Treatment of Title IV Federal Aid When a Student Withdraws or is Dismissed
Information on this page explains the treatment of Title IV Federal Aid when a student withdrawals or is dismissed from school. Contact the Financial Aid Office for questions or concerns regarding treatment of federal funds.
The law specifies how schools must determine the amount of Title IV aid that you earn if you withdraw from school prior to completing a term in which you began enrollment. Federal Pell Grants, Iraq Afghanistan Service Grants, Direct Subsidized & Unsubsidized Loans, Direct PLUS Loans, Direct Graduate PLUS Loans, Federal Supplemental Educational Opportunity Grants and Federal Perkins Loans are Title IV programs covered by this law.
When you withdraw during your payment period or period of enrollment the amount of Title IV funds that you earned up to the point you withdrew is determined by a specific formula. If you received (or your parent or school received on your behalf) less assistance than the amount that you earned, you may be able to receive additional funds. If you received more assistance than you earned, the excess funds must be returned by your school and/or you.
The amount of assistance that you earned is determined on a pro-rata basis. For example, if you completed 30% of your payment period or period of enrollment, you earn 30% of the assistance you were originally scheduled to receive. Once you have completed more than 60% of the payment period or period of enrollment, you are considered to have earned all of the assistance that you were scheduled to receive for the period.
If you did not receive all of the funds you earned, you may be due a Post-withdrawal disbursement (PWD). If your PWD includes loan funds, we must get your permission before we can disburse them. You may choose to decline some or all of the loan funds so that you don’t incur additional debt. We may automatically use all or a portion of your PWD of grant funds for tuition, fees, room and board charges but need your permission to use it for other school charges. If you do not give your permission, the funds will be offered to you. It may be in your best interest to allow us to keep the funds to reduce debt you incurred on our campus. There may be some Title IV funds that you were scheduled to receive that cannot be disbursed to you once you withdraw because of eligibility requirements.
If you receive (or your parent or UAMS receive on your behalf) excess Title IV assistance that must be returned, UAMS must return a portion of the excess equal to the lesser of:
- Your institutional charges multiplied by the unearned percentage of your funds, or
- The entire amount of excess funds
We must return this amount even if we previously disbursed this amount to you. If we are not required to return all of the excess funds, you must pay the remaining amount. Any loan funds that you must return, you (or your parent for a PLUS Loan) repay in accordance with the terms of the promissory note.
Any amount of unearned grant funds that you must return is called an overpayment. The maximum amount of a grant overpayment that you must repay is half of the grant funds you received or were scheduled to receive. You do not have to repay a grant overpayment if the overpayment is $50 or less. You must make arrangements with UAMS or the Department of Education to return the unearned grant funds.
The requirements for Title IV funds when you withdraw are separate from any refund policy that UAMS may have. You may still owe funds to UAMS to cover unpaid institutional charges or for any Title IV funds that we were required to return. If you don’t know the refund policy, contact your respective college. Your college can also provide you with the requirements and/or procedures for officially withdrawing.