Executive Council

Authorizes Release:

Chief of Staff for the President

Responsible Area:

Financial Aid

Review Cycle:

Annually or as required

Last Review:

October 2017

Related Policies and Additional References:


We understand that your circumstances may change. If you find it necessary to reduce your course load during a semester due to personal, financial or academic reasons, please let us know. We can determine what implications this might have on your financial assistance

The federal government mandates that students who withdraw from all classes may only keep the financial aid they have “earned” up to the time of withdrawal. Title IV funds that were disbursed in excess of the earned amount must be returned by the University and/or the student to the federal government.

If a student withdraws, drops out or is dismissed on or before the 60 percent point in time of the period of enrollment, which is calculated using calendar days, a portion of the Title IV Federal Funds awarded (Pell Grant, FSEOG, Perkins Loan, federal Stafford Loans – subsidized and unsubsidized – and federal PLUS loans) must be returned, according to the Federal Formula for Return of Title IV funds.  This situation could result in the student owing aid funds to the University, government or both.

To determine the amount of aid the student has earned up to the time of withdrawal, the Office of Financial Assistance will divide the number of calendar days the student attended classes by the total number of calendar days in the semester (less any scheduled breaks of 5 days or more). The resulting percentage is then multiplied by the total federal funds that were disbursed (either to the student’s university account or to the student directly by check or direct deposit) for the semester. This calculation determines the amount of aid earned by the student which he or she may keep (e.g., if the student attended 25% of the term, the student will have 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. The Office of Financial Assistance will notify and provide instructions to students who are required to return funds to the government. This calculation must be completed within 45 days of the withdrawal, drop out or dismissal.

Return of Title IV Funds (R2T4)

Financial aid is awarded to a student under the assumption that the student will attend school for the entire period for which the financial assistance is awarded. The federal government mandates that students who withdraw or fail to complete all classes (unofficial withdrawal) within a term may only keep the financial aid they have “earned” up to the time of withdrawal. Any unearned aid must be returned regardless if it has already been disbursed.

This is called Return of Title IV Funds or R2T4. It can result in the student owing aid funds to the University, government, or both. Title IV funds include federal programs such as the Pell Grant, the Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Perkins Loan, Federal Direct Stafford Loans (both subsidized and unsubsidized loans), Parent Plus Loan for Undergraduates and the Graduate Plus Loan.

The higher number of class days completed, the lower the amount of financial aid that must be returned. Once a student has completed more than 60% of the semester, the student is allowed to keep 100% of aid even if a withdrawal occurs after that point. If you are considering withdrawing it is encouraged to speak with our office so we can advise and provide you the best information possible prior to withdrawing.

St. Mary’s University (StMU) is required to return a portion of federal aid if a student withdraws on or before completing 60% of the semester. StMU will return funds on behalf of the students to the appropriate federal aid program, which may cause the student to incur a balance. Students are required to repay any balance owed to StMU before transcripts or diplomas will be released or before students can register for an upcoming semester. Any federal loan amount owed by the student is to be repaid under the terms of the promissory note.

If the amount disbursed to you was less than the amount you earned, you may be eligible to receive a post-withdrawal disbursement of the earned aid that was not received. You will be notified by the financial aid office if you are eligible for this disbursement.

Funds will be returned in the following order per federal regulations:

  • Unsubsidized Federal Direct Stafford Loan
  • Subsidized Federal Direct Stafford Loan
  • Grad Plus Loan
  • Federal Plus Loan
  • Federal Pell Grant
  • Federal Supplemental Education Opportunity Grant

Example of a Federal R2T4 Calculation

A student withdraws on the 30th day of class of a 114 day semester. The total institutional charges (tuition, fees, housing, meals, etc) equals $3,750. The student was awarded and received the following federal aid:

  • Pell Grant $2155
  • FSEOG $675
  • Unsub $2500
  • Sub $2750
  • Perkins $1200

Per the R2T4 policy, the student “earned” 30/114 or 26.3% (30 days completed of 114 days of the semester) of the federal financial aid requiring the remainder of the “unearned” aid to be returned to the federal aid programs. Under the policy, $2440.60 would be returned to the Unsubsidized Direct Stafford Loan program.

How am I notified if I owe a balance due to R2T4?

The Office of Financial Assistance will notify you regarding a balance due to R2T4 via email and sending a letter to your mailing address that you have on file. Any account balance will also appear on Gateway. You are responsible for maintaining an updated address, phone number, and email address with the Registrar.

Does withdrawing affect Satisfactory Academic Progress (SAP)?

Yes, withdrawing may have an effect on your SAP. Please review our eligibility requirements for maintaining SAP for subsequent semesters.

If I withdraw what happens to future semesters of aid?

If you withdraw or stop attending in the fall term, we will cancel the spring disbursements of your loans and any grants you were receiving. If you plan to return in the spring you will need to a Financial Aid Change Request Form to request our office to reinstate your semester’s awards. If you withdraw in the spring you will need to submit a Summer Application to be awarded summer aid.

If you have had a Federal Loan as part of your financial aid, either this year or in previous years, you are required to complete Loan Exit Counseling any time you fall below half-time enrollment. If you have taken out loans for the semester in which you withdrew, these loans will still count towards your aggregate limit.

Back to top