Withdrawal Impact on Financial Aid

If you are considering withdrawing from all of your classes it is strongly recommended that you see a financial aid administrator before doing so.

How Withdrawing From a Semester Impacts Your Financial Aid 

The Federal Pell Grant, SEOG, and Direct Student Loans are funds that come from the Federal Government. These programs have policies that require students who withdraw completely from a semester to repay unearned portions back to the federal government. All students need to be aware of how Norwalk Community College implements these requirements. 

This policy affects ONLY students who completely withdraw from a semester. Complete withdrawal means dropping (officially or unofficially) from ALL your classes in a semester. If you stay enrolled in and complete at least ONE course, this policy does not apply. 

NCC is required to determine the earned and unearned Title IV aid a student has earned as of the last date of participation. The calculation of the Title IV funds earned by the student has no relationship to the student’s incurred institutional charges. 

When students receive Pell, SEOG, and/or Direct Loans and completely withdraw, they are considered to have “earned” a portion of their federal aid equal to the percentage of the semester they completed. Up to the sixty percent (60%) point of each payment period or semester, a Return to Title IV (R2T4) calculation is used to determine the amount of FSA funds students have earned in the semester. 

Federal Title IV Regulations require a calculation for the return of Title IV Funds which are not earned by the student in that semester. This regulation requires the college to determine the amount of return through the following calculation: 

  1. Official date of withdrawal
  2. Unofficial date of withdrawal
  3. Total number of days in the semester
  4. Percentage of Title IV funds earned and unearned
  5. Amount of funds to be returned by the student 

Return of Title IV Funds 

Title IV financial aid funds are awarded under the assumption that a student will attend school for the entire period in which the assistance was awarded. When a student withdraws from all courses for any reason, including medical withdrawals, s/he may no longer be eligible for the full amount of Title IV funds that s/he was originally scheduled to receive.   

The return of funds is based upon the premise that students earn their financial aid in proportion to the amount of time in which they are enrolled. A pro-rated schedule is used to determine the amount of federal student aid funds s/he will have earned at the time of the withdrawal. Thus, a student who withdraws in the second week of classes has earned less of his/her financial aid than a student who withdraws in the seventh week.  

For example:  A student withdrawing from classes after 25% of the semester, the student has “earned” 25% of his/her Pell, SEOG, and/or Direct Loans for the semester. 

Norwalk Community College runs biweekly reports to see which students have withdrawn and may be subject to the R2T4 calculation. We inform these students in writing of their rights and responsibilities. In some cases, students have to repay financial aid funds to the federal government. The Financial Aid Office must determine the amount of aid that was earned and how much was unearned; the unearned aid is returned to the U.S. Department of Education by NCC on your behalf. NCC is required to recalculate Title IV Funds within 30 days from the date of withdrawal. In the event that funds need to be returned, NCC is required to return funds within 45 days from the date of withdrawal. 

If students withdraw after “earning” 60% (or more) of the semester, then students are considered to have “earned” ALL of their federal aid funds for the semester. No repayment back to the federal government is necessary. 

If you stay officially enrolled in courses but do not earn a grade for any of them, you may be considered an “unofficial withdraw.” At the end of the semester, Norwalk Community College runs a report to identify possible “unofficial withdrawals.”  An R2T4 calculation is performed based on the last day of participation or if the student never attended, financial aid disbursed is refunded back to the corresponding federal programs. 

Order of Return of Student Financial Aid Program Funds 

Funds credited to outstanding loan balances for the payment period of enrollment, for which a return of funds is required, must be returned in the following order (not to exceed the original enrollment from each source): 

  • Unsubsidized Direct loans 
  • Subsidized Direct loans 
  • Federal Pell Grants for the payment period for which a return of funds is required 
  • Federal Supplemental Educational Opportunity Grants (FSEOG) for the payment period for which a return of funds is required 

If a student does not begin attendance in all of his/her classes, the school must recalculate the student’s awards based on the lower enrollment status. For instance, a student registers for a full-time course load (15 credits) but only begins attendance in three classes (9 credits); in this case the student’s awards must be recalculated based on the lower enrollment status (9 credits). 

If you have a job on campus through Federal Work Study, you MUST stop working if at any time you fall below 6 credits. You are still entitled to be paid for time worked until the point you drop under 6 credits of enrollment. 

If you have a Federal Direct loan, and you drop to under 6 credits of enrollment, you will be considered less-than-half-time and your six month grace period will begin.  You will also be required to complete Loan Exit Counseling. 


If you did not receive all of the funds that you earned prior to your date of withdrawal, you may be due a Post-Withdrawal Disbursement. If your Post-Withdrawal Disbursement includes loan funds, Norwalk Community College must get your authorization before Direct Loan funds can be disbursed. You may choose to decline some or all of the loan proceeds to minimize your Direct Loan indebtedness. Norwalk Community College may automatically use all or a portion of your Post-Withdrawal Disbursement grant funds for tuition, fees, and book charges. If you have any questions about this policy, please email NK-FinAid@norwalk.edu or call 203.857.7023. 

Disclaimer – Descriptions of financial aid programs are subject to change, due to possible changes in federal, state, and College policies, and/or due to changes in funding levels. The Financial Aid Services Office will make every reasonable effort to keep applicants and students aware of any such changes.