How a Withdrawal Affects Financial Aid
Federal Student Aid (FSA), also known as Title IV funding, is awarded under the assumption that a student will remain in classroom attendance for the entire semester or payment period for which the funds were awarded. When withdrawing from all courses, regardless of the reason, the student may no longer be eligible for the full amount of Title IV funds originally awarded.
The return of funds to the federal government is based on the premise that financial aid is earned in proportion to the length of time during which a student remains enrolled. A pro-rated schedule determines the amount of federal aid a student has earned at the time of full withdrawal. For example, a student who withdraws in the second week of the semester has earned less of his/her financial aid than a student who withdraws in the fifth week.
Once the 60% point in the semester is reached, a student is considered to have earned all of the financial aid originally awarded and will not be required to return any funds.
Financial aid that is processed for a student who never begins attendance in any class will be canceled.
If a recipient of Title IV grants or loan funds withdraws from Illinois College (IC) after beginning attendance, the amount of Title IV grant or loan assistance earned by the student must be determined. If the amount disbursed to the student is greater than the amount the student earned, the unearned funds must be returned to the federal program. If the amount disbursed to the student is less than the amount the student earned, and for which the student is otherwise eligible, he or she may be eligible to receive a post-withdrawal disbursement of the earned aid that was not received.
Earned versus Unearned Financial Aid
If a student officially withdraws, ceases attendance, or is administratively withdrawn from Illinois College, federal regulations require post-secondary institutions to calculate the amount of Federal Title IV funds "earned" during the term from which the student withdrew.
The percent "earned" is equal to the number of calendar days completed up to the withdrawal date divided by the total number of calendar days in the semester. Breaks of 5 days or longer are not included in the count of total days in the payment period.
Earned Percent = Number of Days Completed ÷ Total Days in Enrollment Period
Unearned Percent = 100% - Earned Percent
As a result of a withdrawal, students who received federal funds will be required to repay "unearned" aid. The repayment calculation is performed utilizing the federal government's repayment worksheet.
When the total amount of the Title IV grant and/or loan assistance earned as of the withdrawal date is more than the amount that was disbursed to the student, the difference between the two amounts will be treated as a post-withdrawal disbursement.
Post-Withdrawal Disbursements of Federal Grant Funds
IC will automatically credit the student’s account with a late disbursement of Pell Grant and FSEOG funds for current institutional charges (tuition, fees, room and board). Excess funds will be refunded to the student by check. The student refund check will be mailed and the post-withdrawal disbursement will be made within 45 days of the date the College determined the student withdrew.
Post-Withdrawal Disbursements of Federal Loan Funds
If a post-withdrawal disbursement includes federal loan funds, the school must get the student, or parent if a PLUS loan, permission before it can disburse them. The borrower will be notified within 30 days of the date of determination of withdrawal of the opportunity to accept all or a part of the post-withdrawal disbursement. The student or parent has 14 days from the date of notification to respond. The College will disburse the loan funds within 180 days of the date of determination of the student's withdrawal date. Loan funds will be applied towards the outstanding semester charges on the student's account and may pay up to the amount of the allowable charges. Any remainder will be paid directly to the student or parent.
Determination of Withdrawal Date
The withdrawal process begins when the student submits a Departure from the College Form to the Office of Academic Affairs or notifies the office of his or her intent to withdraw. The withdrawal date used in the return calculation of a student's federal financial aid is the date the student began the official withdrawal process or the date of the students notification. If a student stops attending classes without notifying IC, the withdrawal date will be the midpoint of the semester or the last date of academic activity as documented by the student's professors.
When a Student Fails All Classes
If a financial aid recipient who has not officially withdrawn fails to receive a passing grade in at least one class during the term, the Office of Student Financial Services with the assistance of the Office of Academic Affairs will determine whether the student actually established eligibility for the aid originally awarded. Instructors will be contacted and asked to provide information on the student’s attendance. If the student did not begin attendance, or stopped attending during the payment period, a refund calculation will be performed.
Student Notification of Repayment
The student and the school are both responsible for returning unearned federal financial aid to the federal government. IC will return funds on the student's behalf to the appropriate federal programs and subsequently will bill the student's Illinois College account. A statement reflecting these charges will be sent to the student. The student is responsible for all charges resulting from a Return of Title IV calculation. When the student owes funds to Illinois College due to federal aid being returned, the student should contact the Office of Student Financial Services to make arrangements to pay the balance.
Additional Loan Information to Consider When Withdrawing
Anytime a student is enrolled less than half-time, their six-month grace period begins. The student’s grace period for loan repayment for Federal Direct Subsidized and Unsubsidized Loans will begin on the day of the withdrawal from the school. If the student is not enrolled at least half-time for more than 6 months, the loans will go into repayment. The student must complete Exit Loan Counseling at studentloans.gov and contact their servicer to make payment arrangements. Loans must be repaid by the loan borrower (student/parent) as outlined in the terms of the borrower’s promissory note. The student should contact the servicer if they have questions regarding their grace period or repayment status.
Consequences of Non-Repayment
Students who owe the US Department of Education for an overpayment of Title IV funds are not eligible for any additional federal financial aid until the overpayment is paid in full or payment arrangements are made with the US Department of Education.
Students who owe Illinois College because of an R2T4 calculation will be placed on a financial hold. They will not be allowed to register for subsequent semesters or receive academic transcripts until the balance is paid.
How a Withdrawal Affects Future Financial Aid Eligibility
Refer to the Satisfactory Academic Progress Policy in the Illinois College Handbook to determine how a withdrawal impacts aid eligibility.
Illinois College Tuition Refund Policy
Refunds of tuition for on-campus students are made upon the following basis if withdrawal has been approved by the Dean of the College and the Vice President for Business Affairs:
On or before the first day of class
Weeks 1 and 2
Weeks 3 and 4
Weeks 5 and 6
After week 6
Board will be pro-rated based on the official date of withdrawal. Room rent is non-refundable. Fees are non-refundable.
Illinois College grants and scholarships will be prorated to be proportional to the percentage of tuition charges incurred. For example, if a student's tuition charges are reduced by fifty percent then the student's IC grants and scholarships will also is reduced by fifty percent.