Federal Financial Aid Refund & Withdrawal Facts

Bowling Green State University (BGSU) students who receive federal financial aid and do not complete their classes may be responsible to repay a portion of the aid received according to federal law. Student Financial Aid (SFA) is supplying the following information to help you better understand what could happen if you withdraw or stop attending classes before the end of the enrollment period.

As part of the Higher Education Amendments of 1998, Congress passed new regulations governing what must happen to your federal financial aid if you completely withdraw from your courses during the enrollment period. BGSU must calculate how much federal financial aid you have earned if you withdraw or stop attending before completing 60% of the enrollment period. Federal financial aid covered under this regulation includes the Federal Pell Grant, Federal SEOG, Federal Direct Subsidized Loan, Federal Direct Unsubsidized Loan, Federal Perkins Loan, and Federal Parent Loan for Undergraduate Students (PLUS).

This regulation applies to students who receive federal financial aid and who withdraw or stop attending classes before completing 60% of the enrollment period.

If you receive federal financial aid you must "earn" the aid received by staying enrolled in school. The amount of federal financial aid assistance you earn is determined on a pro-rata basis. If you withdraw or stop attending classes during the enrollment period, you may be required to return some of the financial aid you were awarded. For example, if you complete 30 percent of the semester, you earn 30 percent of the aid you originally were scheduled to receive. This means that 70 percent of your scheduled awards remain unearned and must be returned to the federal government.

The following formula is used to determine unearned aid that has to be returned:

Percent earned = number of calendar days completed up to the withdrawal date divided by total calendar days in the payment period (less any scheduled breaks that are at least 5 days long)

Percent unearned = 100 percent minus percent earned

When you reduce your enrollment to zero credit hours, you have withdrawn from BGSU. Instructions for completing the withdrawal process can be found in the Undergraduate Catalog and by consulting with your academic advisor. If you complete the official withdrawal process, the refund calculation will be based on the date your withdrawal activity is recorded in the BGSU Student Information System by your academic advisor, unit, department, or college. If you do not officially withdraw, but it is determined that you stopped participating in all of your classes, the calculation is based on either the date reported by your instructor(s) as your last date of participation or the last date for which the instructor(s) determines that there is evidence that you were still participating in class, e.g., completed an assignment, took an exam, etc.

The timing of your decision to withdraw should not be based on the impact to your financial aid. You should contact your Academic Advisor and/or College Office to discuss the reason(s) for your decision to withdraw as well as the academic consequences of your decision. Any required adjustments to your financial aid will be based on the withdrawal date as described above. Student Financial Aid cannot perform the withdrawal calculations until your withdrawal date is determined by your academic advisor, unit, department, or college.

BGSU and the student are both responsible for returning unearned funds to the appropriate programs in specific loan/grant order up to the total disbursement from each source.  The order is: unsubsidized direct loan, subsidized direct loan, perkins loan, direct grad PLUS loan, direct parent PLUS loan, Pell grant, FSEOG, TEACH grant, Iraq and Afghanistan service grant. BGSU must return the lesser of:

  1. the total amount of unearned aid; OR
  2. institutional charges multiplied by the unearned percentage.

Amounts that must be returned will first be applied to federal loans and then to grants. Loan borrowers will be permitted to repay loans based on the terms of the promissory note.

The student will also be billed for any amount due to BGSU resulting from BGSU’s return of federal aid funds. For example, if BGSU is required to return federal aid which was used to pay a portion of your charges for the enrollment period, you are required to pay BGSU for the unpaid portion of the charges.

If you owe any money to BGSU resulting from the return of federal funds, you will receive a bill from the BGSU Bursar's Office.

For all outstanding charges owed to BGSU, you must make payment arrangements with the Bursar’s Office, (419) 372-2815. Loan repayment arrangements may be made by contacting your Federal Loan Servicer.

If you do not repay BGSU for the charges resulting from the federal refund policy, your records will be placed on financial hold. This means you will not be permitted to register for classes or receive transcripts until the balance is paid. Outstanding balances due to BGSU can also result in collection agency action and negative credit bureau reporting.

To encourage the completion of degree/certificate programs within a reasonable time frame and to comply with federal requirements, financial aid recipients must maintain satisfactory academic progress as a condition for receiving financial aid. Satisfactory academic progress requires financial aid recipients to do the following:

  1. Meet minimum cumulative grade point averages listed below;
  2. Satisfactorily complete at least 67% of cumulative credit hours attempted and
  3. Complete the degree/certificate program within the maximum attempted hours listed below.

Financial aid recipients who do not meet these conditions will lose their financial aid eligibility. Therefore, withdrawing may affect the status of your satisfactory academic progress.

The following example illustrates how the federal refund policy would affect a student who withdraws from classes at BGSU:

Student is attending Fall Semester which is 117 calendar days in length.

Financial Aid: Pell Grant


Direct Subsidized Loan


Total Financial Aid Award


Tuition & Fees


Financial Aid disbursed to student after Tuition and Fees are paid $3,419

Student withdraws on the 24th day of the semester, which is the fourth week (40% period). Consult Undergraduate Catalog for BGSU Institutional Refund Policy.

Percent of federal financial aid earned:

Completed days


Total days


Percentage earned


Amount of federal financial aid earned:

Percentage earned


Aid awarded


Aid earned


Amount of federal aid to be returned :

Aid awarded


Aid earned


Unearned aid to be returned


Of the $4,006.80 that needs to be returned to the Dept. of Education:

BGSU returns
(79.5% of institutional charges)


Student returns


BGSU would return $1,288.70 to the Direct Loan Program. The student would return $2,101.30 to the Direct Loan Program, under normal repayment terms. The amount to be returned to grants are reduced by 50% , so the student would return $308.40 (616.80 - 50%) to the Pell Grant Program.

Since BGSU had to return financial aid funds used to cover tuition & fees, the student also will be billed by the BGSU Bursar's Office for $972.60 (60% of charged fees), $1,288.70 (unearned loan funds), and $308.40 (50% of Pell Grant). Totaling $2,569.70.

The policy and worksheet used to determine the amount federal financial aid funds that must be returned are available in the BGSU Bursar’s Office or SFA.

Updated: 02/20/2020 11:47AM