Withdrawals: Refunds and Repayments

Withdrawing from the University may have both academic and financial aid consequences. Students are encouraged to understand the consequences before you decide to withdraw. This can include a lack of satisfactory academic progress for financial aid purposes and ability to enroll in future terms if money is owed back to the school.

If a student withdraws from all their classes from UW-Madison, then the school and/or the student may be required to return some or all of the federal funds awarded to the student/parent for that semester. If a student has applied for aid but has not yet been awarded and/or disbursed applicable funds by the time the withdrawal has occurred then a post-withdrawal disbursement might be required for certain federal funds. In other words the student might have earned federal student aid funds that had not yet been given to the student. A student is required to have begun attendance for the term in order for any refund or post-withdrawal disbursement to occur.

This federal refund requirement for the treatment of Title IV federal funds when a student withdraws is applicable whether or not the school assesses any charges to the student or adjusts institutional charges after the student’s withdrawal. The federal refund must be completed as soon as possible after a student withdraws but no later than 45 days after the date the school determined the student withdrew. Notification of a student’s eligibility for a post-withdrawal disbursement must occur within 30 days of the school’s determination that the student withdrew.

A student withdrawal will result in the loss of employment under the Work-Study employment program, as it does if a student drops below half-time enrollment.

Pro Rata Calculation

The formula used in this federal return of funds calculation divides the aid received into earned aid and unearned aid. The amount of assistance a student has earned is determined on a pro rata basis. Divide the number of calendar days the student has attended classes by the number of calendar days in the semester (minus any scheduled breaks of 5 days or more).This percentage is multiplied by total federal funds disbursed to the student. This is the earned aid that a student may keep or be eligible for as a post-withdrawal disbursement. For example, if the student completed 30% of the period of enrollment/term, the student earns 30% of the assistance originally scheduled to be received.

Generally all financial aid is disbursed to the student account at the start of a term but funds are actually earned as the term is completed. If a student has completed more than 60% of the semester, all aid is considered to be earned, and the return of funds regulations (34 CFR 668.22) no longer apply and no federal funds have to be returned.  

For the 2016-2017 school year, these >60% points in the semester are:

November 10, 2016 for the fall

March 31, 2017 for the spring.

The percentage of federal aid to be returned (unearned aid) is equal to the number of calendar days remaining in the semester when the withdrawal takes place divided by the total number of calendar days in the semester. Scheduled breaks of more than four consecutive days are excluded.

Fall 2016 term begins September 6, 2016 and ends December 23, 2016 with no scheduled breaks that have to be included.

Spring 2017 term begins January 17, 2017 and ends May 12, 2017 with a scheduled break March 18-26 2017 (9 days) for spring break.     

Calculations are done on a case-by-case basis after the withdrawal date is established.

Returning Funds

Once the amount of unearned federal aid is calculated, UW-Madison's repayment responsibility is the lesser of that amount or the amount of unearned institutional charges. Aid funds, for the purposes of this federal regulation are included below and are returned (by the University and/or the student/parent) in the following order, up to the net amount disbursed from each source:

  • Federal Unsubsidized Direct Loans
  • Federal Subsidized Direct Loans
  • Federal Perkins Loans
  • Federal Direct GradPLUS Loan
  • Federal Direct Parent PLUS Loan
  • Federal Pell Grant
  • Federal Supplemental Educational Opportunity Grant
  • TEACH Grant
  • Other Title IV Grant Funds

If the amount to be returned is greater than the amount the school is required to repay the remaining balance is the student’s responsibility to repay. However UW-Madison will return to the Department of Education both the amounts to be returned by the school as well as those amounts to be returned by the student. The school will send the student a letter informing them that as a result of their withdrawal, they now owe money to their student account. The Bursar’s office will send a separate bill.  

Any loan funds that are returned by the student and/or parent are repaid in accordance with the terms of the promissory note. That is, scheduled payments to the holder of the loan over the length of time allowed (for example standard repayment plans are based on a 10 year repayment schedule).

The amount of unearned grant funds to be returned is called an overpayment. The maximum amount of a grant overpayment that has to be repaid is half of the grant funds received or were scheduled to receive. If the original amount of the overpayment is $50 or less then repayment is not required.

Post-Withdrawal Disbursement Eligibility

If the student did not receive all of the funds that were calculated to be earned before withdrawing, a post-withdrawal disbursement may be due to the student. UW-Madison may automatically use all or a portion of a post-withdrawal disbursement of grant funds for tuition, fees, and room and board charges. The school must disburse grant funds no later than 45 days from the date the school determined the withdrawal date. Remaining grant funds can either be provided to the student or, with the student’s permission the school can use the remaining funds for other institutional charges.

If the post-withdrawal disbursement includes loan funds, the school must notify the student, or parent in the case of a parent PLUS loan, within 30 days and receive permission from the student/parent before it can be disbursed. Permission must be received by the school within 14 days of this notification. Other actions such as completing entrance loan counseling and a promissory note may need to be completed before disbursement can occur. It is a student’s choice whether or not to accept none, some or all of the loan funds.

There are a number of federal financial aid funds that cannot be disbursed to a student once they withdraw because of other eligibility requirements. For example, a student loan must be originated before a student withdraws or it is not eligible for disbursement. For campus based funds such as FSEOG the grant has to have been awarded before the withdrawal occurred.

Institutional Refunds and repayment of aid already received

Depending on how much of the semester has elapsed, the student who withdraws from UW-Madison may be eligible for a refund of a portion of the tuition, fees, room and board paid to UW-Madison for the semester. The complete refund schedule for tuition and fees can be found in the Timetable. The refund schedule is no longer than the first four weeks of the semester, and for most students the amount of tuition and fees refunded will be:

  • 100% during the first and second weeks of the semester
  • 50% during the third and fourth weeks of the semester

If a student who is subject to the return of funds formula for financial aid also qualifies for a tuition refund, be aware that the refund amount will first be used to pay any amount to be returned to federal financial aid sources, as dictated by the formula. If there is any refund remaining after the federal aid funds have been repaid, it will be used to repay any state or institutional aid funds received.

As stated earlier, both the school and the student may be required to repay financial aid that was received, but not earned, according to the formula. The amount of aid earned is calculated on a pro rata basis through the 60% point in the semester. As this period is much longer than that which the UW-Madison has for its tuition refund schedule, it is very possible that students whose accounts were paid in full before the withdrawal will end up owing money to the school after the withdrawal. This can happen when the federal formula requires a larger repayment to the aid sources than the amount provided by the tuition refund. When this happens, the student will be responsible for the difference, and will be billed by the UW-Madison Bursar Office.

Unofficial Withdrawals for federal financial aid purposes

If a student leaves school without providing notification, the school has 30 days after the end of the semester to recognize this unofficial withdrawal and use the federal formula to decide if funds need to be returned. This most commonly occurs when all the grades for a given term reflect F’s, NW, W’s, NR, or a combination thereof. In the absence of timely documented last date of attendance the school can use the 50% point of the semester as the withdrawal date in these cases. If the student cannot demonstrate, usually with an email confirmation from the course instructor or teaching assistant, that attendance had begun in some or all classes, aid may be cancelled completely and the student would be responsible for repaying the funds. The student will be contacted by the aid office for their assistance in seeking the confirmation required by the instructor.

Worksheets used to calculate the amount of federal funds to return in the event of a withdrawal are available upon request. Students are strongly encouraged to contact and speak with a financial aid counselor before deciding to withdraw from all their classes for the term. There are a great many individual circumstances that make accurately calculating how much financial aid could be returned challenging. Institutional charges generally do not include books and most supplies, nor off-campus housing expenses. For students living in the resident halls (part of UW Housing) the housing costs for the term are included in the institutional charges regardless of being on a separate billing system from the Bursar Office.


The University reserves the right to amend the Title IV return of funds policy at any time in order to comply with federal regulations.