When a recipient of financial aid goes on a leave of absence or withdraws, the Student Financial Services Office calculates the amount of financial aid that has been "earned" prior to the effective leave/withdrawal date. Any federal Title IV aid received in excess of the amount earned is considered to be "unearned," and must be returned to the federal program from which it was awarded. This return of unearned aid is jointly shared by UCLA, as a part of the tuition and fee refund policy, and by the student.

The amount of financial aid that has been earned is determined by calculating the number of days attended before the leave/withdrawal date divided by the total number of days in the term (first day of classes until the last day of finals, excluding breaks of greater than five days). If 61% of the term has been reached, a return of unearned aid is no longer calculated. Once the earned and unearned percentages are calculated, the dollar amount of "unearned" federal Title IV aid is determined. Federal aid includes the Direct Subsidized and Unsubsidized, and Graduate PLUS Loans, and Perkins Loan.

In almost all instances, the amount of the tuition and fee refund will be less than the amount that must be returned as "unearned" aid. A portion of this "unearned" aid is paid back by UCLA during the tuition and fee refund procedure, since the repayment by UCLA of the refund amount is first credited toward the total federal aid awarded for the same time period. If the refund amount is less than the calculation of the "unearned" aid, the student is responsible for paying the difference between the amount of the refund and the total "unearned" aid calculation.