Repayment of Federal Funds Policy For Students Who Withdraw or Cease Attending (Return of Funds)

Students who drop all of their classes during the term are considered withdrawn from the university for financial aid purposes and may need to return a portion of the aid they received for that semester. We encourage financial aid recipients to meet with their financial aid counselor prior to dropping their classes to review their options. Please review the rest of this page for important information about withdrawing during the term, ceasing attendance, and/or failing all classes during a term.

Official Withdrawals

The following actions are considered official withdrawals for financial aid purposes:

  • Dropping all classes during a semester or term.
  • Dropping all classes after earning a passing grade in USU Connections.
  • Dropping first session classes and not confirming one's intent to remain in the second session.
  • Dropping second session classes after completing the first session.
  • Dropping second session classes during the second session.
  • Dropping second session classes before the first session is completed generally does not count as an official withdrawal.

Students must drop their classes as part of the withdrawal process. After 60 percent of the semester or term, a student can apply for an academic record adjustment to withdraw from their classes to avoid failing grades/unofficial withdrawal.

Whether or not a student notifies the university, dropping classes in the ways listed above is considered an official withdrawal.

Please note that the policies below are still in effect during the Covid-19 Crisis.
Academic progress and refund appeals will always be considered for extenuating circumstances.

Repayment of Federal Funds / Return of Funds (R2T4)

Financial aid comes with standards and limitations to encourage aid recipients to graduate in a timely manner. Students who completely withdraw from the University during the course of a semester without participating through 60 percent of the semester may be required to return a percentage of their Federal Financial Aid. All types of Federal Financial Aid are included in this repayment, including: Federal Pell Grants, Federal TEACH Grants, Federal Supplemental Grants, and Federal Direct and PLUS Loans.

The amount of repayment is based on institutional charges and the percentage of the semester completed. For example, if a student withdraws after completing 40% of the semester (calculated using calendar days), the school must return 60% of the student's Federal Financial Aid that was or could have been allocated to tuition, fees, and USU housing/USU meal plans, if any. See example below.

Federal funds are returned by USU in the following order until the calculated amount to return has been exhausted:

  • Federal Unsubsidized Direct Loans
  • Federal Subsidized Direct Loans
  • Federal Direct PLUS Loan (Graduate students)
  • Federal Direct PLUS Loan (Parent)
  • Federal Pell Grant
  • Federal SEOG Grant
  • Federal Teach Grant
  • Iraq Afghanistan Service Grant

Students should review the USU refund policy when dropping classes. 

Example:

A student with $4615 in tuition and fees has Federal Aid in the following amounts:
Federal Pell Grant.........................................$1,500
Federal Subsidized Direct Loan..............$2,750
Federal Unsubsidized Direct Loan.........$1,000
Total Federal Aid................................$5,250


  • If the semester has 105 calendar days and the student drops all their classes on day 26,
    The return of funds would be calculated as follows:
    Day 26 divided by 115 calendar days = .247 or,
    25% of the semester completed,
    75% of the semester not completed.
  • USU must return 75% of the federal aid allocated for tuition & fees:
    $4615 Tuition & Fees x 75% = $3461 return of funds
  • USU would repay $1000 of the Unsubsidized loan, $2461 of the Subsidized Loan to the federal loan originator.
  • This return of funds would reduce the student's outstanding federal loan balance, but,
  • USU would bill the student for $3461.
  • Amounts returned to the loan originator can be borrowed again in a future term, if the student is otherwise eligible.

Students who withdraw from USU after the third week of school (20% of the term) generally do not receive tuition refunds but may appeal to the Registration office if there were extenuating circumstances for the withdrawal.

Federal funds must be returned by USU no later than 45 days of the date the university determines that the student withdrew.

Please note that federal grant and TEACH recipients must document academic participation in each of their classes (including attending class, taking exams, turning in assignments, etc.) in order to avoid repaying additional grant money in addition to the returns discussed above.

Students who are withdrawing from Utah State University and who have Federal Financial Aid should meet with their financial aid counselor prior to withdrawing to discuss how withdrawing will affect them financially.

  • A student who never begins attendance in their classes will be required to return 100% of their aid including student loans.
  • Federal aid recipients may need to help the financial aid office document academic participation in each of their classes (including attending class, taking exams, turning in assignments, etc.) in order to avoid repaying additional grant money for which they are not eligible.
  • An online-only student with no graded assignments, quizzes, or tests may be required to return 100% of their aid including student loans. 
  • Students who cease attending after completing 60% of the semester may not have to return any federal aid.

If the student is eligible for a refund of tuition and fees, according to the University refund policy, the refund will be applied to the Federal Financial Aid Repayment. A refund may not completely repay the federal aid balance. The student may not be allowed to register for future classes until the balance is repaid.

Please note: Loan and Grant funds returned by the school because of withdrawal must be repaid immediately to USU. Remaining loan funds will go into repayment according to the terms of the loan.

Date of Official Withdrawal

The last date of participation is determined when the student notifies USU about withdrawing from the semester by speaking to an academic advisor, financial aid counselor, or registrar OR the date the student submits a withdrawal request using usu.edu/sots/loa and/or the date they drop all of their classes. 

Please note: Loan and Grant funds returned by the school because of withdrawal must be repaid immediately. Students in extenuating circumstances may apply for a tuition and fees refund to help cover their financial aid balance at the discretion of the university. The student is responsible for paying any balance not covered by a USU refund. Any remaining loan funds will go into repayment according to the terms of the loan.

Please review the USU refund policy when dropping your classes. 

Post Withdrawal Disbursement

In some cases, federal financial aid has not been disbursed to the student at the time of withdrawal. The conditions under which a student would be owed a portion of their financial aid occurs when a student has earned, based on days attended, more aid than must be returned by USU. Within 30 days of the withdrawal, the financial aid office will determine eligibility and notify the student to see if they are interested in those funds, including loans that may have to be paid back at a later date. Any earned aid will be disbursed to the student within 45 days of when USU determined that the student withdrew. The student must confirm in writing that they still want to borrow any loan funds.

USU Notification of Leave

Students in good standing with USU are allowed to take leave during or after the semester and return at a later semester without having to re-apply for admission (in most cases.) If a federal financial aid recipient takes a leave of absence during the semester, and drops all their classes, they are subject to the repayment of federal funds policy outlined above.

  • If a federal financial aid recipient starts their leave after the term, then they are not subject to the policy.
  • If a student submits a notification of leave for the current semester but fails to drop their courses, our office will follow up until the classes are a dropped or a student revokes the notification.
  • Notification of leave past 60 percent of the semester are notified by USU that they must complete the academic record adjustment process instead.

To notify USU of your intent to withdraw during the semester, or before the next semester begins, go to usu.edu/sots/loa or call (435) 797-7557 or (800) 488-8108 for assistance.

Unofficial Withdrawals

Students who receive all F and/or NF grades and participated in an academic activity (including attending class, taking exams, turning in assignments, etc.) through 60 percent of the semester may not have to repay some or all of the federal funds received. Students who receive all F and/or NF grades and ceased attending before 60 percent of the semester may have to repay some or all of the federal funds received. A student who passes their USU Connections course but fail all their other courses in a term are considered an Official Withdrawal.

Date of Unofficial Withdrawal

The last date of participation documented by an instructor on Canvas or by email correspondence will be used to determine what percentage of the semester the student participated and a calculation will be made to determine the amount of federal aid that must be returned. If USU is unable to determine the date the student ceased attending, it will assume the student attended 50 percent of the semester when calculating how much aid must be returned. In some cases, such as all NF grades, the entire amount of federal aid for that semester must be returned.

Please note: Loan and Grant funds returned by the school because of withdrawal must be repaid immediately. Students in extenuating circumstances may apply for a tuition and fees refund to help cover their financial aid balance at the discretion of the university. The student is responsible for paying any balance not covered by a USU refund. Any remaining loan funds will go into repayment according to the terms of the loan.

This policy is federal law and may not be appealed. Further details are available from the Financial Aid Office, TSC 106; (435) 797-0173.