Loan Default, Enrollment Status, and Disbursement Policy | Cleary University

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Loan Default, Enrollment Status, and Disbursement Policy

Loan Default

Students found in default of any Title IV loans or owing a Title IV refund to any college will not be eligible to receive any aid funds. Official academic transcripts will not be released to students who are found to be in default of student loans.

Enrollment Status

To participate in most aid programs, students must enroll for a minimum of six credit hours per semester in a program leading to a degree. See enrollment classifications:

Classification Credits Per Semester
Undergraduate Graduate
Full-Time 12+ credit hours 6+ credit hours
¾Time 9-11 credit hours Not applicable
½ Time 6-8 credit hours 3-5 credit hours

After 60% of the semester has passed, no credit is available.


Aid funds are posted for an eligible student once per semester when the aid file is complete, but not more than 10 days prior to the applicable semester. **Federal and State** Grants for each semester are posted to the student account after the aid file is complete and the student is registered for classes. **Institutional grants and scholarships for each semester are posted to the student account after the aid file is complete and after the first full week of class.** Loan proceeds are not posted to the student account until they are actually received from the student’s lender.

Evidence of Attendance Policy for Financial Aid Purposes

Evidence of attendance in enrolled classes is required for all University students. Satisfactory evidence of attendance is defined as fulfilling at least one of the following:

  • Discussion or participation in an on-ground or on-line classroom
  • Completing a Moodle quiz
  • Uploading an assignment in a Moodle classroom

Attendance is required for all classes in order to qualify for financial aid. Failure to meet this requirement may result in loss of eligibility for certain types of student financial aid.

Return of Title IV Funds

Federal Financial Aid Refunds – Return of Title IV Calculation.

Financial Aid Recipients: Students receiving Federal Title IV Funds (i.e. Federal Pell, SEOG, Direct or PLUS loans) may receive a reduction or cancellation of financial aid if a drop or withdrawal (official or unofficial) from all classes occurs before completing 60% of the semester. The Return of Title IV calculation is a federally mandated formula to determine how much Title IV funds are required to be returned to the federal government and how much was “earned” by the student at the time of withdraw. Financial aid adjustments will be based on a student’s last date of attendance or class participation regardless of when a completed drop/add form is received by the Records Office.

Official Withdraw – A student may withdraw after the drop/add period (usually Saturday of the second week of the semester) through the final withdrawal date of each session., (week 6 of classes being offered in an “A “or “B” session or week 13 of a 15-week semester by contacting his or her academic advisor and starting the official withdraw process.

Unofficial Withdraw – A student who leaves the University during a semester or stops attending classes without officially withdrawing will receive a failed grade from the instructor of the course(s) in question.  Effective October 29, 2010 for all programs offered in modules (sessions) a student is considered to have withdrawn for Title IV purposes if the student ceases attendance at any point prior to completing the payment period and period of enrollment. If students plan to attend a session at a later time during the same semester, they must submit written confirmation at the time of withdraw with their advisor that they plan to attend other sessions later in the semester.   If the student fails to attend at a later date in the semester, the Title IV Fund calculation will be made based on the last date the student attended or participated in the semester.  

Effective Fall of 2017, students are allowed to drop classes up through two weeks into a semester. When this occurs, all financial aid will be removed from the student’s account and returned to financial aid sources.

Return of Title IV funds will be computed using the Department of Education R2T4 approved software which calculates the number of days that the student has participated in class during the semester over the total number of days in the semester. The total number of days in the semester excludes break time and weekends. A grade of “W” will be given for any class from which the student withdraws (note a withdrawal applies on or after the second week of the semester).

Refund Distribution as Prescribed by Federal Regulation for Title IV Funds

In most cases, withdrawing from a class(s) does not guarantee a cash refund of the monies paid on the student’s account. The student may owe the government some of the money that was disbursed at the beginning of the semester. Funds returned to the federal government are used to reduce the outstanding balances in individual federal programs.

Funds must be returned you and/or your parent or the school allocated in the following order of priority within 45 days:

  1. Unsubsidized Federal Direct Loans
  2. 2. Subsidized Federal Direct Loans
  3. 3. Federal PLUS Loans
  4. 4. Federal Direct Grad PLUS
  5. 4. Federal Pell Grants
  6. 5. Federal Supplemental Educational Opportunity Grants (SEOG)
  7. 6. Other federal sources
  8. 7. Michigan Tuition Grant/Michigan Competitive Scholarships (MTG/MCS)
  9. 8. Other state, private, or institutional aid
  10. 9. The student

If the student is receiving a Pell Grant and does not begin attendance in class(s) Pell Grant funds will be adjusted for each non-attended class even if the semester has been completed. Students are not entitled to Pell Grant funding for a class that they never attended.

Post-withdrawal disbursement – A student may be eligible for a Post-withdrawal disbursement if, prior to withdrawing, the student earned more federal financial aid than was disbursed. If a student is eligible for a post-withdrawal disbursement of Title IV funds, it will be processed for the student and a refund will be issued within 14 days of a credit balance on the student’s account.

If the post-withdrawal disbursement includes loan funds, Cleary University must get student permission before it can disburse loan funding. Students may choose to decline some or all of the loan funds so that additional loan debt is not incurred.  Notice will be sent to the student and the student must respond within 14 days otherwise all loan funds will be cancelled and the student will be responsible for any charges that remain on their school billing account.

Cleary University may automatically use all or a portion of the post-withdrawal disbursement of grant funds for tuition and fees. However, if there are other expenses over and above tuition and fees, the student will need to give permission to use the post-withdrawal disbursement for other charges.

If the student does not attend any classes, all aid will be cancelled and returned to aid sources within 45 days.

To determine the amount of aid that will be returned to the federal Title IV programs, the number of days from the semester start date to the “Last date of Attendance or Class Participation” will be calculated. That number will be the numerator and the total number of days in the semester will be the denominator. The result is the percentage of federal funds that Cleary University will apply to the student’s account.

In most cases, the Financial Aid Office will return aid funds to appropriate sources as required. In the case where the student has received a refund of a Title IV Grant, such as a Pell Grant, and the calculation resulted in the student owing a repayment of their Pell Grant funds, he/she is responsible for repayment of 50% of his or her portion of the obligation.

Grant overpayments to the student are subject to either immediate repayment to the institution or a satisfactory repayment arrangement. The overpayment may also be sent directly to the Department of Education Collections department.

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