To be eligible for financial aid, students must meet minimum enrollment requirements.  A change of enrollment status at any point during a semester could result in a revision of the financial aid offer.  To withdraw from the University, a student must notify the Registrar in writing. Official withdrawal forms are available from the Registration and Scheduling Services office, the Advising Office, and online, and require a signature.   

Understanding how a change in enrollment status will impact your financial aid can be a challenging topic. We encourage students to review the information on this page and contact our Student Financial Services Office with questions.

Impact on Federal Financial Aid

U.S. Department of Education regulations govern the refund and repayment of federal aid when a student withdraws or otherwise fails to complete the period of enrollment (semester) for which federal student aid has been received. This requirement applies to students who take a leave of absence or withdraw from all classes as well as those students who simply stop attending and do not otherwise provide official notification. In the latter case, this is considered an unofficial withdrawal.

Federal regulations require the University of Southern Maine (USM) to perform a Return of Title IV (federal) funds calculation for students who withdraw (officially or unofficially) from all classes and for students who drop or withdraw from any modular course(s) that do not successfully complete the scheduled period of enrollment.

Withdrawal Date

The withdrawal date is the date on which the student begins the official withdrawal process or the last documented date of attendance in an academically related activity if this date more accurately reflects the student’s withdrawal date.

In the case of students who stop attending without providing official notification, a student’s unofficial withdrawal date is defined as the midpoint (50%) of the semester, unless Student Financial Services is able to document the confirmed last date of attendance. The timeframe for midpoint may differ for students enrolled in modular and/or summer courses.

Treatment of Title IV Aid When a Student Withdraws

A school is required to determine the earned and unearned portions of Title IV aid as of the date the student withdrew based on the time the student spent in attendance through the Return of Title IV (R2T4) funds calculation. Although financial aid can be posted to student billing accounts at the start of each period of enrollment, students earn the funds as they complete the period of enrollment.

To determine how much financial aid a student has earned, we will calculate the percentage of the enrollment period completed, based on calendar days. Any scheduled breaks of 5 or more days will be excluded. The remainder is the amount of federal aid that is unearned and must be repaid. Unearned federal financial aid is returned to the program in accordance with federal regulations. A specific federal formula is used to determine the amount of Title IV funds the student has earned at the time of withdrawal. Information used to complete the calculation in the R2T4 process will include: the date of withdrawal, federal aid, institutional charges, and the period of enrollment. Institutional charges include tuition, fees, books, and housing and food. These calculations may result in the student owing a balance to the university. If a student received less federal aid than the amount earned, they may be able to receive a post-withdrawal disbursement. If a student received more federal aid than they earned, the excess funds must be returned by the school and/or the student.

The amount of federal aid earned is determined on a pro rata basis. For example, if the student completed 30% of the enrollment period, they earn 30% of the federal aid they were originally scheduled to receive. Once a student has completed more than 60% of the enrollment period, they have earned 100% of the federal aid they were scheduled to receive for that period.

Students will not be subject to a Return of Title IV funds if they meet one of the following exemptions:

  • Complete all of the requirements for graduation;
  • Successfully complete a class or multiple classes that comprise at least 49 percent of the days in the term (in a program offered in modules); or
  • Successfully complete a class or multiple classes that comprise at least half-time enrollment (in a program offered in modules).

If a student meets one of the R2T4 exemptions, Student Financial Services may be required to recalculate the federal aid eligibility based on the newly revised enrollment plan. 

Timeline

Return to Title IV calculations must be completed within 30 days of the school’s determination that the student is withdrawn. Unearned Title IV funds must be returned within 45 days of the school’s determination of withdrawal. When funds are returned, students are notified through university email. The return of these funds may result in the balance due to the university.  Students must make satisfactory payment arrangements with Student Accounts for repayment of the debt.

Priority of the Return of Funds

If USM is required to return funding to federal programs, it is processed in the following order:

  • Unsubsidized Direct Loans
  • Subsidized Direct Loans
  • Direct PLUS Loans
  • Federal Pell Grants
  • Federal Supplemental Educational Opportunity Grants (FSEOG)
  • Other Title IV Aid Programs
  • Other Federal, State, Private or Institutional Aid
  • The Student

If the school is not required to return all of the excess funds, the student may be required to return the remaining amount. For any loan funds that must be returned, the student (or parent for a Direct PLUS Loan) will repay the loan funds in accordance with the terms of the promissory note by make scheduled payments to their designated loan servicer over a period of time.

Post-Withdrawal Disbursement

If a student did not receive all of the funds that they earned, they may be due a post-withdrawal disbursement. Students have the right to accept or decline, some or all, of the post-withdrawal disbursement that is offered. Students are given 14 days from the date of the notification to respond. Students are encouraged to examine whether it is beneficial to accept a post-withdrawal disbursement. Any opportunity to keep loan debt at a minimum should be considered. A post-withdrawal disbursement of grant funds is automatically applied to the students account. All post-withdrawal disbursements are applied first to any university balance due. A remaining credit balance will be refunded to the student or parent within 14 days of the disbursement.

Impact on Tuition and Mandatory Fees

USM follows a tuition proration schedule when adjusting tuition and mandatory fees in the case of a withdrawal. View the Add/Drop and Withdrawal Financial Adjustments Policy to determine the impact on institutional charges. Please note that this does not follow the same schedule as federal aid and that the Add/Drop and Withdrawal Financial Adjustments Policy also applies to students who are not federal aid recipients. Students with a balance due to the university should contact Student Accounts to make a satisfactory payment arrangement.

Special Considerations

Students who take a leave of absence or withdraw and are also Title IV aid recipients should be aware of the following:

  • Students must have completed promissory notes and entrance counseling in order to be eligible for any late payments of federal loan funds after the last date of attendance.
  • Once USM determines that a student has withdrawn or taken a leave of absence, the student is no longer eligible for an in-school status or in-school loan deferment. Any student who had a loan during their time at USM will be required to complete a loan exit interview where information regarding loan repayment will be provided by the U.S. Department of Education.
  • Direct Subsidized and Unsubsidized Loans have a 6-month grace period, which begins after a student ceases attendance or drops below half-time. These loans enter repayment at the end of the grace period. Payments begin not more than 60 days after the grace period ends. If a student resumes enrollment on at least a half-time basis in an eligible degree program before the end of the 6-month grace period or deferment, federal student loans will return to an “in-school” status or deferment, and will be eligible for a full 6-month grace period or deferment when the student leaves school or drop below half-time enrollment again.
  • Federal regulations require that students receiving federal financial aid make regular progress toward earning their degree within a specific period of time. To meet this federal requirement, the University of Southern Maine maintains a Satisfactory Academic Progress (SAP) Policy for financial aid eligibility.  All financial aid recipients will be evaluated annually against this policy.


Additional Resources

It is important to note that the University of Southern Maine (USM) does not have a Leave of Absence policy as defined by the Department of Education for purposes of awarding and receiving Title IV financial aid.  While students can request a leave of absence from USM, these are considered to be withdrawals for Title IV aid purposes and the Return of Title IV funds requirement applies.