using either the last reported date of attendance, or the midpoint of the semester as the unofficial withdrawal date. Based on these calculations, we will be required to return any unearned federal assistance, resulting in a debit or increase to the student account. Students will be notified by email of the Pending Unofficial Withdrawal review, providing they have a valid Purdue University email address. Otherwise, the student will receive notification via US mail.
Request for academic withdrawal
While there is no academic penalty associated with the W grade, there may be financial aid implications. Any student who received federal Title IV financial aid funding (e.g., Pell Grant, Direct Loans, or Loans) will have their eligibility recalculated in order to determine:
- The amount of financial aid the student is eligible to retain
- The amount of unearned financial aid that must be returned to the US Department of Education
In addition, the calculation will be based on the student’s actual separation date and not necessarily the date the student dropped or resigned all of their courses.
Determining the amount of unearned aid to be returned
The calculated percentage of the semester completed becomes the percentage of the Title IV aid that the student has earned. The total Title IV aid disbursed to the student, or that could have been disbursed to the student (i.e., disbursable aid) minus the amount of Title IV aid earned by the student yields the amount of Title IV loan and grant aid that is unearned and that must be returned (688.22(e)).
Total Title IV disbursable aid − Title IV aid earned = Title IV loan and grant to be returned
A post-withdrawal disbursement of Federal Title IV aid occurs when the amount of Title IV aid earned by the student is greater than the amount of the Title IV aid disbursed for the semester. A student eligible for a post-withdrawal disbursement will receive written notification from the university. Purdue must make the disbursement as soon as possible but no later than 45 days after the date of the school’s determination that the student withdrew. Students have the right to accept or decline, some or all, of the post-withdrawal disbursement that is being offered. Students are given 14 days from the date of the notification to respond. Students are encouraged to seriously consider whether it is beneficial to accept a post-withdrawal disbursement. If the Title IV disbursement is the result of a Federal Direct Loans, it must be repaid under the terms of the appropriate promissory note being completed or previously completed. In addition, any disbursement received from Title IV funds will reduce award eligibility for the corresponding award(s) at Purdue, or another college attended during the same award year. Any opportunity to keep loan debt at a minimum should be considered.
Distribution of R2T4 financial aid refund
Refunds returned to the US Department of Education on behalf of the student are distributed among the financial aid programs in the following order:
- Unsubsidized Federal Direct Loans
- Subsidized Federal Direct Loans
- Federal Perkins Loans
- Federal Direct Grad PLUS loans
- Federal Direct Parent PLUS loans
- Federal Pell Grants
- Iraq & Afghanistan Service Grants
- Federal Supplemental Grants
- Other Title IV aid.
Students affected by a Return of Title IV calculation will be notified on an individual basis via electronic mail and billing notification indicating the type and amount of aid returned to the US Department of Education. The Return of Title IV calculation may result in a balance due to Purdue University. Please contact the Bursar Office directly to resolve any outstanding balances.
- Please note that if the unearned institutional costs are lower than the unearned financial aid, then the student must return the difference. If the amount(s) to be returned by the student is a loan, no immediate action is required and the loan servicer will contact the student regarding repayment in accordance to the terms and conditions outlined in the promissory note. If the school is required to return any unearned aid, Purdue University will reduce or cancel the award(s), debit the student’s account, and return the unearned portion of aid to the US Department Education Opportunity Grants (FSEOG)
- Federal TEACH
of Education. This adjustment may result in a balance due. The student will become responsible for the unearned portion of aid that was charged back to the student account. Students will receive notification of this action via electronic mail from Purdue University in addition to an updated statement of account. This is a federal statutory and regulatory requirement and enforced accordingly. Furthermore, if the student account remains unpaid, Purdue University may send delinquent accounts to a collection agency. Unpaid bills that reach this stage may negatively affect a student's credit rating, and may be subject to additional fees or service charges under state finance law.
Information is subject to change without notice due to changes in federal, state, and/or institutional rules and regulations. Students must complete a FAFSA every year. Students must be making Satisfactory Academic Progress to continue to receive financial aid.
Example of a Return to Title IV Calculation
- The percentage of Title IV aid the student earned is determined by taking the number of calendar days completed in the period of enrollment and dividing by the total calendar days in the period of enrollment (excluding breaks of 5 days or more and days the student was on an approved leave of absence)
- Example: 20 completed days/100 total days = 20 percent of aid earned
- The dollar amount of Title IV aid the student earned is determined by multiplying the percentage of Title IV aid earned by the total of the Title IV aid disbursed plus the Title IV aid that could have been disbursed for the period of enrollment.
- 20 percent x ($2000 disbursed + $500 that could have disbursed) = $500 aid earned
- If this percentage is greater than 60 percent, the student earns 100 percent of the disbursed Title IV funds or aid that could have been disbursed.
- If this percentage is less than 60 percent, then the percentage earned is equal to the calculated dollar amount earned.
- Aid to be returned is equal to unearned percentage (100 percent minus the Percent earned) multiplied by the amount of aid disbursed toward institutional charges. If a student earned less aid than was disbursed, the institution is required to return a portion of the funds and the student may be required to return a portion of the funds. All Title IV fund returns must be completed no later than 45 calendar days after the date of determination that the student withdrew.
- Funds are returned to the appropriate federal program based on the percentage of aid earned and the order of return dictated by the U.S. Department of Education.
- When Title IV funds are returned, the student may owe a balance to the institution.