Federal Title IV funds are awarded to a student under the assumption that the student will attend seminary for the entire period for which the assistance is awarded. When a student withdraws from Luther Seminary, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive.
These policies are in effect for all federal aid recipients in the Master of Divinity, Master of Arts, Master of Theology, Doctor of Philosophy and Doctor of Ministry.
The Office of Financial Aid is required to calculate federal financial aid eligibility for students who withdraw, drop out, are dismissed, or take a leave of absence prior to completing a payment period or term. The federal Title IV financial aid programs must be recalculated when the student has not completed more than 60% of a payment period.
If the student leaves the seminary prior to completing 60% of a payment period or term, the financial aid office recalculates eligibility for Title IV funds. Recalculation is based on the percentage of earned aid using the following Return of Title IV Funds formula:
The amount of earned financial aid is calculated on a daily basis from the first day of classes. The process uses calendar rather than business days. Earned aid is determined by taking the number of days attended before enrollment ended divided by the total number of days in the term (first day of instruction until the last day of finals, excluding breaks of 5 or more days.)
Funds are returned to the appropriate federal program based on the percentage of unearned aid using the following formula:
Within 45 days from the determination of the date of withdrawal, Office of Financial Aid will calculate the amount of financial aid you have earned prior to the date the action was filed. Any aid received in excess of the earned amount is considered unearned. The unearned financial aid must be returned to the respective federal programs no later than 45 days from the determination of the date of withdrawal from Luther Seminary. The calculation is based upon only the amount of federal aid for which you were eligible.
The responsibility to repay unearned Title IV aid is shared by Luther Seminary and the student. The student may also be required to return funds based on the calculation. A student returns federal loan funds based on the terms and condition of the promissory note of the loan.
For a withdrawal to be considered an official withdrawal, a student must complete a withdrawal form or provide notification to the seminary of an intent to withdraw. A student is considered withdrawn as of the date he/she begins the withdrawal process or the date the student provides notification of the intent to withdraw, whichever is earlier. Luther Seminary offers an online form to complete this process. Link to Withdrawal Form. For forms on this page a valid student account is required.
For an unofficial withdrawal, the Registrar with query the faculty as to the last date of academic related activity. Academic related activity may include:
- Exams or quizzes
- Completion of an assignment, paper or other project
- Participating in an online discussion group
- Participating in a study group
In the event that the last date of academic related activity cannot be determined, the 50% point in the term will be used.
Note: When students fail to earn a passing grade in any class: If a student who began attendance and has not officially withdrawn or requests a leave of absence fails to earn a passing grade in at least one course offered over an entire period, the seminary must assume, for Title IV purposes, that the student has unofficially withdrawn unless the seminary can document that the student completed the period (or more than 60% of the period) based on the last date of a student’s documented academic activity.
Post-withdrawal disbursements: If a student does not receive all the funds he/she has earned, the student may be due a post-withdrawal disbursement. If the post-withdrawal disbursement includes loan funds, the seminary must get the student’s permission before it can disburse them. The student may choose to decline some or all of the loan funds so that additional debt is not incurred. Luther Seminary will send notification as soon as possible, but no later than 30 calendar days after the date that the seminary determines the student withdrew. Luther Seminary must disburse any loan funds the student accepts as soon as possible but no later than 180 days after the date the seminary determined the student withdrew. If the student does not respond within two weeks of notification the award is cancelled.
Unearned federal Title IV financial aid will be returned to the appropriate programs in the order listed below. The Title IV portion of a refund is repaid to various programs from which the funds were awarded. The repayment is allocated, using the following fixed priority:
- Direct Unsubsidized Direct Loan
- Perkins Loan (Program ended – no new awards)
- Direct PLUS Loan
As a graduate only institution the funds listed above are the only federal Title IV funds available to Luther Seminary students.
If the Title IV portion of the refund is large enough, the entire amount of an award received is first returned to the highest priority program from which an award was made. The full amounts are similarly returned.
For students selected for verification: Unless a student subject to verification has provided all required verification documents in time for the seminary to meet return deadlines, the seminary includes as Aid Disbursed or Aid That Could Have Been Disbursed in the Return calculation only those Title IV funds not subject to verification. If the student who failed to provide all required verification documents in time for the seminary to meet the Return deadline later provides those documents prior to the application verification deadline, the seminary must perform a new return calculation on all of the aid the student qualified for based on the completed verification documents and make appropriate adjustments.
Note: Because of the termination of the Federal Perkins Loan program and being a graduate only institution, Luther Seminary only makes non-need based federal aid available, thus going forward with a few exceptions students are not required to complete verification.
Leave of Absence Policy
A leave of absence (LOA) is a temporary interruption in a student’s program of study. A LOA cannot exceed 180 days in any 12 month period and may have an impact on a student’s financial aid. Any student considering a LOA that received financial federal financial aid, should consult with the Office of Financial Aid to determine how their financial aid will be affected.
A LOA must meet the following criteria to be considered an approved LOA for federal Title IV purposes.
- The student must request the LOA following the policies outlined in the seminary academic catalog which includes the reason for the student’s request.
- There must be a reasonable expectation that the student will return from the LOA.
- The school must approve the student’s request for an LOA in accordance with the school’s policy.
- A student returning from an approved LOA must resume training at the same point in the academic program that he or she began the LOA.
- The seminary may not assess the student any additional institutional charges, the student’s need may not increase, therefore, the student is not eligible for any additional Federal Student Aid.
- The LOA together with any additional leaves of absence must not exceed a total of 180 days in any 12-month period.
- If the student is a Title IV recipient, the seminary must explain the requirements and regulations of his or her financial aid status prior to granting the LOA. The information that will be provided will include the financial consequences if the student fails to return from LOA.
A student granted a LOA is not to be considered withdrawn and no return of Title IV calculation is required.
Failure to return from a LOA or meet the above criteria. If a student does not return to Luther at the expiration of an approved LOA (or a student takes an unapproved LOA), the student’s withdrawal date is the date the student began the LOA. Because a student who is granted an approved LOA remains in an in-school status for Title IV loan repayment purposes, the seminary must report to the loan holder the student’s change in enrollment status as of the withdrawal date.