Skip to main content

Treatment of Title IV Aid When a Student Withdraws

The Hartnell College Financial Aid Office is required by Federal Regulation to re-calculate Financial Aid (Title IV) funds for all students who withdraw during the semester. This policy applies to students who withdraw from one, or all classes, on or after the first day of the semester.

The Title IV programs that are covered by this regulation are: Federal Pell Grants, Iraq and Afghanistan Service Grants, TEACH Grants, Direct Loans, Direct PLUS Loans, Federal Supplemental Educational Opportunity Grants (FSEOGs), and Federal Perkins Loans.

Though a students aid is posted on their account at the start of each academic year, students earn those funds as they complete each semester. If students withdraw during the semester, the amount of Financial Aid (Title IV) assistance they are entitled to keep is recalculated using a specific formula, using their last date of enrollment, to determine how much assistance students are eligible to keep. If a student received more assistance than they earned, the excess funds must be returned.

The amount of assistance a student has earned, and is eligible to keep is determined on a pro rated basis. For example, if a student completed 30% of the semester, they earned 30% of the assistance they were originally scheduled to receive. Once you have completed more than 60% of the payment period or period of enrollment, you earn all the assistance that you were scheduled to receive for that period.

If students did not receive funds and were eligible to receive aid they may have been entitled to, they may be due a post-withdrawal disbursement. This is normally the case when a students file is still being reviewed and they withdraw after the semester has started. Your school may automatically use all or a portion of your post-withdrawal disbursement of grant funds for tuition, fees, and room and board charges (as contracted with the school). The school needs your permission to use the post-withdrawal grant disbursement for all other school charges. If you do not give your permission (some schools ask for this when you enroll), you will be offered the funds. However, it may be in your best interest to allow the school to keep the funds to reduce your debt at the school.

There are some Title IV funds that you were scheduled to receive that cannot be disbursed to you once you withdraw because of other eligibility requirements. For example, if you are a first-time, first-year undergraduate student and you have not completed the first 30 days of your program before you withdraw, you will not receive any Direct Loan funds that you would have received had you remained enrolled past the 30th day.

If you receive (or your school or parent receive on your behalf) excess Title IV program funds that must be returned, your school must return a portion of the excess equal to the lesser of:

  1. your institutional charges multiplied by the unearned percentage of your funds, or
  2. the entire amount of excess funds.
*The percentage of Title IV funds (financial aid) the student has earned will be determined based on the student's withdrawal date.  This percentage is determined by (the number of days completed divided by the total days in the term) multiplied by the total Title IV (financial aid) disbursed and that could have been disbursed for the term.
Funds will be returned to Title IV programs in the following order:
  1. Unsubsidized Direct Loans
  2. Subsidized Direct Loans
  3. Federal Pell Grant
  4. Iraq and Afghanistan Service Grants
  5. Federal SEOG

The school must return this amount even if it didn’t keep this amount of your Title IV program funds.

If your school is not required to return all of the excess funds, you must return the remaining amount.

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 that you must return is called an overpayment. The maximum amount of a grant overpayment that you must repay is half of the grant funds you received or were scheduled to receive. You do not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. You must make arrangements with your school or the Department of Education to return the unearned grant funds.

The requirements for Title IV program funds when you withdraw are separate from any refund policy that your school may have. Therefore, you may still owe funds to the school to cover unpaid institutional charges. Your school may also charge you for any Title IV program funds that the school was required to return.

If you don’t already know your school’s refund policy , you should ask your school for a copy. Your school can also provide you with the requirements and procedures for officially withdrawing from school. If you have 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