Return of Financial Aid Policy
According to federal regulations, the Office of Financial Aid must recalculate a student's eligibility for Federal financial aid (also known as Title IV) when they drop or withdraw from all classes, are dismissed, or take a leave of absence prior to completing more than 60 percent of a quarter/semester. Federal financial aid and all other aid are considered to be fully earned for a term after a student completes at least 60 percent. Withdrawal date is defined as the actual date the student began the institution's withdrawal process, the student's last date of recorded attendance, or the midpoint of the quarter/semester for a student who leaves without notifying the institution. The Federal financial aid programs covered under this policy include Federal Pell Grant, Federal SEOG, Federal Perkins Loan, Federal Direct Loan, and Federal PLUS Loan (Graduate Student or Parent).
Federal Title IV financial aid is returned to the federal government (reducing student loan debt) based on the percent of unearned aid using the following formula:
Aid to be returned = (100% - percent earned) x the amount of aid disbursed toward institutional charges.
If a student does stop enrollment, no additional disbursements may be made to the student for that term. A student who has financial aid returned due to a change in enrollment may subsequently require the student to repay the money to either Drexel or the federal government. If the student does not repay the amount owed or does not make satisfactory payment arrangements with the U.S. Department of Education, Drexel University will report to the National Student Loan Data System (NSLDS) that the student received an overpayment; the student loses eligibility for further Title IV aid until resolved.
Return of Funds
Federal financial aid is canceled and returned to the federal government in an order mandated by the U.S. Department of Education. No program can receive a refund if the student did not receive aid from that program. Funds must be returned within 45 days after the date of withdrawal determination. Return of funds required by the student for unearned aid is returned (repaid) in accordance with the terms of the loan on the promissory note. The order is as follows based on aid offered at Drexel University:
- Unsubsidized Direct Loan
- Subsidized Direct Loan
- Direct PLUS (Graduate Student or Parent)
- Pell Grant
- Federal SEOG
If it is determined that a student is eligible for federal financial aid funds that have not been disbursed, grant funds that the student is eligible for will be disbursed first. Federal aid that the student is eligible for will be credited to the student's account for outstanding charges. If the student has no outstanding charges or if there is a balance due after disbursement, Drexel University will notify the student of his/her eligibility for the loans. The student must respond within 14 days of the date of the letter as to whether he or she wants all, part, or none of the loan(s). If the student fails to respond within 14 days, no loan disbursement will be made.
Canceling Federal Financial Aid
Before calculating the amount of financial aid that must be cancelled as a result of a drop or withdraw of classes, the following is taken into consideration:
- If a Master Promissory Note for a Perkins Loan or Federal Direct Loan has not been signed and submitted by the student prior to the withdrawal date, the loan(s) is automatically cancelled.
- If a mandatory entrance loan interview has not been completed by the student prior to the withdrawal date, the Federal Direct Loan is automatically cancelled.
- Students who have not completed verification are not eligible for federal financial aid and are not included under this policy.