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Return of Title IV Policy

The University recognizes that circumstances may arise that require students to drop some or all of their classes. Indiana State University's Refund Policy, published in the Schedule of Classes, is used to determine the refund of institutional charges.

A refund of institutional charges may also impact the student's eligibility for certain types of financial aid. Students who withdraw officially or unofficially from all of their courses may be subject to the Federal Return of Title IV Funds formula if they have received any Federal Title IV financial aid. Federal Title IV aid consists of the following and will be returned in this order:

  • Federal Direct Unsubsidized Loan
  • Federal Direct Subsidized Direct Loan
  • Federal Direct Graduate/Parent PLUS Loan
  • Federal Pell Grant
  • Federal Supplemental Educational Opportunity Grant (FSEOG)
  • Iraq Afghanistan Service Grant

The Federal Return of Title IV Funds formula is used to determine the amount of Federal Title IV aid that must be returned to the federal government by the school and the student.

Dropping all classes before the semester begins:

Any time a student withdraws completely from all classes, the financial aid office will require a 100% return of refunds issued that were drawn from federal and state funds, since the student never attended a single class. If this process occurs before the 7th day of the semester, the student is typically entitled to a refund of University charges. The refund schedule is available on the Office of Registration and Records homepage:

Dropping some classes after the semester begins:

Financial aid recipients are required to complete 67% of the classes originally attempted. (See also Satisfactory Academic Progress Policy.) If the student falls below 67% completion rate, he or she will forfeit their eligibility for federal financial aid. It is critical to exercise discretion when deciding when to drop and add classes after the semester has already begun.

Enrollment information is reported to the National Student Loan Data System, and previously borrowed loans may go into repayment if the student does not meet deferment criteria (half-time enrollment).

Pell grant recipients must attend all of their courses in order to keep the grant. Failure to attend all courses could result in a reduction of Pell grant funds.

Dropping all classes after the semester begins, also called a WITHDRAWAL:

Official withdrawals are defined as students who drop all of their courses prior to or after the payment period begins. Students seeking to withdraw from the current term must do so through the student self-service badge in the MyISU Portal.  For instructions, see Withdrawal Procedures.

In general, withdrawals that occur prior to the first week of classes are eligible for a full refund. Refunds are prorated thereafter depending on the portion of the semester. After the 4th week of the semester, fee refunds are generally not permitted. See for details. Housing and meal plan contracts vary. Contact The Office of Residential Life for an application for contract release.

When a student officially withdraws from ISU, the Office of Registration and Records determines the withdrawal date as the official date the student withdrawals from all classes. The withdrawal date will be used in the Federal Return of Title IV formula to determine the percentage of the payment period completed. The percentage of the payment period completed will determine the portion of the Federal Title IV aid earned (or could have been earned) to be used to pay remaining institutional charges (such as tuition, fees, or university housing) on a student's account. For example, if the student withdraws after completing 30% of his classes, he is only entitled to approximately 30% of his federal financial aid.

In a situation where the total amount of earned Federal Title IV grants and/or loans is less than the disbursed amount, the difference must be returned to the Federal Title IV programs in the order listed above. And no additional disbursements may be made to the student for the payment period.

However, if the total amount of earned Federal Title IV grants and/or loans is greater than the total amount of disbursed and/or could have been disbursed, the difference between these amounts must be treated as a post-withdrawal disbursement.

A post-withdrawal disbursement must be made from available grant funds before available loan funds. If outstanding current charges exist, the post-withdrawal grant funds will be applied to those charges and any excess grant funds will be refunded to the student. However, a post-disbursement of loan  requires the confirmation of the student or parent for a parent PLUS loan. In these situations, the student and/or parent will be notified within 30 days of the institution's determination that the student withdrew to offer the post-withdrawal disbursement. The funds may be accepted or declined by the student and/or parent within 14 days from the date of notification. Once notification of acceptance has been received, ISU will disburse the funds within 180 days of the institution's determination that the student withdrew.

Once the withdrawal has been completely processed, this may leave some university charges unpaid, and the student will be billed for this amount. The amount due will appear on the student's bill within 45 days after the withdrawal date.

Unofficial Withdrawals, At the end of each semester, the Office of Student Financial Aid will review all financial aid applicants whom have completed the semester and failed to complete any of their courses with a grade of D- or better. For these students, the Office of Student Financial Aid will work with the Faculty to determine the last date of academically related academic activity. If it is determined the student did not attend the entire semester, the Office of Student Financial Aid will complete a Federal Return of Title IV for those students who received Federal Title IV aid within 45 days.

Non passing grades are as follows: IN, F, Fx, W, Dx. Students whose instructor indicates that they never attended for any portion of the term will be withdrawn for that term and given grades of W. Grades of “IN” will be automatically assigned a failing grade after 1 year. All other grades persist as given.

The Last Date of Attendance is the date used to determine the percentage of the term completed. If a student fails to pass any classes, and has attended less than 60% of the term based on the dates provided by his instructors, the financial aid office will use the midpoint of the term to calculate aid earned.

Appropriate documentation for Last Date of Attendance can include:

  • Physically attending a class where there is opportunity for interaction between the instructor and the student;
  • Submitting an academic assignment;
  • Taking an exam, interactive tutorial, or computer-assisted instructions;
  • Attending a study group that is sponsored by the school;
  • Participating in an online discussion about academic matters; and Initiating contact with a faculty member to ask a question about an academic subject.

After all Title IV aid return requirements have been satisfied, remaining credit balances will be used to pay allowable existing outstanding fees. If a credit balance remains after all aid sources have been repaid, funds are returned to the student. If funds are released to a student because of a credit balance on the student's account, then the student may be required to repay some of the Title IV funds if the student withdraws.



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