Students, please be advised that if you withdraw or drop from classes, it will affect your eligibility for financial aid grants and loans. You will be required to return/repay the dollar amount calculated as unearned aid.
If a student completely withdraws during a period of enrollment for which he or she received financial aid, the university will determine the amount, if any, of the student’s financial aid that must be returned based on a federally mandated refund formula and SC State requirements (if state aid received).
How Does a Withdrawal Affects Financial Aid?
Federal regulations require Title IV financial aid funds to be offered under the assumption that a student will attend the institution for the entire period in which federal assistance was offered. When a student withdraws from all courses for any reason, including medical withdrawals, he or she may no longer be eligible for the full amount of Title IV funds that he or she was originally scheduled to receive. The return of funds is based upon the premise that students earn their financial aid in proportion to the amount of time in which they are enrolled.
The Higher Education Amendments of 1998, Public Law 105-244, requires colleges to determine how much aid must be returned (repaid) using the Return of Title IV Funds calculation. The University of South Carolina Palmetto College campuses recalculates Federal financial aid eligibility for students who withdraw from the university prior to completing 60 percent of the term in accordance with the Return of Title IV Federal Funds regulations. The recalculation is based on the percent of earned aid for the term. The percent earned is determined by the number of calendar days completed divided by the number of calendar days in the term.
If you are withdrawing from school or otherwise ceasing at least half time enrollment status and you have received Direct Loans, you are required to complete Exit Counseling prior to withdrawing or ceasing at least half time enrollment for each type of federal student loan you received. The Exit Counseling process is available at https://studentaid.gov/exit-counseling/.
Types of Withdrawals
For financial aid purposes, there are two types of withdrawals: official and unofficial.
If a student no longer plans to attend, they are encouraged to officially withdrawal by contacting their academic advisor and the Records Office. Please review the current academic year bulletin for more information.
An unofficial withdrawal occurs when the student doesn’t complete the official withdrawal process, but simply stops attending their classes. The student will earn an “F”, “W”, or WF” in all of their courses for the term in question. Unofficially withdrawing will have a negative impact on your future eligibility for federal and state financial aid. Please be sure to officially withdraw if you plan to stop attending.
How Is Unearned Aid Calculated?
Unearned federal aid is returned based on the following formula: 100 percent minus percent of aid earned multiplied by the amount of aid disbursed toward institutional charges. When Federal aid is unearned, students may owe an additional debit balance beyond what has been captured during the refund process. If an additional debit balance is owed, students will be billed by the Business Office. Additionally, a student may need to repay Title IV funds that they receive over direct costs. If so, another invoice along with an Agreement to Repay will be mailed, and students will be given approximately 10 days to respond. Students may either pay the balance in full or make payment arrangements. Should students fail to respond, repay, or enter into an agreement to repay, the amount owed will be referred to the Department of Education for collection.
Federal financial aid includes Federal Pell Grant, Federal Supplemental Education Opportunity Grant, Federal Direct Loans, and Federal PLUS Loans.
The student's withdrawal date is defined as:
- The actual date the student began the withdrawal process; or,
- The student's last date of recorded attendance; or,
- The midpoint of the semester for a student who leaves without notifying the university; or,
- The student’s last date of attendance based on documented academically related activity.
The institutional refund policy will be applied to all other non-federal aid received by the student unless instructed to do otherwise by the donor or sponsor of the funds.
How Will Aid Be Returned?
If the amount disbursed to the student is less than the amount he or she earned, the Financial Aid Office will notify the student of their eligibility and give him or her the opportunity to receive that aid. If the amount disbursed to the student is greater than the amount he or she earned, then unearned funds must be returned.
Aid will be returned in the following order (as required under regulation):
- Unsubsidized Direct Stafford Loans
- Subsidized Direct Stafford Loans
- Federal PLUS Loans
- Federal Pell Grant
- Federal Supplemental Educational Opportunity Grant (FSEOG)
- SC State Aid/Resources
Repayment Process
Students who owe a repayment are encouraged to immediately pay the amount in full to the campus Business Office. The Business Office will credit the funds to the appropriate account. However, if the student is unable to repay the amount in full, they may sign a repayment contract. The contract will allow the student to repay in monthly installments.
Post-Withdrawal Payment
A post-withdrawal calculation is performed to determine the portion of earned aid that the student was entitled to prior to withdrawing. Any outstanding institutional charges will be deducted from the post-withdrawal disbursement. Any remaining balance will first be used to repay any outstanding university charges and any subsequent balances will be refunded to the student/parent as soon as possible but no later than 14 days after the calculation.
An unofficial withdrawal occurs when the student doesn’t complete the official withdrawal process, but stops attending – indicated by the receipt of all “F” failing grades or a combination of “W” withdrawals and “F” failing, in all courses for the term in question.
Student Fails to Begin Attendance
If a student receives financial aid, but never attends classes, the Financial Aid Office must return all disbursed funds to the respective federal, state and institutional aid programs.