Withdrawals and the Return of Federal Financial Aid

Federal student aid is awarded with the expectation that the student will attend college for the entire period for which the student’s financial aid was intended. To establish eligibility for any federal financial aid payments, you must begin attending your classes. Once the student starts attending classes, the federal government requires that you “earn” your financial aid awards in direct proportion to the number of days in the semester that you do attend. If the student completely withdraws from school before completing the term, Guttman Community College must calculate, according to a federally prescribed formula- Return of Title IV (R2T4), the portion of the total scheduled financial assistance you have earned and are therefore entitled to receive up to the time you withdrew.

Withdrawing from classes can have both short-term and long-term effects on your eligibility to receive financial aid payments. For example, the student may discover after withdrawing from a class that your tuition charges remain the same, but your financial aid is reduced or eliminated. The student may also be asked to pay back money the student received in a financial aid payment because you subsequently withdrew from your classes. Then again, the student might find that he/she is not eligible to receive a payment in the current semester because he/she had too many withdrawals in past semesters. These situations can leave the student having to pay tuition bills and other school expenses out of pocket.

If a student withdraws (W, WD, WA or WU grades are assigned) during a term or session, federal regulations require the Office of Financial Aid to apply a formula established by the U.S. Department of Education to determine the amount of Federal financial aid earned as of the withdrawal date from the college. The amount of federal financial aid earned is determined by the percentage of time spent in academic attendance, and has no relationship to the institutional charges the student may have incurred. Once more than 60% of the semester has passed, the student has earned 100% of the federal financial aid awarded to him/her.

Federal Title IV funds that are considered in the R2T4 calculation include Pell Grant, SEOG, Federal Teach Grant, Perkins Loan, Direct Loan (Subsidized and Unsubsidized) and PLUS Loans (Parent PLUS and Graduate Plus).

Students who meet the following criteria are considered for R2T4 calculations:

  • Students who withdraw from one or both sessions.
  • Students who withdraw in one session and do not return for future sessions are considered R2T4.
  • Students who complete a session but totally withdraw from subsequent sessions.

Once a student withdraws, the Office of Financial Aid performs a Return of Title IV Funds (R2T4) calculation. The calculation determines the amount of Title IV Federal aid a student has ‘earned’ by dividing the number of days completed by the number of days in the term or session. The percentage completed is then multiplied by the overall title IV aid the student was eligible for had they not withdrawn. If the amount of aid ‘earned’ is less than the amount disbursed to the student’s account, funds must be returned to the US Dept. of Education. Funds will be returned to the programs from which the student received aid during the term in the following order, up to the net amount disbursed from each source:

  • Direct Unsubsidized Loan
  • Direct Subsidized Loan
  • Direct PLUS Loans (Parent PLUS and/or Graduate PLUS)
  • Federal Pell Grant
  • SEOG
  • Federal Teach Grant

**Important Note: If funds need to be returned, it may create an outstanding balance on the student’s account with Guttman Community College. The student will be responsible for any outstanding balance when funds are returned to US Dept. of Education.


Unofficial Withdrawal

If a student stops attending classes during a semester and does not officially withdraw, they will be considered an unofficial withdrawal (WU grade is assigned). At the end of each session, the Registrar’s Office will receive grade rosters where the instructor notifies the office of students who have stopped attending the course. If a student stops attending the course and did not officially withdraw from the course, then the Financial Aid Office will run the Return of Title IV (R2T4) calculation and determine how much federal financial aid will need to be returned to the US Dept. of Education. If funds need to be returned to the appropriate program, it may create an outstanding balance due to the college, which the student would be responsible to pay.

If the student decides not to attend Guttman Community College, it is your obligation to properly withdraw by notifying the Registrar’s office or meeting with your academic advisor. Non-attendance of classes does not classify as an official withdrawal, and does not relieve the student of his or her financial obligation or entitle the student to a refund.


How tuition liability and financial aid interact when a student withdraws

If a student withdraws before 100% tuition liability the charges will be reduced accordingly. This may temporarily create a credit on the student account. The Bursar will not issue a refund to the student until the Office of Financial Aid performs the Return of Title IV funds calculation to determine if any financial aid funds need to be returned. After the adjustments are made, the student will either receive a refund for any remaining credit or a bill with the balance due.

We recommend that the student speak with their professors, Student Success Advocates and/or your Career Strategist and your financial aid counselor if you are thinking of withdrawing from one course or from all your courses.