Return of Title IV Financial Aid Policy
Return of Title IV Financial Aid Policy
If a student receiving Title IV funds ceases to be enrolled in a term, the federal government mandates that WGU must determine the amount of Title IV program assistance that the student earned as of the date enrollment ceased (withdrawal date). The Title IV programs that are covered by this law are: Federal Pell Grants, Iraq Afghanistan Service Grants, Academic Competitiveness Grants, National SMART grants, TEACH grants, Stafford Loans, and PLUS Loans. When a student withdraws during a payment period or period of enrollment the amount of Title IV program assistance that the student has earned up to that point is determined by a specific formula. If the student received (or WGU or the student’s parent) less assistance than the amount the student earned, the student may be able to receive those additional funds. If the student received more assistance than was earned, the excess funds must be returned by the school and/or the student. Ceasing enrollment in a term may result in the student owing aid funds to the university, the government, or both.
Determining the Date Enrollment Ceased (Withdrawal Date)
Withdrawal dates are determined in two ways, either through student-initiated withdrawal (official) or through WGU administrative withdrawal (unofficial). Student-initiated withdrawal occurs when the student notifies WGU of the intent to withdraw. Administrative withdrawal occurs when WGU determines that the student is no longer enrolled based on a variety of reasons such as a student's lack of academic activity, failure to establish academic activity verification at the beginning of a new term, or failure to pay tuition.
Student-initiated Withdrawal Date: The withdrawal date is the date the student notified WGU of the intent to withdraw.
Administrative Withdrawal Date: The withdrawal date is the last date of student academic activity or 50% completion of the term, whichever date is later.
Calculation for the Return of Title IV Aid
The amount of assistance that a student has earned is determined on a prorata basis. Once a student has completed more than 60% of the payment period or period of enrollment, the student has earned all the assistance that was scheduled for that period.
Earned Aid: The percentage of earned aid is calculated by determining the number of calendar days from the first day of the term up through the withdrawal date and then dividing that number by the total calendar days in the term.
Unearned Aid: The amount of unearned Title IV funds that must be returned is calculated, first, by subtracting the earned Title IV percentage from 100% to determine the percentage of aid that is unearned and, second, by multiplying the total amount of financial aid that could be disbursed to the student by the unearned Title IV funds percentage.
If a student does not receive all of the funds that have been earned, per Return of Title IV calculation, the student may be due a Post-withdrawal disbursement. If the Post-withdrawal disbursement includes loan funds, WGU must get the student’s permission before WGU can disburse them. The student may choose to decline some or all of the loan funds so that the student doesn’t incur additional debt. WGU may automatically use all or a portion of your Post-withdrawal disbursement of grant funds for tuition and fees. WGU needs the student’s permission to use the Post-withdrawal grant disbursement for all other school charges. If the student does not give permission, the student will be offered the funds. However, it may be in the student’s best interest to allow WGU to keep the funds to reduce the student’s debt at WGU.
Amount to Be Returned by the Student
At the point a student receiving Title IV funds withdraws or is administratively withdrawn, the Financial Aid Office completes the return of Title IV aid calculation and determines the student's portion of the funds to be returned. WGU must return this amount even if it didn’t keep this amount of the student’s Title IV program funds. The Financial Aid Office notifies the student of the amount to be refunded to the federal government. If WGU is not required to return all of the excess funds, the student must return the remaining amount. Any loan funds that the student must return, the student will repay in accordance with the terms of the promissory note.
Any amount of unearned grant funds that the student must return is called an overpayment. The maximum amount of a grant overpayment a student must repay is half of the grant funds the student received or was scheduled to receive. The student does not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. The student must make arrangements with WGU or the Department of Education to return the unearned grant funds.
The requirements for Title IV program funds when a student withdraws are separate from any refund policy that WGU may have. Therefore, the student may still owe funds to WGU to cover unpaid institutional charges. WGU may also charge the student for any Title IV program funds WGU was required to return. WGU can provide to the student the requirements and procedures for officially withdrawing from WGU.
Students whose circumstances require that they withdraw from a term are encouraged to contact the Financial Aid Office before doing so. Financial aid staff can explain the consequences of withdrawing from a term. They can provide refund examples and further explain the policy.