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Effect of Withdrawal on Eligibility

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/she received financial aid, the University will determine the amount, if any, of the student’s financial aid award that must be returned based on a federally mandated refund formula and SC State requirements (if state aid received).

How a withdrawal affects financial aid?

Federal regulations require Title IV financial aid funds to be awarded under the assumption that a student will attend the institution for the entire period in which federal assistance was awarded. When a student withdraws from all courses for any reason, including medical withdrawals, he/she may no longer be eligible for the full amount of Title IV funds that he/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 Palmetto College Campuses of the University of South Carolina recalculate Federal financial aid eligibility for students who withdraw from the University prior to completing 60% 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 halftime enrollment status you are required to complete an Exit Interview prior to withdrawing or ceasing at least halftime enrollment for each type of federal student loan you received.  The Exit Counseling interview process is available at http://www.nslds.ed.gov/nslds_SA/.

Types of Withdrawals

For financial aid purposes, there are two types of withdrawals:  Official and Unofficial

  •  Official withdrawal from the University by the student.  Please review the current academic year bulletin and contact your academic advisor.
  • 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.

How the unearned aid is calculated?

The unearned federal aid is returned to the Federal government based on the following formula: 100% - (minus) percent of aid earned x (times) 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 Bursar's 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 Perkins Loan, 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 you is less than the amount you earned, we will notify you of your eligibility and give you the opportunity to receive that aid. If the amount disbursed to you is greater than the amount you 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 Perkins Loans
  • Federal PLUS Loans
  • Federal Pell Grant
  • Federal Supplemental Educational Opportunity Grant (FSEOG)
  • SC State Aid/Resources 

What is the 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

 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.

When a 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 program.