When a student withdraws from some, but not all classes, eligibility for federal grants will be adjusted to reflect the new enrollment status even if the grant has already been disbursed, unless it occurs after they have incurred full tuition liability, i.e. after the fourth week. Eligibility for federal loans is not affected in the current semester as long as the student is still enrolled at least half-time when the loan funds are disbursed. If a student waits until after the semester has started to apply for aid their eligibility will be based on the enrollment status at the time of application or, if eligible for prior terms, based on the number of credits completed.
When a student withdraws from all courses in a semester a refund calculation must be performed to determine what portion of a student's federal aid they have "earned". The amount of aid earned corresponds to the portion of the semester the student has completed based on when they start the withdrawal process. For instance, a student who withdraws 1/4 of the way through the semester would earn 25% of their aid.
Students who withdraw after the 60% point in time in a semester have earned 100% of their aid. If a student withdraws prior to the 60% point in time the school must return the unearned portion of aid. This often results in the student owing a balance to the school that would have originally been paid by financial aid.
Aid that is returned is used to repay federal loans first and federal grants second. If the aid from all federal programs was not disbursed before the student withdrew they will be given the opportunity to receive the aid if they have "earned" it and if other program requirements allow.
