Withdrawing for serious illness, what happens now re Financial Aid already received?

Paying for College
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<p>(i have also posted this on the Parents Forum as, although this is largely a question about Financial Aid, I am hoping to hear of other people's experiences when their D or S withdrew for health reasons.)</p>

<p>My D started her Freshman year last August at an 'out of state' university. She did really well the first semester, finishing it with a 3.9 GPA.
Unfortunately she had to take a leave of absence in February due to needing treatment for an eating disorder. She had been seeing a Nutrionist, Doctor and Therapist on campus, all of whom had considerable experience in ED's and it was on their advice that she agreed to take a leave of absence to get treatment. We absolutely supported this decision.</p>

<p>She entered a residential treatment program in late February. Before she made her definite descision, she and her dad and I met with Student Support to discuss what was involved in her withdrawing from classes and taking this break. D stressed that her intention was to hopefully return this Fall, having completed treatment and being in good health.</p>

<p>About 6 weeks ago, the university contacted her via email to ask what her intentions were for the Fall. D set up an appointment over the phone and discussed the situation with an Advisor. He asked what her intention was ( she saud to return) and what they could do to make the return process go smoothly. D said that her return would be dependent on her being in good health, on her getting enough Financial Aid again, and on her getting housing since she is out of state.</p>

<p>However, D is still in a treatment program and it is clear that she will not be well enough to now return in August. She has made the decision to take the Fall off and, depending on what level of treatment she is at, to possibly get a part-time job whilst she completes treatment as an Out Patient. Another possibility she is considering is to register at CUNY and take one or a few classes there.</p>

<p>She has decided though, that she does not want to return to her current university at all. It is a huge school, and she feels that even if she is doing well when she goes back, she will find the campus and student life triggering. It is 3 hours away from home and although these were 2 factors that she liked about the university initially, she feels she would do better staying closer to home and to her 'support team'. She is considering applying (possibly for the Spring semester) to a university with a much smaller campus and one that is in a city so that she has easier access to treatment and can also have a life off campus.</p>

<p>All these possibilities are, of course, dependent on her health at the time. The only thing she knows for sure right now is that she will not return to the current school. Will her withdrawal from her current school impact her being accepted at another school in the future?</p>

<p>Does anyone have any experience of this kind of situation, and of what happens now regarding Financial Aid when a student withdraws from the school completely? She will be notifying the university in the next day or so, but we are wondering if we should contact the school first to explain the situation. We are not 100% clear on what happens now regarding the Financial Aid package that she received for the Freshman year. Does it become repayable immediately? Or are we given time to make payments considering she is still unwell and still in treatment? Can any of it eventually be ''transferred' to another school in the future?
She had received a lot of Financial Aid for this last year, including Stafford loan, Pell grant and Parent Plus loan and more.</p>

<p>Any thoughts or advice would greatly be appreciated!</p>

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<p>The number ONE priority is your daughter’s well being, and you are clearly understanding of that. Everything else is secondary…and will sort itself out when needed. </p>

<p>I believe her student loans will come due. She will exceed the six month grace period. However, she can do income based repayment…and if she has very low income, her payments will be lower also. She needs to apply for this with her loan Servicer, I believe.</p>

<p>Your Plus Loans will also exceed their grace period for repayment, and I believe you will need to start paying on those loans.</p>

<p>The Pell Grant is a grant. She shouldn’t have to repay the first semester back at all. She completed that term. I’m not sure what the status would be of her second term Pell Grant. Was it disbursed to her account? How much of that term did she complete before withdrawing?</p>

<p>Need based financial aid is applied for annually. She will need to apply for need based aid in subsequent years. If she goes to a different school, she will need to apply to THAT school for aid. Aid doesn’t transfer from school to school.</p>

<p>However, if she is eligible for a Pell Grant, she would get that same Pell regardless of the school she attends. The Direct Loan amount is the same as well. ($5500 for a freshman). The amount subsidized might vary depending on the school. </p>

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<p>Thanks so much for the helpful reply, I really appreciate it! </p>

<p>Re: the Pell Grant…she completed about 6 or 7 weeks of the Spring semester, I believe. It was disbursed to her account, yes. Does this mean that part of it may need repaying? </p>

<p>It is pretty much decided now that my D will apply to a state school within the city that we live in and be a day student, at least for the next year. She plans to apply for this fall semester, either as a full-time or part-time student; she is hoping to attend full-time and tells me she would do 4 classes which would be 12 credits. Alternatively, if she can only do 2 classes part-time, she would 6 credits. </p>

<p>Would this plan change anything with her financial aid situation? Loans taken out at her first university will reach the 6 mark grace period in late July, I believe. So they would become due, and we will negotiate either an extension of time or a payment plan, but would this have any effect on her getting grants in August for the city state school or community college? </p>

<p>If she takes 3 classes, with 9 credits, does that help defer payments, would she be considered a full-time student? </p>

<p>Also, since she only completed one full semester as a Freshman, I assume she will apply as a Freshman; would she then become a Sophmore in the spring semester, or does it depend on how many credits she has in December? </p>

<p>Another question, but along similar lines - my S is a Senior and is taking this fall semester off
to get work experience in his field of study. He has had internships throughout college, some paying, but all really good ones with regards to experience. He was offered a really good full-time job over the summer, which he started in late May right after finals, and having just been given a promotion, he intends to stay in the job until late November. </p>

<p>He cannot get credits for it, and although he will be back in school in for the spring semester to graduate, he is not registered for classes this fall, so will his loans become repayable too? He only needs 6 more
Credits to graduate. </p>

<p>The 6 month grace period, is that including the summer months, so mid-May through mid-November would his 6 months? He can register for Spring classes in October, so I’m wondering if, as long as he is registered, he would be considered ‘in school’ at the time of registration? Would that keep him within the 6 month period and mean that his loans would not be due? </p>

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<p>If the Pell grant or any of her loans must be repaid, the school was supposed to have notified your D of a Return of Title IV Funds within 90 days of withdrawal. It is possible that they may have sent the notification to her school email address. If this is the case, she would show a current balance. You (if your D has filed a FERPA release so the school will talk to you about her balance) should call and find out for sure.</p>

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<p>And yes, your son’s loans will go into repayment six months after his last day in school. They cannot be deferred again until his first day of class.</p>

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<p>Thanks for the replies, Kelsmom. My D has not notified the previous school yet, as Her decision only became 100% definite in the last couple of days, but she will be doing so. </p>

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<p>She withdrew from the semester, correct? The amount of money she may owe should already have been determined based on the date she withdrew from the semester. </p>

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<p>Ok- I see what you mean. Yes, she withdrew for the remainder of the spring semester. Thanks @Kelsmom.
Re my son- if he has to start making payments on his loans mid November, 6 months from his last day in school, what then happens when he is back in school in January for his final semester? Are the repayments then stopped until they become due anyway 6 month’s after graduation? . </p>

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<p>You should definitely check to make sure your daughter does not have a balance.</p>

<p>Your son should contact his servicer to let them know the date he will be returning to school, so his loans can be put back into deferment at that time. They will be deferred while he is in school, but the next time they go into repayment the payments will be due as soon as he leaves school - there is only one 6 month grace period for a loan, so once it’s used, it’s gone.</p>

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<p><a href=“http://ifap.ed.gov/fsahandbook/attachments/1415FSAHbkVol5Ch1.pdf”>http://ifap.ed.gov/fsahandbook/attachments/1415FSAHbkVol5Ch1.pdf&lt;/a&gt;&lt;/p&gt;

<p>This is a very long document with a worksheet at the end, for universities, regarding how to handle federal funds when a student withdraws. The university can handle its own institutional grants and other funds any way it pleases, but is required to conform to these federal guidelines with federal money.</p>

<p>Your university should have a page somewhere on its site that explains how they specifically handle things to conform to the guidelines that should be clear and MUCH shorter than the above document.</p>

<p>If I am understanding it correctly, big if, the calculation is made of %age of semester attended before withdrawal. That is the percentage of federal aid earned, up until 60% of semester, at which point you are considered to have earned 100% of it. If it’s less than 60%, they compare amount earned to amount disbursed. The university either pays back any overpayment to the government, or disburses remainder owed to student. In particular, the university must pay back any loan disbursements that are unearned, loans taking priority over grants in unearned money according to a specific schedule(see pg 94). Student’s loans are then reduced and student owes that money to the university directly, in addition to any grant money the university repays to government. </p>

<p>Also, part of the money due the government may be due directly from student, in the calculations. If so, school is required to notify student within 30 days of its determination and student must take some action on that within 45 days of schools notification or lose future eligibility for Title IV funds.</p>

<p>If the university expects student to return in <180 days, they can place student on LOA and not do the return calculations/repayments unless/until the student fails to return to school after 180 days. But the LOA policy has to conform to very particular guidelines in terms of what the university can charge money for in order for student to complete term when they come back (basically no charges). So I don’t know whether universities would often do that.</p>