Return to Title IV Policy (R2T4)

Effective with the Fall 2000 Term, the federal government changed how federal financial aid is determined for students who withdraw from all their classes.  If a student receiving Title IV funds completely withdraws from classes through 60% of the term, the university is required to determine how much of the financial aid was earned up to the time of withdrawal.  Unearned Title IV funds must be returned by the University and/or the student to the federal government.  This situation could result in the student owing aid funds to the University, the government or both.

How will my Financial Aid be Calculated after I withdraw

The federal formula requires  return of Title IV aid if the student received federal financial assistance in the form of a Pell Grant, Supplemental Educational Opportunity Grant, Federal Perkins Loan, Federal Direct Student Loans or PLUS Loan, Teach Grants or Iraq & Afghanistan Sv. Grants and withdraws on or before 60% of the term.

 To determine the amount of aid the student has earned up to the time of withdrawal, divide the number of calendar days the student attended classes by the total number of calendar days in the term.  Scheduled breaks of more than five days or more are excluded.  The percentage derived is then multiplied by the total federal funds that were disbursed (either to the student’s account or to the student directly by check) for the term.  This calculation determines the amount of aid earned by the student, which he/she may keep (for example, if the student attended 25% of the term, the student has earned 25% of the aid disbursed).

How Do You Know If I Stop Attending

Students who wish to drop or withdraw from a course or courses must do so online through Banner Web. The date of the drop or withdrawal will be the date that the student completes the process on Banner Web. Instructors notify Enrollment Services if a student stops attending or never attended a class. For online courses, non- attendance is lack of participation in the online courses. Enrollment Services contacts the student by email informing them “we have been notified of non-attendance”.    The student has ten days to respond by either withdrawing from the course (if it is still within the withdrawal period) or by resolving the issue with the instructor.  If the student does not take any action, a “WF” or “WN” grade is issued to the student.  The last date of attendance as reported by the instructor is recorded as a requirement for Financial Aid processing of Return to Title IV.

If it has been determined that a student has unofficially withdrawn, the Return to Title IV calculations will assume 50% completed-unless otherwise documented by the student.

 When is my aid returned

The unearned amount (total aid disbursed less the earned amount) must be returned to the federal government as soon as possible but no later than 45 days from the determination of the withdrawal by the University.  A post withdrawal disbursement of funds will be made to the student if the amount disbursed to the student is less than the amount the student earned, and for which the student was otherwise eligible  he/ she is eligible to receive a post withdrawal disbursement of the earned aid that was not received.  The University will notify the student if this situation exists.

ORDER OF RETURN OF TITLE IV FUNDS

Funds that are returned to the federal government are used to reduce the outstanding balances in individual federal programs.  Financial aid returned (by the University and/or the student or parent) must be allocated in the following order: 

  1. Federal Unsubsidized Direct Loan
  2. Federal Subsidized Direct Loan
  3. Federal Perkins Loan
  4. Federal Direct Plus (Parent) Loan
  5. Federal Pell Grant
  6. Federal Supplemental Educational Opportunity Grant (FSEOG)
  7. Other Federal Loan or Grant Assistance Teach, Iraq/Afghanistan Service. Grants 

Once a determination of earned Federal aid is made, the Office of Financial Aid will notify each affected withdrawn student of eligibility. 

  • Eligibility Michigan Competitive Scholarship funds are calculated based on a formula provided by the Michigan Office of Scholarships and Grants.
  • University funds are calculated using the same percentage used in the federal calculation for Title IV funds. University funds are applied only if there is a balance owed by the student to the University.
  • Loans disbursed more than eligibility is due based on the terms and conditions outlined in the promissory note(s). Most Direct Loan borrowers will enter repayment six months after withdrawal unless they begin classes on a half-time basis (6 credits undergraduate/3 credits graduate) before the end of their six-month grace period. 

It is important to realize that a key component of satisfactory academic progress is course completion.  A total withdrawal contributes no completed credits to an academic transcript.  Absence of course completion during a term could be viewed negatively in positive progress towards degree completion.  

Questions and concerns should be directed to the One Stop Center at (248) 204-2280 or enrollmentservices@ltu.edu.  The Office of Financial Aid encourages all students to meet with their academic advisor and to take advantage of the resources offered in the Counseling and Support Services Office before withdrawing.