A tuition refund policy is a career school's written rule for how much of the tuition and fees a student gets back after cancelling enrollment or withdrawing. States set minimums for the private career, trade and vocational schools they license. California, for example, requires a full refund less up to $250 if the student cancels by the first class or the seventh day after enrollment, a pro rata refund for a student who withdraws having completed 60% or less of the period, and payment within 45 days. A school in the federal aid programs must disclose its refund policy, and runs the Return of Title IV Funds calculation before applying it.
What is a tuition refund policy?
It is the rule, published in the catalog and the enrollment agreement, that decides what a student owes and what comes back when they cancel before the program starts or withdraw partway through. For a private career, trade or vocational school, the minimum terms usually come from the state agency that licenses it. Accreditors can add their own. The school may be more generous than the minimum, never less.
Who requires a career school to have one?
- The state licensing agency. California's Private Postsecondary Education Act, for example, requires every school it approves to have a refund policy for unearned institutional charges (Education Code 94920(d)), and the regulations say a school may not enforce any refund policy that isn't in its catalog (5 CCR 71750(a)).
- The federal aid programs. A school in the Title IV programs must make readily available to students any refund policy it is required to follow for unearned tuition and fees, its withdrawal procedures, and a summary of the Return of Title IV Funds rules (34 CFR 668.43(a)).
What does a state refund rule look like?
California's, as an example of what a state sets for the schools the BPPE approves:
| Situation | California's minimum |
|---|---|
| Cancels by the first class session or the seventh day after enrollment, whichever is later | 100% of institutional charges paid, less a deposit or application fee of up to $250 (Education Code 94919(d), 94920(b)) |
| Withdraws having completed 60% or less of the period of attendance | Pro rata refund (Education Code 94919(c), 94920(d)) |
| Timing | Paid or credited within 45 days (Education Code 94920(e)) |
| Notice | Cancellation in writing. Withdrawal by written notice or by conduct, such as not attending (Education Code 94920(a)) |
| Waiver | A student may not waive these rules (Education Code 94922) |
Other states set their own percentages, dates and deadlines. Read your own state agency's rule, not another state's.
How is a pro rata refund worked out?
California's regulation spells it out (5 CCR 71751(a)(3)). Take the daily or hourly charge (institutional charges less nonrefundable charges, divided by the days or hours in the program), multiply it by the days or hours attended, and subtract that and any nonrefundable charges from what the student paid. Scheduled hours the student missed before their last day count as attended.
An illustration on a $14,800, 1,200-hour program, under California's formula, with no nonrefundable charges:
| Amount | |
|---|---|
| Hourly charge ($14,800 ÷ 1,200) | $12.33 |
| Hours attended before withdrawal | 300 (25% of the program) |
| Owed for hours attended (300 × $14,800 ÷ 1,200) | $3,700.00 |
| Paid so far ($1,500 deposit + 3 × $1,108.33) | $4,824.99 |
| Refund due | $1,124.99 |
Only a deposit or application fee of up to $250 and amounts for educational materials can be kept as nonrefundable, and only if the enrollment agreement and catalog say so (5 CCR 71751(a)(3)(B)).
What does the school have to document?
Under California's rules, the student gets a document showing the refund amount, the amount for tuition and each other itemized charge, the method used, the date and who it was sent to. The school also keeps a monthly log of all cancellations and withdrawals with refund amounts (5 CCR 71750(c)–(d), 71751(c)–(d), 71920(b)(10)). Money collected for a third party, like a license or exam fee, that hasn't been paid over yet goes back within 45 days (5 CCR 71751(b)).
How does the refund policy relate to R2T4?
They answer different questions. The R2T4 calculation decides how much federal aid a withdrawing student earned and what goes back to the aid programs. The refund policy decides what the student still owes the school. The FSA Handbook says the R2T4 rules do not dictate an institutional refund policy, and that a school, state or agency refund policy determines the charges a student owes after withdrawing without changing the aid earned.
The order matters. A school first performs the R2T4 calculation, then applies any applicable refund policy (state, accrediting agency or institutional) to see whether it creates a new or larger Title IV credit balance. Charges that federal aid had covered can become a balance the student owes the school.
California's Act ties the two together for schools in the aid programs: they comply with its refund article by following the federal rules, but still owe a pro rata refund of nonfederal money for students who completed 60% or less, and the full cancellation refund (Education Code 94919).
What happens to the payment plan when a student withdraws?
The student ledger is recalculated: the earned charge stays, the refund or the remaining balance is worked out, and the future installments are stopped or replaced by the new amount owed. For the steps, see Student withdraws mid-program.
General information, not legal advice. Refund rules differ by state and accreditor.
- BPPE: California Private Postsecondary Education Act of 2009, as of 1 January 2026: Education Code 94919, 94920, 94922
- BPPE: California Code of Regulations, Title 5, Division 7.5, effective 1 October 2026: sections 71750, 71751, 71920
- eCFR: 34 CFR 668.43, Institutional and programmatic information
- FSA Handbook 2026–27, Volume 5, Chapter 1: General requirements, withdrawals and the Return of Title IV Funds
Every figure on this page was checked against these sources on Oct 21, 2026. General information, not legal or tax advice.