Financial Aid for Undergraduate Students
Withdrawal Implications for Recipients of Financial Aid
During the Drop/Add Period
During the university’s published drop/add period, students who drop or reduce their enrollment may be eligible for a 100 percent refund of tuition for classes dropped.
Financial aid recipients must immediately notify the Financial Aid Office in writing when a drop from one or more classes during the drop/add period results in an enrollment status different from the enrollment status on which their current financial aid eligibility was based. The same applies if one or more classes are cancelled.
The Financial Aid Office will review the student’s new enrollment and, if appropriate, revise the student’s eligibility based on the new enrollment status.
If a financial aid recipient drops from all classes or drops to less than half-time status during the drop/add period, all financial aid awards must be returned to their respective programs. Students who drop from all classes or drop to less than half-time status during the drop/add period are considered never to have established eligibility for financial aid. If the student was given financial aid funds for other expenses, he or she will be expected to return those funds to the university.
After the Drop/Add Period
Students who are recipients of Title IV federal student aid are also covered by federal Return of Title IV Funds (R2T4) regulations. Title IV federal student aid is awarded to a student under the assumption that the student will attend for the entire period for which the assistance is provided and thereby “earn” the award. When a student ceases academic attendance prior to the end of that period, the student may no longer be eligible for the full amount of federal funds that the student was originally scheduled to receive.
If a Title IV recipient withdraws from all classes on or before the session is 60 percent complete, based on their last date of attendance, federal policy requires that any “unearned” Title IV federal student aid be returned to the U.S. Treasury, even if the student is not entitled to a refund of tuition.
A student is required to immediately notify the Registrar when he or she stops attending classes. If the student fails to notify the Registrar’s Office, it is possible that the 50 percent point in the term will be used to determine the student’s last date of attendance, in accordance with federal regulations. If a student withdraws from all classes*, the Financial Aid Office will determine if that student’s period of attendance resulted in the earning of all federal student aid awarded for that term. If it is determined that not all the scheduled federal aid has in fact been earned, then the Financial Aid Office will calculate the amount to be returned to the federal student aid programs. The Financial Aid Office will bill the student via his or her university account for the amount to be returned. It is the student’s responsibility to contact the Cashier’s Office to settle the bill.
Additional Responsibilities of Students Who Withdraw
Any time a student withdraws from one or more courses, the student should consider the potential effect on his or her Satisfactory Academic Progress (SAP) status. See here for more information about SAP requirements.
Whenever a student’s enrollment drops to less than half time or the student withdraws completely, or if a student takes a leave of absence, he or she must notify the lender, holder or servicer of any loans. Student borrowers of federal or university loans must also satisfy exit loan counseling requirements at studentloans.gov.
It is also the student’s responsibility upon withdrawal from all classes to notify the Student Financial Services Office, the Housing Services Office, the Transportation Services Office and/or the USCard Office, if the student has charges from these offices on his or her student account. Students who have withdrawn from studies may be entitled to a prorated cancellation of charges from these offices.
Leave of Absence
Financial aid recipients considering a leave of absence should be aware of the financial aid implications. Although obtaining an approved leave of absence from their programs does allow students to re-enroll in the university without formal re-admission, it does not allow them to defer their loan repayment. The university reports student enrollment to the National Student Clearinghouse throughout the academic year. Lenders and federal loan service agencies subsequently query this database to determine if a student has maintained continuous half-time or greater enrollment.
Student Loan Repayment
If students are on a leave of absence from the university, their lender or federal loan service agency will move their loan from an “in-school” status to a grace or repayment status as required. While on a leave of absence, students may be able to postpone repayment by obtaining a deferment or forbearance from their loan servicer(s) as a result of unemployment or economic hardship. Students should contact their loan servicer(s) for more information about loan repayment. Students may review their federal loan history and determine their loan service agencies by visiting the National Student Loan Data System Website at nslds.ed.gov. Once they re-enroll on a half-time or greater basis, they may be able to request deferment for “in-school” status.
Tuition Refund Insurance Plan
To complement its own refund policy, the university makes available to students Tuition Refund Insurance, an insurance policy designed to protect the investment students and their families make in education. The Financial Aid Office strongly encourages all financial aid recipients to take advantage of this plan. If a student formally withdraws from all classes after the end of the drop/add period and he or she is covered by Tuition Refund Insurance, the student may receive:
- A credit to his or her student account equal to 100 percent of charges for tuition and mandatory fees, if the withdrawal is the result of documented personal illness or accident; or
- A credit to his or her student account equal to 60 percent of the charges for tuition and mandatory fees, if the withdrawal is the result of a documented mental/nervous disorder.
The Tuition Refund Insurance credit will be applied first to any outstanding charges on the student’s university account, including any charges resulting from the return of Title IV federal student aid. Recipients of university and/or federal financial aid will then receive a cash refund equal to the amount of cash payments made to the account plus any loan payments still on the account (after all returns of Title IV aid have been made in accordance with federal policies, if applicable). The remainder of the insurance credit will be used to repay university financial aid grant or scholarship programs.
Brochures about Tuition Refund Insurance requirements and claim forms are available in the Cashier’s Office and the Registrar’s Office. All questions about the insurance plan should be directed to these offices.
Notes on Federal Policy
Title IV Federal Student Aid
Students are considered recipients of Title IV federal student aid if they have received funds from one or more of the following programs to meet educational expenses for the semester in question: Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (SEOG), Federal Perkins Loans, Federal Direct Stafford Loans (Subsidized or Unsubsidized), or Federal Direct Graduate or Parent PLUS Loans.
Period of Enrollment
At USC, the periods of enrollment are generally measured using the session(s) in which the student enrolled on a semester basis, starting on the first day of classes and ending on the final day of examinations for a given term. For purposes of Title IV federal student aid, any scheduled break of five or more days will not be included in the measurement of the enrollment period. For programs offered in modules (sessions that do not span the entire length of the semester), breaks of more than five days between modules will not be included in the measurement of the enrollment period.
Measurement of Earned Title IV Federal Student Aid
When a student withdraws from all classes or withdraws from one or more classes while attending a modular program, the Financial Aid Office will calculate the percentage of earned Title IV federal student aid using the date of withdrawal. The earnings calculation is based on the number of days of enrollment, up to and including the day of withdrawal, divided by the total number of days in the enrollment period. In most cases, when a total withdrawal is determined to occur on or before the 60 percent point in a semester, some federal aid will need to be returned.
Return of Title IV Federal Student Aid
To satisfy federal regulation, returns to Title IV financial aid programs must be made in the following order:
- Federal Direct Unsubsidized Stafford Loans
- Federal Direct Subsidized Stafford Loans
- Federal Perkins Loans
- Federal Direct PLUS Loans
- Federal Pell Grants
- Federal Supplemental Educational Opportunity Grants (SEOG)
- Other Title IV federal programs