Withdrawals and Refunds Policy

Federal regulations require the use of the Return of Title IV Funds policy for all students receiving any type of federal aid, when calculating the aid a student can retain after withdrawing from college. This policy relates to Federal PELL, Federal SEOG Grants, as well as Federal Perkins, Federal Direct Stafford, and PLUS Loans. At Sterling College, the same policy will be used for state and institutional aid.

These regulations govern the return of aid disbursed for a student who completely withdraws from a term or payment period. During the first 60 percent of the period/semester, a student “earns” aid in direct proportion to the length of time he or she remains enrolled. The percentage of time that the student remained enrolled determines the percentage of disbursable aid for that period that the student earned. A student who remains enrolled beyond the 60 percent point earns all aid for the period.

Students planning to withdraw need to start at the Student Life Office and request a Withdrawal Form. Institutional charges and financial aid will be adjusted once the Withdrawal Date has been determined. For students receiving financial aid, the refund must first be repaid to the Title IV programs, state grants, and institutional funds in accordance with existing regulations in effect on the Withdrawal Date and with respect to various types of aid. It is possible that the student who withdraws will still have an outstanding balance due to the College. The Withdrawal Date is determined as follows:

Official withdrawal. The later date of when the student began the institution's official withdrawal process OR officially notified the institution of intent to withdraw.

Unofficial withdrawal. The institution will always use the student’s last day of attendance at a documented academically-related activity.

The percentage of the period that the student remained enrolled is calculated based on number of days the student was enrolled. Divide the number of days enrolled by the total days in the enrollment period. Calendar days are used including weekends, but breaks of at least five days are excluded from both the numerator and the denominator.

Students who withdraw or graduate from Sterling College will be required to complete Exit Counseling for Direct Loans and Perkins Loans before official transcripts or diplomas will be released. Direct Loan Exit Counseling can be completed at www.studentloans.gov. Perkins Loans Exit Counseling must be completed in the Financial Aid Office.

Distribution of Unearned Aid

If a student has not earned all of the federal aid received to date at the point of withdrawal, funds will be repaid in the following order:

  1. Federal Direct Unsubsidized Stafford Loan
  2. Federal Direct Subsidized Stafford Loan
  3. Federal Perkins Loan
  4. Federal Direct PLUS Loan
  5. Federal PELL Grant
  6. Federal SEOG Grant
  7. Federal TEACH Grant
  8. State grant and scholarship funds
  9. Institutional Aid


In the event a student has received funds for living expenses and an overpayment occurs, Sterling College will notify the student of the overpayment. It is the student’s responsibility to return the overpayment to the proper federal program. Students who fail to repay overpayment will not be eligible for additional federal financial aid funds, at any institution, until the overpayment has been satisfied. Examples of the application of the refund policy are available to students upon request by contacting the Financial Aid Office.

Post Withdrawal Disbursement

If a student received less federal student aid than the amount earned, Sterling College will offer the student a Post Withdrawal Disbursement (PWD) within 30 days of the date of determination that the student withdrew. The student will be given 14 days from the post marked date of the letter to respond to Sterling as to whether or not he or she wishes to receive the funds.

The PWD notice will:

  1. Inform the student, (or parent for a parent PLUS loan), of their eligibility for a post withdrawal disbursement;
  2. Identify the type and amount of the funds available to credit to the student’s account and give the student, or parent for a parent PLUS loan, the option to accept or decline all or a portion of the funds;
  3. Explain to the student, (or parent for a parent PLUS loan), the obligation to repay loan funds;
  4. Give the student or parent 14 days from the post marked dated of the letter to respond; and
  5. Explain to the student or parent that if a response is not received within 14 days of the post marked date of the letter, Sterling College will not complete the PWD nor disburse the loan funds to the student or parent. After the College has completed the post-withdrawal loan notification and receives confirmation from the student or parent affirming their desire to receive the PWD of loan funds, the funds will be credited to the student’s account and applied against current charges as soon as possible, but no later than 180 days after the last date of attendance during the term which the student withdrew.

Sterling will disburse grant funds before loan funds. The College is not required to obtain confirmation from the student before processing a PWD of Title IV grant funds.

Confirmation from a student, (or parent for a parent PLUS loan), must be received before any disbursement of loan funds from a PWD.

Sterling will not disburse post withdrawal loan funds if the student declines the funds or fails to respond within the established timeframe.