Federal Refund Policy

Beginning in 1998, Congress established provisions governing what must happen to federal financial aid when a student completely withdraws from school in any academic term. The policy governs all federal grant and loan programs, including Federal Pell Grant, Federal SEOG, Federal Perkins, Federal Stafford Loans, Federal PLUS Loans, and Federal PLUS Loans for Graduate Students.

Institutional financial aid programs funded by Russell Sage College are not governed by this policy.

Federal financial aid is “earned” directly in proportion to the number of days attended during the academic term. The school must calculate the total amount of federal financial aid the student has earned and is entitled to receive up to the date of withdrawal. This calculation of earned financial aid is derived from a formula mandated by the United States Department of Education. The portion of federal grants and loans a student is entitled to receive is calculated on a percentage basis by comparing the total number of days in the semester to the number of days the student completed prior to the withdrawal date. For example, if a student completes 30% of the semester, then 30% of the federal financial aid awarded is considered earned, and 70% of the scheduled awards must be returned. If a student has already received more financial aid than he/she has earned, the unearned funds must be returned to the appropriate originating agency. When the date of withdrawal occurs after 60% of the semester has elapsed, then the student is considered to have earned 100% of his/her aid, and no action is needed.

Good news for students: The federal calculation is geared to allow students to retain a larger portion of grant aid than of loans. The percentage of aid the student has earned isn’t applied evenly to all awards, in that loans are repaid before grants are reduced.

A student’s withdrawal date will be determined by the college as (1) the date the student began the college’s withdrawal process, or the date the student officially notified the college of intent to withdraw; (2) the midpoint of the semester if the student withdraws without officially notifying the college; or (3) the student’s last date of attendance at an academically related activity as documented by the college.