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Receiving Aid

Federal Refund and Repayment (Withdraw Reduction) Policy

The policy below explains how financial aid may be adjusted when students withdraw from all their classes for a term after receiving financial aid for that term. The following additonal policy links may also be helpful:

TU Financial Aid Refund & Repayment (Withdraw Reduction) Policy

When a student completely withdraws from Towson University while receiving Federal Title IV aid or university need-based grant funds, the Office of Financial Aid must determine what portion of the student’s term aid (not including Federal Work-Study funds) will revert to the federal programs.  The Financial Aid Office uses a statutory federal refund formula required by the U.S. Department of Education.  In the context of this policy, the terms "refund" and "repayment" both refer to refunding or repaying federal aid funds back to the U.S. Department of Education.

The statutory federal refund formula requires the Financial Aid Office to determine what portion of aid disbursed for the term has been “earned” and what portion is considered to be “unearned.”

Calculation of Title IV assistance earned: The university must first determine the percentage of assistance earned by the student for a term.  Up through the 60 percent point in time, the percentage of assistance earned is equal to the percentage of the term completed as of the day the student withdraws.  If the withdrawal occurs after the 60 percent point, the percentage of aid earned is 100 percent.

Calculation of Title IV assistance not earned: The amount of aid not earned by the student is calculated by determining the complement of the percentage of assistance the student earned.  That percentage is then applied to the total amount of grant and loan assistance that was disbursed for the term. 

Differences between amounts earned and amounts received: If the student has received more grant or loan assistance than the amount earned, the unearned funds must be returned to the Title IV programs by the university or the student, or both.

Responsibility of the school: Towson University must return to the Title IV programs the lesser of the following:

  • The unearned amount of Title IV assistance; or

  • The institutional* charges incurred for the term, multiplied by the unearned percentage of Title IV grant and loan assistance. 


Responsibility of the student: The student returns unearned Title IV assistance minus the amount the university returns.  The U.S. Department of Education does not allow discretion on the part of the university for non-institutional costs.  In most cases, when a student receives Title IV assistance greater than the amount of institutional charges, and completely withdraws from the university, he or she will have to return some of those federal funds.

Special Rules:

  • When a student (or parent in the case of PLUS Loans) is required to return a portion or all of loan proceeds, the calculated amount will be repaid according to the original terms of the loan(s). 
  • In addition, the U.S. Department of Education recognizes that the most needy students have only limited resources to meet up-front expenses.  Therefore, a student who must return grant funds himself or herself (rather than the school), is given an additional consideration: the student’s grant repayment is reduced by half.

*University charges are limited to tuition, fees, and room and board charges (if paid to the university).

Financial Aid Office
Enrollment Services, Room 339
Hours: Monday - Thursday, 8 a.m. - 5 p.m.; Friday, 8 a.m. - 4:30 p.m. (Reception Desk)
            Monday - Thursday, 8:30 a.m. - 5 p.m.; Friday, 8:30 a.m. - 4:30 p.m. (Financial Aid Call Center)

Phone: 410-704-4236
Fax: 410-704-2584




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