G-034.1 Return of Title IV Federal Aid for Official and Unofficial Withdrawals Procedure

Official Withdrawal

A student is considered to be officially withdrawn on:

The date the student provided official notification of intent to withdraw, in writing, or verbally; or
The date the student completes the withdrawal process from SMSU in their student account.

A student may withdraw from Southwest Minnesota State University (SMSU) at any time after the drop/add period and upto the official last day to withdraw as indicated on the SMSU Academic Calendar. The official last day to withdraw is approximately 80 percent into the Fall or Spring semester or the equivalent dates for Summer session.

A student is considered a withdrawal from classes offered in a session of enrollment when the student ceases attendance at any point prior to completing the period of enrollment unless the school obtains confirmation from the student at the time of withdrawal that the student will attend a session that begins later in the same period of enrollment. This confirmation must be obtained at the time of withdrawal even if the student has registered for subsequent courses.

If a student receives Title IV grant or loan assistance and does not begin attendance in a period of enrollment, the student is considered to be ineligible for any Title IV aid.

Officially withdrawing from classes may affect the student’s future eligibility for financial aid due to Satisfactory Academic Progress (SAP) requirements and Return to Title IV (R2T4) balances owed.

Unofficial Withdrawal from Southwest Minnesota State University

Unofficial withdrawals encompass all other withdrawals where official notification is not provided to SMSU. If a student does not officially withdraw and subsequently fails to earn a passing grade in all courses attended over an entire period, the institution must assume, for Title IV purposes, the student has unofficially withdrawn, unless the institutions can document that the student completed the enrollment period.

If a student receives Title IV grant or loan assistance and does not begin attendance in a period of enrollment, the student is considered to be ineligible for any Title IV aid.

When a recipient of Title IV grant or loan assistance unofficially withdraws from an institution, after having begun class attendance during a period of enrollment, the institution must determine the amount of Title IV grant or loan assistance that the student earned up to the date of withdrawal. For these unofficial withdrawals, the last date of an academically related activity in which the student participated as stated by the professor of record or authorized departmental representative, or the withdrawal dates is the midpoint of the period of enrollment or the equivalent date for sessions of enrollment.

Unofficially withdrawing from classes may affect the student’s future eligibility for financial aid due to Satisfactory Academic Progress (SAP) requirements and R2T4 balances owed.

Withdrawal Before 60 Percent Point of the Term

The institution must perform a R2T4 calculation to determine the amount of earned aid up through the 60 percent point in each period of enrollment.

Withdrawal After 60 Percent Point of the Term

For a student who withdraws after the 60 percent point of the period of enrollment, a student has earned 100 percent of the Title IV funds he or she was scheduled to receive during the period. Thus, there are no unearned funds. SMSU must still perform a R2T4 to determine the amount of aid that the student has earned and whether or not the student is eligible for a post withdrawal disbursement.

R2T4 – Modular Programs

To be compliant with the Department of Education’s July 1, 2021, implementation date, SMSU implemented the amended CFR 668.22 (I)(6) for determining if a student is considered withdrawn when enrolled in modules, session or intersessions. Students in modules, session or intersessions are not considered withdrawn for R2T4 calculation purposes if:

The student successfully completes one module that includes 49% or more of the number of countable days in the payment period with at least half-time enrollment; or
The student successfully completes a combination of modules that when combined contain 49% or more of the number of countable days in the payment period with at least half-time enrollment; or
The student successfully completes Title IV eligible coursework equal to or greater than halftime enrollment; or
The student provides written confirmation of their intent to attend a Title IV eligible course beginning later in the term and no more than 45 calendar days after the end of the module the attendance ceased; or
The student fulfills the graduation requirements within a module or combination of modules within the term.

If students are enrolled for multiple sessions during an academic term, and are packaged for Title IV aid using the enrollment of multiple sessions, then the NASFAA “Determining Whether a Student Has Withdrawn from a Standard – or Nonstandard -Term Program Offered in Modules” questions will be used to determine if the student qualifies as a withdrawn student. (Please see Appendix A for this decision tree.)

To determine if a student plans to attend a Title IV eligible course in a later module in the payment period or period of enrolment that begins no later than 45 calendar days after the end of the module they ceased attending, SMSU sends the student an email. If no response is received one week after the request has been made, the R2T4 is completed.

If a student confirms intent to attend in a module beginning later in the term, but does not actually return, the student is considered to have withdrawn, and the last date of attendance from the most previously attended course is used as the withdrawal dates for the R2T4 calculation.

Earned Aid

Title IV, HEA aid is earned in a prorated manner on a per diem basis (calendar days) up to the 60 percent point in the semester. Title IV, HEA aid is viewed as 100 percent earned after that point in time. A copy of the worksheet used for this calculation can be requested in writing from the Financial Aid Office.

Post-Withdrawal Disbursement Conditions

If a student has accepted Title IV financial aid by the date of withdrawal, but the financial aid has not disbursed, the student may be eligible for a post-withdrawal disbursement. If the amount disbursed to the student is less than the amount the student earned, and for which the student is otherwise eligible, he or she is eligible to receive a post-withdrawal disbursement for the earned aid that was not received.

Under these circumstances, a R2T4 calculation must be performed to determine whether the student is actually eligible for a post-withdrawal disbursement. SMSU must make this determination within 30 calendar days after the student withdraws. If a student is eligible for a credit balance those funds will be disbursed as soon as possible, but no later than 14 days after the calculation.

The following conditions apply when processing a post-withdrawal disbursement:

Students must have accepted aid by the date of withdrawal.
If, before the withdrawal date a loan offer has been accepted, the loan must also have been originated by SMSU.
In all Title IV program, a promissory note must be signed for a loan to be included as aid that could have been disbursed in an R2T4 calculation. The signature may be obtained after students withdraw. However, for the loan to be included as aid that could have been disbursed, the promissory note must be signed before the school performs the R2T4 calculation.
If students are eligible for a post-withdrawal disbursement of a loan, the Financial Aid Office must send notification of post-withdrawal disbursement eligibility to students within 30 calendar days after the student withdraws. Students will be given a minimum of 14 calendar days to either accept or decline the post-withdrawal disbursement offer of the loan.
SMSU must disburse any Title IV grant funds that students aresue as part of a post-withdrawal disbursement within 45 calendar days of the date SMSU determined the student withdrew and disburse any loan funds a student accepts by the post-withdrawal disbursement deadline within 180 calendar days of the withdrawal date. The school must obtain written permission from students before the loan funds can be disbursed.
For students who provide notification back to SMSU that they want the loans funds prior to the post-withdrawal disbursement deadline, the Financial Aid Office will disburse the loan.
A school cannot make a post-withdrawal disbursement to deceased students or students who have not signed the loan’s promissory note.

Time Frame for the Return of Title IV Program Funds

The following rules apply when completing a return calculation for a student.

SMSU will return any unearned Title IV funds it is responsible for returning within 45 calendar days of the date SMSU determined the student withdrew, and offer any post-withdrawal disbursement of loan funds within 30 calendar days of that date.
Unless a student subject to verification has provided all required verification documents in time for SMSU to meet the Return deadlines, SMSU includes as Aid Disbursed or Aid That Could Have Been Disbursed in the Return calculation.
If it is determined that a student who failed to provide all required verification documents in time for SMSU to meet the Return deadline and later provides those documents prior to the applicable verification deadline, SMSU must perform a new Return calculation on all of the aid the student qualified for based on the completed verification documents and make the appropriate adjustments.
To give a Pell Grant to a student, SMSU must have a valid output document (one with an official Student Aid Index computed from correct data) while the student is still enrolled for the award year or in the time frame the student qualifies for a last disbursement under 34 CFR 668.164(j)(4)(i).
If is it determined that a Post-Withdrawal Disbursement (PWD) is needed, the following occurs:
1. A PWD of grant funds must be disbursed within 45 days of the date of the school’s determination.
2. If the student is eligible for a PWD of loan funds:
  1. SMSU must offer the loan funds to the student within 30 days of the date of the school’s determination that the student has withdrawn.
  2. SMSU must provide at least 14 days for the student to either accept or decline those loan funds.
  3. SMSU must disburse the requested loan funds no later than 180 days after the request has been made.

Time Frame for the Return of an Unclaimed Title IV Credit Balance

In the event SMSU cannot locate the student (or parent) to whom a Title IV credit balance must be paid, Business Services will determine what programs constitute the refund and will notify the Financial Aid Office of any unclaimed credit balances that need to be returned to Title IV programs. The Financial Aid Office must return the funds no later than 240 calendar days after the date the school issued a check or 45 calendar days after the electronic fund transfer (EFT) was rejected.

Institution Responsibilities

The following are SMSU’s responsibilities in regards to Title IV, HEA funds:

SMSU will provide students with information in this policy.
The Financial Aid Office will identify students who are affected by this policy and complete the Return of Title IV funds calculation for those students.
Any Title IV, HEA funds required will be returned to the correct Title IV programs within 45 calendar days of the date the official notice of withdrawal was provided.
If less Title IV aid has been disbursed than the student has earned, a post-withdrawal disbursement will be calculated and must be offered.

The institution will always return all of the excess funds, including funds the Return of Title IV calculation identifies as the student’s responsibility to return.

Student Responsibilities

Withdraws should be completed through the students online portal
Student must repay any funds to SMSU that were disbursed to the student in which they student was determined to be ineligible for via the R2T4 calculation.
Remaining Title IV loan funds must be repaid by the student in accordance with the terms of the loans.

Refund vs. Return of Title IV Funds

The requirements for the Return of Title IV program funds when a student withdraws are separate from any refund policy that SMSU may have to return to the student due to a cash credit balance. Therefore, the student may still owe funds to the school to cover unpaid institutional charges. SMSU may also charge the student for any Title IV program funds that they were required to return on the student’s behalf.

Return of Title IV Questions

Any questions you have regarding Title IV programs funds after visiting with or emailing the Financial Aid Office, please call the Federal Student Aid Information Center at 1-800-433-3243. TTY users may call 800-730-8913. More information can be found by visiting Federal Student Aid.

Policy History

Date of Adoption: December 4, 2025
Date of Last Review:

Date and Subject of Amendments

12/4/2025 – Creation of procedure