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Title IV funds are federal student aid (FSA) funds administered by the U.S. Department of Education. They include Federal Pell Grant, Iraq Afghanistan Service Grant (IASG), Federal Supplemental Educational Opportunity Grant (FSEOG), TEACH Grant, Direct Loans (Subsidized Direct Loan, Unsubsidized Direct Loan, and Direct PLUS loan), and Perkins loan. FSA funds are awarded to a student under the assumption that the student will attend the university for the entire period for which the assistance is awarded. When an FSA recipient withdraws from the university prior to the end of a payment period, a Return of Title IV (R2T4) calculation will be performed to determine the amount FSA funds earned as of the date of withdrawal.
If the total amount of FSA funds earned is less than the amount of FSA funds disbursed to the student or parent, for a Direct Parent PLUS loan, the difference or unearned funds will be returned to the applicable FSA programs. However, if the total amount of FSA earned is greater than the amount disbursed to the student or parent, for a Direct Parent PLUS loan, the student may be eligible to receive a post withdrawal disbursement (PWD) of the earned FSA funds.
An R2T4 calculation will not be performed if an FSA recipient withdraws after completing the payment period (term) and all FSA funds have been disbursed. Students with a withdrawal date that occurs up through the completion of 60% of a payment period are eligible for a prorated portion of the FSA funds disbursed. Students with a withdrawal date that occurs after completing more than 60% of the payment period earns 100% of the FSA funds.
Withdrawal dates are determined in two ways, either through student-initiated withdrawal (official) or through WGU administrative withdrawal (unofficial). Student-initiated withdrawal occurs when the student notifies the university of the intent to withdraw. Administrative withdrawal occurs when the university determines that the student is no longer enrolled based on a variety of reasons such as a student's lack of academic activity, failure to establish academic activity verification at the beginning of a new term or failure to pay tuition.
Student-initiated withdrawals: The withdrawal date is the date the student notifies the university of the intent to withdraw.
Administrative withdrawals: The withdrawal date is the last date of the student’s academic activity.
See Withdrawal, Student Initiated and Withdrawal, Administrative in the Student Handbook.
Date of the university’s determination that the student withdrew
Student-initiated withdrawals: The date of determination that the student withdrew is the date the student notified the university of the intent to withdraw.
Administrative withdrawals:The date of determination that the student withdrew without providing notification is no later than 21 days after the withdrawal date.
Earned FSA: The amount of FSA earned is calculated by determining the percentage of the period completed and applying this percentage to the total amount of FSA funds disbursed, plus the FSA funds that could have been disbursed to the student or on the student’s behalf. The percentage of the period completed is determined by dividing the number of calendar days completed in the payment period as of the day the student withdrew, by the total number of calendar days in the same period. The number of calendar days in the numerator includes all the days within the payment period from the first day of the term up through the withdrawal date.
Unearned FSA: The amount of unearned FSA funds that the university must return is calculated by subtracting the earned FSA percentage from 100% and multiply the total FSA funds disbursed and could have been disbursed to the student.
If the FSA funds earned is greater than the amount of FSA funds disbursed to the student or on behalf of the student or parent, for a Direct Parent PLUS loan, the FSA funds that could have been disbursed will be treated as post withdrawal disbursement (PWD). As long as the conditions for a late disbursement are met prior to the date the student withdrew, any undisbursed FSA funds will be counted as FSA funds that could have been disbursed. Please refer to the Disbursements Policy for additional information.
If a PWD is due, the university will make a late disbursement of grant funds within 45 days of the date the university determined that the student withdrew. The disbursement of the loan funds will be offered to the student within 30 days of the date the university determined that the student withdrew and will make a late disbursement to the student no later than 180 days after the date the university determined that the student withdrew.
An inadvertent overpayment occurs when the university disburses funds to a student after the student’s last date of attendance but prior to the date the university determined the student withdrew. These inadvertent overpayments are included in the R2T4 calculation as FSA funds that could have been disbursed.
Students who meet the required conditions for late disbursements are entitled to keep the FSA funds disbursed. If an inadvertent overpayment could be made as a late disbursement, the university will return the unearned portion within 45 days of the date the university determined the student withdrew. If an inadvertent overpayment could not be made as late disbursement, the university will return the entire amount of the FSA funds disbursed to the appropriate programs within 45 days of the date the university determined the student withdrew.
When a student withdraws, the university is required to perform a return calculation to determine, among other things, whether adjustments to the credit balance will occur. The university will not release the FSA credit balance created during the period to the student nor returned to the FSA programs prior to performing the return calculation. To determine the final amount of any FSA credit balance, the university will hold these funds beyond the original 14-day credit balance payment requirement.
The university will perform the return calculation including the FSA credit balance for the period as “disbursed funds” and will allocate any FSA credit balance resulting from both the return calculation and applicable institutional refund policy within 14 days from the date the university performs the return calculation as follows:
If the university attempts to disburse the credit balance and the check is returned or an ACH deposit is rejected, the University may make additional attempts no later than 45 days after the funds were returned or rejected. However, the University will cease all attempts and return the funds to the programs no later than 240 days after the initial issue date of the check.
The university will not pay a credit balance that is less than $1.
In the Return Calculation, the university will return the lesser of the amount of FSA funds the student does not earn or the amount of institutional charges incurred by the student for the payment period or term multiplied by the percentage of unearned funds. The university’s institutional charges include tuition and fees initially assessed for the entire payment period or term prior to the student’s withdrawal. Initial charges may only be adjusted by changes the university made prior to the student’s withdrawal.
The amount of FSA funds the student is responsible for returning is calculated by subtracting the amount returned by the university from the total amount of unearned FSA funds to be returned to the programs. The student or parent, for a Direct Parent PLUS loan, must return the unearned FSA loan funds in accordance with the terms of the loan.
Any amount of unearned federal grant funds that the student must return is called an overpayment. The amount of an FSA grant overpayment due from a student is limited to the amount in excess of 50% of the total FSA grant disbursed and could have been disbursed. The student does not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. The student must make arrangements with the university or the U.S. Department of Education to return the unearned federal grant funds.
The university will return the FSA funds to the programs up to the net amount disbursed in the following order:
The university will return the required unearned FSA funds as soon as possible but no later than 45 days after the date the university determined the student withdrew.
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