Aurora University

Withdrawals and Return of Title IV Funds

If a student withdraws, either officially or unofficially, before completing 60 percent of the term, and he/she has received Title IV federal funds the student may no longer be eligible for the full amount of the federal aid. Title IV (federal aid) includes: Direct Stafford Loans, Perkins Loan, Direct PLUS Loans, Pell Grant, Supplemental Educational Opportunity Grant (SEOG), and Iraq and Afghanistan Service Grant. The federal government requires schools to review the student’s eligibility for these funds through a federally mandated formula to determine how much of the federal funding was “earned” up to the time of the student’s withdrawal. The review and recalculation is called a “Return of Title IV Aid.”

The Title IV funds that were disbursed in excess of the “earned” amount must be returned to the federal government by the university and/or the student. If the student received a refund from their financial aid, which was to be used for education-related personal expenses or non-university housing expenses, he/she may be required to return a portion of those funds to Aurora University.  This portion represents funds that were intended to pay the student’s education-related expenses through the end of the term. The amount to be returned to the University will be determined by the student’s institutional costs, refunds he/she might have received for non-university expenses and the funds that must be returned to the government.

The amount of federal funds to be returned will be calculated from the date of the student’s withdrawal. There are two types of withdrawals, official and unofficial. The student’s type of withdrawal impacts this calculation and timing.

  • Official Withdrawal is when a student completes the withdrawal process. This can be achieved by submitting the Withdrawal/Leave of Absence Form to the Registrar Office or by the student dropping online all of their classes for a term. The date of official withdrawal used by Aurora University is the date that the Office of the Registrar receives the student’s written request of the student’s intention to withdraw or the date the student drops their last class in a term through the online system.
  • Unofficial Withdrawal is when a student stops attending classes, but does not withdraw from those classes or notify the university. A student in this scenario eventually will earn all grades of “F” for a term. When an instructor assigns an “F” grade they also must indicate the last date the student attended the class/participated in an “academically-related activity” (e.g. attended a class or lab, took an exam, submitted an assignment). The date of unofficial withdrawal will be the last date attended reported by the instructor. If it is impossible to establish a date that the student last participated in an “academically-related activity,” the midpoint of the term will be considered the official last date of attendance, for the purpose of returning unearned Title IV funds.

Determining Aid Earned

Aid Already Disbursed

When a student withdraws after beginning attendance in the term, Aurora University’s Office of Financial Aid will calculate the percentage of the term the student attended. This percentage is then used to determine the federal aid the student has earned. The federal calculation known as the Return of Title IV uses the following:

  • Number of days in the term
  • Number of days that the student has been enrolled for the term
  • Student’s institutional costs
  • Student’s federal funds received or eligible to receive

Once the student has been enrolled for 60 percent of the term, no more adjustments are made.

If the amount the student received (funds that were disbursed directly to his/her university student account and possibly refunded to the student) is greater than the amount the student earned, the unearned funds must be returned to the U.S. Department of Education by Aurora University. This must be done as soon as possible, but no later than 45 days from the date of determination of the student’s withdrawal. The student will be notified by Aurora University’s Office of Financial Aid as to the result of the calculation to their federal financial aid, how it impacts their Aurora University student account, and any instructions on how to proceed if he/she is required to return funds to the government.

Aid That Could Be Disbursed

A student may be eligible for a post-withdrawal disbursement if, prior to withdrawing, the student earned more federal financial aid than was disbursed. If a student is eligible for a post-withdrawal disbursement for Title IV funds, it will be processed for the student and if it results in a refund it will be issued within 14 days of the credit balance.

Aurora University may automatically use all or a portion of the post-withdrawal disbursement of grant funds for tuition, fees, room and board (if applicable), and miscellaneous charges (as authorized on Tuition/Fees Payment Agreement Form).

If the post-withdrawal disbursement includes loan funds, Aurora University must obtain the student’s permission before it can disburse the loan. Students may choose to decline some or all of the loan funds so that he/she does not incur additional debt. A notice will be sent out to the student, and a signed response or email from their AU email account must be returned to the university within 14 days.

It is also important to understand that accepting a post-withdrawal disbursement of student loan funds will increase a student’s overall student loan debt that must be repaid under the terms of the Master Promissory Note.

Returned Title IV Aid

Funds that are returned to the federal government are used to reduce the outstanding balances in individual federal programs. Financial aid returned must be allocated in the following order:

  1. Federal Direct Unsubsidized Stafford Loan
  2. Federal Direct Subsidized Stafford Loan
  3. Federal Perkins Loan
  4. Federal Direct Parent PLUS Loan
  5. Federal Direct Graduate PLUS Loan
  6. Federal Pell Grant
  7. Federal Supplemental Educational Opportunity Grant (SEOG)
  8. Iraq and Afghanistan Service Grant

This information is accurate at all Aurora University locations and subject to change without prior notice.