Impact of Withdrawing on Current and Future Financial Aid

Withdrawing may impact your eligibility for federal, state and institutional grants and loans, scholarships and third-party sponsorships for the current term as well as future terms. A withdrawal that results in a change from full- to part-time enrollment status also can jeopardize your financial aid eligibility. Following your withdrawal, all of your aid will be recalculated and you may have to return all or part of your aid for this term. Your withdrawal may result in a balance due on your account.

In addition to the important information below about federal student aid, review Empire State College statements on Eligibility for New York State Financial Aid and Eligibility for Federal Student Aid.

Students Withdrawing That Have Received Any Federal (Title IV) Aid, Including Loans

In accordance with rules established by the U.S. Department of Education, schools must adhere to new provisions regarding the treatment of Federal Title IV financial aid for students that withdraw from school completely for any term. These rules govern all federal loan and grant programs, including Direct Loans, PLUS ploans, Perkins loans, Pell, SEOG, ACG, SMART and TEACH grants (for eligible graduate students).

In general, the new law assumes that a student must "earn" federal financial aid awards directly in proportion to the number of days of the term attended. In other words, a student earns financial assistance as they attend class. If a student completely withdraws from all classes during a term, the school must calculate the portion of the total scheduled financial assistance earned. If the student received (or the school received on behalf of the student) more aid than was earned, the unearned funds must be returned to the federal programs.

The portion of federal loans and grants the student earned is calculated on a percentage basis comparing the total number of calendar days in the semester to the number of days completed before withdrawal. (Scheduled breaks of five consecutive days or longer are excluded from the calculation). All Title IV aid is considered earned after the student has completed 60 percent of that semester.

For example: Student enrolls with an enrollment period of 01/22/08 to 05/02/08. The enrollment period is 102 days. The student withdraws from all coursework on 03/05/08 - which is the 44th day of the enrollment period. The student has earned 43 percent of the Title IV aid awarded (days attended/enrollment period, or 44/102, which equals 43 percent). Whatever percentage of the term the student attends is the percentage of Title IV aid that is earned. Once the student exceeds the 60 percent point of the enrollment period, the student has earned 100 percent of the Title IV aid. In the above example, if the student withdrew as of 03/25/08, 100 percent of the aid would be earned and no return calculation is required (03/25/08 would be day 64 of the term, so 64/102 equals 62 percent-which is beyond the 60 percent point of the term).

Unearned federal financial assistance must be returned to program funds up to the amount of assistance that the student has received from the program in the priority order established by regulation: Unsubsidized Direct Loan, Subsidized Direct Loan, federal Perkins loan, PLUS loan, federal Pell grant, federal SEOG, and other Title IV programs. The school takes the responsibility on behalf of the student to return unearned federal financial aid assistance funds that were applied directly to institutional charges. Institutional charges at the school that are no longer covered by financial assistance immediately become the responsibility of the student and the student also is responsible for return of unearned federal financial funds that were disbursed directly to him or her. To prevent undue hardship, allowances have been made if the unearned assistance repayment owed by the student is due to a loan program. Funds due for repayment to a loan program permit the student to repay according to the terms of the promissory note. In addition, if the student is directly responsible for repayments of unearned assistance to a federal grant program, only one-half (50 percent) of the original grant amount is required.

If a student withdraws from a term and receives a reduced Federal Direct Subsidized loan, the student may see an increase in the next term's Federal Direct Subsidized loan. Generally, this will result in a direct decrease in the Federal Direct Unsubsidized loan as well. Students who would like to increase the amount of the Federal Direct Unsubsidized loan should contact the Financial Aid Office for a full review of their overall eligibility requirements.  A student will not be awarded more than half of the overall annual loan limit for a given term.

Questions?

Contact the Student Information Center at 518-587-2100 or 800-847-3000.