Federal financial aid regulations state that a student who earns no passing grades in all courses for a term must be considered an unofficial withdrawal, unless the institution can document that the student engaged in some academic activity beyond the 60% point of that term. A student must be engaged in academically related activities beyond the 60% of the enrollment period to retain eligibility for federal, institutional and external financial aid. If a student was not engaged in any academically related activities beyond the 60%, they will be assigned a withdrawal date based on the last date of an academically related activity.
A student who does not earn at least 1 passing grade during a term for which federal funds were disbursed will have a Return of Title IV Funds calculation performed to determine how much of the federal funds were earned. Unearned federal funds must be returned to the source, in most cases with a charge to the student's university account.