What if I Withdraw?

The U.S. Department of Education has required institutions and students to repay or refund unearned student aid funds for many years.  Student aid may be considered unearned if a student withdraws completely during a term in which federal Title IV money was received.  Refund and repayment regulations specify, in complex formula, exactly how much is due back to the federal programs from the institution and/or the student. The Higher Education Amendments of 1998 adopted a new approach for the return of unearned federal funds. The new approach became law on October 7, 1998 and was  implemented in the 2000/2001 year.

Schools have certain responsibilities if a student with Title IV funds:

• Officially Withdraws
• Drops Out
• Is Expelled
• Takes an unapproved leave of absence, or
• Fails to return from an approved leave of absence.

Repayment
If you withdraw from ALL of your classes before completing more than 60% of the semester, or receive all F's and/or NC's, you will be required to return any unearned federal funds.

Recalculation

If you never attend a class and the results is a change of your enrollment status, then your Pell grant award must be recalculated.  This will result in you owing part or all of that award many back to the college.

If you owe an overpayment, you have 45 days to repay the college in full or it will be reported to the Department of Education. You will not be able to receive further financial aid from any college until the overpayment has been paid.

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The return of Title IV funds applies only to federal financial aid funds received, excluding federal work-study earnings. There is no impact on state or institutional funds.

Cuesta College complies with all refund requirements established by the federal Title IV financial aid regulations. These regulations may differ from the college's regular refund policy. The college's current financial aid Return Of Title IV Funds policy may be obtained from the Financial Aid Office.

Example

If you get a GRANT and then WITHDRAW from all your classes, you will OWE money to the federal program. Here's how it works:

According to the day you withdraw, the financial aid office will calculate the part of the grant that you have "earned."
Note: If you withdraw after you have earned 60% of your grant, you do not owe any repayment.

Say you get a $1000 grant. If there are 100 days in the term and you drop out on the 26th day, then you earned 26% of your grant.

• The financial aid office will multiply your grant money and figure out what you earned and did not earn.
    $1000 grant x 26% = $260 earned; $1000 x 74% = $740 unearned.
• The college will owe you some of the money depending on the number of units you took.
    You took 12 units at $11 each = $132 x 74% (unearned) = $98 the college has to pay.
• You will have to pay back the unearned amount minus the college share times 50%.
    $740 - $98 = $642 x 50% = $321 you have to pay to the federal program.

If you receive LOAN money and withdraw, you will pay back the money according to the normal rules of the loan program.

If you receive WORK-STUDY money and withdraw, you do not owe anything. You always get to keep salary you have earned.

If you are thinking of withdrawing or just leaving...please think again.

Immediately see a counselor or advisor and discuss your academic or personal reasons for leaving. Perhaps you can stay but take fewer courses. Maybe there are services (like tutoring or personal support) that will help you stay. Talk to your teachers; see what advice and help they can offer.

Don't leave unless you must. But if you must, take care of your business before you go.

Begin the withdraw process with the Admissions and Records office (805) 546-3140. This office will tell you all about the process and rules.

Go to the Financial Aid Office immediately:

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Learn how much you will owe and how you will have to repay it.

Please work with the Financial Aid Office. You can arrange for regular payments with the federal government without losing your student aid eligibility, so it's important to take care of the details before you go. If you leave without taking care of this business and you owe money, the Financial Aid Office will have to put a national HOLD on your student aid eligibility.

For Fall 2008, you will have "earned" your financial aid if you remain enrolled until October 28, 2008.

For Spring 2009, you will have "earned" your financial aid if you remain enrolled until March 30, 2009.

For Summer 2009, you will have "earned" your financial aid if you remain enrolled until TBD