Title IV Funds Return

Withdrawal Process

The Registrar’s Office (Belbas Center 206) must be notified if a student decides to withdraw from all courses at the University.  The notification may be in writing, by phone, by e-mail, or in person. The student’s withdrawal date is the date the student began the withdrawal process or officially notified USD of intent to withdraw by contacting the Registrar’s Office.  For students who fail to officially withdraw, the institution may administratively withdraw the student.  The withdraw date for an administrative withdrawal will be determined at the University’s option to be 1) the midpoint of the enrollment period, or 2) the last documented date of attendance at an academically related event, or 3) the date an event occurred which prevented the student from officially withdrawing from the institution.  Such events include illness, grievous personal loss, or other such circumstances beyond the student’s control.  To be considered ‘withdrawn’ a student must have ceased enrollment in all classes at all SD Regental Universities.  If a student reduces their course load from 12 to 9 hours for example, the reduction represents an enrollment change, not a withdrawal.

Withdrawal Application (myUSD login required)

Refund Policy

Refunds for room and board are based on the percent of the enrollment period remaining after the date of withdrawal.  No refunds will be issued after 60% of the enrollment period has been completed.

Students with withdraw, drop out, or are expelled from the University within the drop/add period receive 100% refund of tuition and related fees.

Students who withdraw, drop out, or are expelled from the University after the 60% point of the enrollment period will receive no refund.

Students who withdraw, drop out, or are expelled from the University after the drop/add period and before 60% of the enrollment period has been completed may be entitled to a refund as identified below:

Students Who Do Not Receive Federal Title IV Financial Aid

The refund shall be determined by computing the percentage of the enrollment period remaining after the date of withdrawal times the tuition and fees originally assessed the student.  At no time will refunds be awarded after the 60% point of the enrollment period.

Students Who Receive Federal Title IV Financial Aid (R2T4 Policy)

General Information

The US Department of Education requires institutions to apply the Return to Title IV Funds policy for students withdrawing from a University who receive Title IV financial aid.  The Title IV programs include: Federal Pell Grants, Iraq and Afghanistan Service Grants, TEACH Grants, Direct Loans, Direct Plus Loans, Federal Supplemental Educational Opportunity Grants (FSEOGs), and Federal Perkins Loans.

The requirements for Title IV program funds when you withdraw are separate from any refund policy that the school may have.  Therefore, you may still owe funds to the school to cover unpaid institutional charges.  USD will charge the student for any Title IV program funds that USD was required to return.

A student who withdraws after the 60% point of a semester is entitled to retain all Title IV aid for that semester.  However, if the student withdraws prior to the 60% point of the term, unearned Title IV funds as determined by the federal policy must be returned to the various programs.  These funds must be returned even if the University provides no refund to the student.  This means the student could owe the University and/or the U.S. Department of Education a significant amount of money.

Post Withdrawal Disbursement

If the student did not receive all of the funds that were earned prior to withdrawing, a post-withdrawal disbursement may be due.  If the student is eligible for a post withdrawal disbursement of a grant, it must be disbursed within 45 days. If the post-withdrawal disbursement includes loan funds, the student must give permission before the funds can be disbursed.  Students will be notified within 30 days of the date of the withdrawal determination of any direct loan eligibility, or a parent for a Direct Parent PLUS loan eligibility.  The student and/or parent have 14 days to respond to this notification. If the student or parent does not respond to this notification within that time frame, the school is not required to make the post-withdrawal disbursement. USD may automatically use all or a portion of the post-withdrawal disbursement of grant funds for tuition, fees, and room and board charges.  Permission is required to use the post-withdrawal grant disbursement for all other school charges.  If a post withdrawal disbursement from a loan results in a credit balance, the credit balance will be refunded to the student and/or the parent in the case of a Direct Parent PLUS loan as soon as possible, but no later than 14 days after the credit balance has occurred.  The school must return the Title IV funds within 45 days of the date the school determines the student withdrew.

Documenting Attendance

Before processing a Return to Title IV Funds, the University must verify the student began attendance in all classes used to determine financial aid eligibility.  The University will contact all instructors to verify class attendance.  If a faculty member indicates that a student never attended, the University will first adjust the disbursed aid if there is a resulting change in eligibility and then calculate the Return of Title IV Funds.  As a result, the student may end up owing the institution for the amount of unearned aid.  If the student never attended any classes, all aid will be cancelled and the student billed for all outstanding charges.

Determining Earned Aid

Though your aid is posted to your account at the start of each semester, you earn the funds as you complete the semester.  Title IV financial aid is earned by the calendar day, not class day.  This includes weekends, holidays, and breaks of less than five consecutive days.  The University is required to determine the amount of Title IV aid the withdrawing student has earned and then either disburse any additional funds the student may be entitled to up to the amount earned, or return funds in excess of the amount earned which the student has already received.

If you withdraw during your enrollment period, the amount of Title IV program assistance that you have earned up to that point is determined by a specific formula.  If you received (or your school or parent received on your behalf) less assistance than the amount that you earned, you may be able to receive those funds.  If you received more assistance than you earned, the excess funds must be returned by USD.

When a student receiving Federal Title IV financial aid withdraws from USD during the enrollment period, the amount of the Title IV funds (not including Federal Work Study) that the student earned during the enrollment period is calculated as of the student's withdrawal date.

Title IV funds are earned at a fixed rate on a per day basis up to the 60 percent point in the enrollment period. Title IV funds are 100 percent earned if the withdrawal date is after the 60 percent point in that period.

If the date a student withdraws from USD is prior to or on the 60% point of the semester, USD is required to determine the portion of the aid disbursed that was "earned" by the student before the withdrawal date. The "unearned" Title IV funds must be returned to the respective federal aid programs. Unearned aid is the amount of disbursed Title IV aid that exceeds the amount of Title IV aid earned based on attendance in the enrollment period.

For example:  If $1000 in federal aid is disbursed, and the student withdraws at the 30% point of the term, $700 of the aid is unearned and needs to be returned to the identified aid program.

The following formula is used to determine the percentage of unearned aid that has to be returned to the federal government:

  • The percent earned is equal to the number of calendar days completed up to the withdrawal date, divided by the total calendar days in the payment period (less any scheduled breaks that are at least 5 days long)
  • The payment period is the entire semester. For students enrolled in modules (courses which are not scheduled for the entire semester or term), the payment period only includes those days for the modules(s) in which the student is registered.
  • The percent unearned is equal to 100% minus the percent earned.

Order of Aid to be Returned

In accordance with federal regulations and USD policy, if you are eligible for a refund of tuition and fees and housing/meal plan costs, and you are a Title IV aid recipient for the enrollment period, the refund will be returned to the student aid programs. Returned Title IV Funds are allocated in the following order:

  • Direct Unsubsidized Loans
  • Direct Loans (subsidized)
  • Direct PLUS Loans (Graduate student)
  • Direct PLUS Loans (Parent)
  • Federal Pell Grants
  • Iraq and Afghanistan Service Grant
  • Federal SEOG
  • TEACH Grant
  • Other Federal Sources of aid
  • Other State, Private and Institutional Aid

Grant Overpayment

Any amount of unearned grant funds that the student must return is called an overpayment. The maximum amount of a grant overpayment the student must repay is half the grant funds that were received or scheduled to receive.  The student does not have to repay a grant overpayment if the original amount of the overpayment is $50 or less.  Arrangements must be made with USD or the Department of Education to return the unearned grant funds. The student will be notified of any grant overpayment within 30 days of the date the school determined the student withdrew.

Notification to student

Once the Return to Title IV Funds calculation has occurred, the Financial Aid Office will notify the student of the results of the calculation and the aid that was returned. The Business Office will notify the student of any outstanding balance now due to the institution as a result.

Credit balances when a student withdrawals

The school must determine the correct Title IV credit balance, taking into account the results from both the Return to Title IV calculation and the institutional refund calculation. If after the Return to Title IV funds and the institutional refund calculations are applied to the student’s account and a credit balance results, the credit balance will be disbursed as soon as possible but no later than 14 days after the date of the Return to Title IV calculation is performed.

Unofficial withdrawals

Title IV aid recipients who fail to withdraw but stop attending class are considered unofficial withdraws.  The Return of Title IV Funds policy requires USD to calculate the "earned" amount based on the last day of attendance of the semester. If the student stopped attending prior to the 60% point of the term, the student will be billed for the outstanding charges as a result of the Return of Title IV funds. Unofficial withdrawals are processed within 30 days of determining the student was an unofficial withdrawal.