Effective with the Fall 2000 Term, the federal government changed how federal financial aid is determined for students who withdraw from all their classes.  If a student receiving Title Iv funds completely withdraws from classes through 60% of the term, the university is required to determine how much of the financial aid was earned up to the time of withdrawal.  The University and/or the student must return unearned Title IV funds to the federal government.  This situation could result in the student owing aid funds to the University, the government or both.

The federal formula requires a return of Title IV aid if the student received federal financial assistance in the form of a Pell Grant, Supplemental Educational Opportunity Grant, Federal Perkins Loan, Federal Stafford Student Loans or PLUS Loan and withdrew on or before 60% of the term.  To determine the amount of aid the student has earned up to the time of withdrawal, divide the number of calendar days the student attended classes by the total number of calendar days in the term.  Scheduled breaks of more than five days or more are excluded.  The percentage derived is then multiplied by the total federal funds that were disbursed (either to the student’s account or to the student directly by check) for the term.  This calculation determines the amount of aid earned by the student, which he/she may keep (for example, if the student attended 25% of the term, the student has earned 25% of the aid disbursed).  The unearned amount  (total aid disbursed less the earned amount) must be returned to the federal government by the university or the student.

If it has been determined that a student has unofficially withdrawn, the Return to Title IV calculations will assume 50% completed-unless otherwise documented by the student.

ORDER OF RETURN OF TITLE IV FUNDS

Funds that are returned to the federal government are used to reduce the outstanding balances in individual federal programs.  Financial aid returned (by the University and/or the student or parent) must be allocated in the following order:

  1. Federal Unsubsidized Stafford Loan
  2. Federal Subsidized StaffordLoan
  3. Federal Perkins Loan
  4. Federal Plus (Parent) Loan
  5. Federal Pell Grant
  6. ACG Academic Achievement Grant
  7. National Smart Grant
  8. Federal Supplemental Educational Opportunity Grant
  9. Other Federal/State Loan or Grant Assistance

Once a determination of earned Federal Aid is determined, the Office of Financial Aid will notify each effected withdrawn student of eligibility.

  • Eligibility Michigan Competitive Scholarship funds are calculated based on a formula provided by the Michigan Office of Scholarships and Grants.
  • University funds are calculated using the same percentage used in the federal calculation for Title IV funds.  University funds are applied only if there is a balance owed by the student to the University (with the exception of the LTU Recovery Grant which will  be removed from your account).
  • Loans disbursed in excess of eligibility are due based on the terms and conditions outlined in the promissory note(s).  Most Stafford Loan borrowers will enter repayment six months after withdrawal unless they begin classes on a half-time basis (6 credits undergraduate/3 credits graduate) before the end of their six-month grace period.

It is important to realize that a key component of satisfactory academic progress is course completion.   A total withdrawal contributes no completed credits to an academic transcript.  Absence of course completion during a term could be viewed negatively in positive progress towards degree completion. 

Questions and concerns should be directed to the One Stop Center at (248) 204-2280 or enrollmentservices@ltu.edu.  The Office of Financial Aid encourages all students to meet their academic advisor and to take advantage of the resources offered in the Counseling and Support Services Office.