How an Approved Leave of Absence Affects Federal Student Aid

An approved leave of absence pauses your enrollment without triggering a withdrawal, which keeps your federal student aid and loans in their current in-school status while you are away. Your six-month grace period does not start, no payments come due, and you return to your program where you left off. But the protection only holds if your school’s policy and your written request meet a specific set of federal conditions, and if you come back within 180 days.¹

What Makes a Leave “Approved” Under Federal Rules

Federal regulations set seven conditions, and every one has to be met. Miss any single condition and the school is required to treat you as withdrawn, with all the financial consequences that carries.

Your school must have a formal, published leave-of-absence policy in place before anyone can request one.
You must submit a written, signed, and dated request stating your reason before the leave begins. If something unexpected prevents that (a medical emergency, for example), the school can approve it after the fact, document the decision, and collect your written request later.
The school must determine you have a reasonable expectation of returning to finish your program.
The school cannot charge you additional institutional charges during the leave.
Your combined approved leaves cannot exceed 180 days in any 12-month period. That count includes weekends and scheduled breaks.
When you come back, the school must let you resume your coursework rather than repeat what you already started. Clock-hour, non-term credit-hour, and subscription-based programs are exempt from this specific requirement.
If you have federal student loans, the school must explain, before granting the leave, how failing to return could affect your repayment terms, including the possibility of losing some or all of your grace period.¹

How to Submit Your Request

The federal requirement is minimal: a written, signed, and dated document that states why you need the leave.¹ You don’t have to attach medical records, military orders, or other supporting documents to satisfy Department of Education rules, though your school’s own policy may ask for more depending on the reason.² Check with your financial aid office or registrar to find out exactly what your institution wants.

Include your full name, student ID, contact information, and specific start and end dates. Be precise with the dates, because they determine whether you stay within the 180-day cap. Most schools accept requests through secure online portals, which timestamps your submission automatically. Federal rules allow electronic signatures if the school’s system has reasonable safeguards against fraud.³ If you submit on paper, send it by certified mail or deliver it in person so you have proof. Follow up to confirm receipt and ask when to expect a decision.

What Happens to Your Aid While You’re Away

The main benefit of an approved leave is that your federal student loans stay in in-school status. Your six-month grace period does not start counting down, and no payments come due.¹ That grace period is the six-month window after you leave school before repayment begins on Direct Subsidized and Unsubsidized Loans.⁴

Interest depends on your loan type. Direct Subsidized Loans do not accrue interest during in-school deferment. Direct Unsubsidized Loans and PLUS Loans do accrue interest while you’re away, and that interest will capitalize (get added to your principal balance) once repayment starts.⁵ The pause on payments is not a pause on cost for unsubsidized borrowers.

Different types of federal aid follow different disbursement rules during a leave. Your school can still release Pell Grant, TEACH Grant, and FSEOG funds while you’re away. Federal Work-Study compensation can be paid out for hours you worked before the leave began. The school is prohibited, however, from disbursing Direct Loan funds during the leave.⁶ If a second loan disbursement was scheduled for mid-semester, it will be held until you return.

Coming Back

For most programs, you resume at the exact point in the curriculum where you stopped. If you were halfway through a course when the leave began, the school has to let you finish it rather than start it over. If the school makes you repeat coursework, the leave no longer meets the federal definition of approved, and you must be treated as having withdrawn.¹

Clock-hour, non-term credit-hour, and subscription-based programs work differently. In those, it doesn’t matter whether you return to the same course or start a new one within the program, as long as there are no additional charges and you complete the required hours or credits for the payment period.⁷

A leave does not reset your Satisfactory Academic Progress standing. If you were on academic probation or had a low completion rate before the leave, that status will still be there when you return. Time off doesn’t improve your GPA or your ratio of completed credits to attempted credits.

If You Don’t Return

This is where things get expensive. If you fail to resume attendance by the end of your approved leave, the school must report you as withdrawn, and the withdrawal date is backdated to the day the leave began, not the day you were supposed to return.¹ That backdating drives everything that follows.

Your six-month grace period is recalculated as having started the day the leave began. If your leave ran the full 180 days, the grace period has already been running for six months by the time the school processes the withdrawal, so repayment can begin almost immediately with little or no grace remaining.¹

The school must also perform a Return of Title IV Funds calculation using the backdated withdrawal date. Federal aid is earned proportionally: if you completed 30% of the payment period before your leave started, you earned 30% of your aid and the remaining 70% is unearned. Anyone who completed less than 60% of the payment period will have unearned funds that must be returned to the Department of Education.⁷ The school returns its share first, but you may owe a portion, and that obligation stays with you.

The same consequences apply if the leave didn’t meet federal requirements to begin with. If the school missed a required condition, or your total leave exceeded 180 cumulative days in a 12-month period, the leave is treated as unapproved and you are processed as a withdrawal from day one of the absence.⁷

TEACH Grant Recipients: One Important Boundary

If you received TEACH Grant funds, an approved leave of absence does not by itself pause your eight-year service obligation. The service clock keeps running. You can request a separate suspension if your reason for the leave falls into specific categories, including a condition qualifying for leave under the Family and Medical Leave Act, a call to active military duty, or residing in a federally declared major disaster area.⁸ FMLA-based suspensions are granted in one-year increments and capped at three years total. Apply before any of the conditions that would convert your grant into an unsubsidized loan take effect, not after you’re already behind on the service requirement.

1
eCFR. 34 CFR 668.22 – Treatment of Title IV Funds When a Student Withdraws
2
Federal Student Aid. 2024-2025 Federal Student Aid Handbook – Volume 5 – Chapter 1 – General Requirements for Withdrawals and the Return of Title IV Funds
3
Federal Student Aid. 2024-2025 Federal Student Aid Handbook – Record Keeping, Privacy, and Electronic Processes
4
eCFR. 34 CFR 685.207 – Obligation to Repay
5
Federal Student Aid. Student Loan Deferment
6
Federal Student Aid. 2025-2026 Federal Student Aid Handbook – Disbursing Title IV Funds
7
Federal Student Aid. 2025-2026 Federal Student Aid Handbook – Volume 5 – Chapter 1 – General Requirements for Withdrawals and the Return of Title IV Funds
8
eCFR. 34 CFR 686.41 – Periods of Suspension