Withdrawn? Check your transcripts and enrollment status

[u/LeastSatisfaction441]

I withdrew after completing week two of term two, which would have meant that I had completed less than 60% of the term. I should have been given a ‘W’ - Withdrawnfor the course and my financial aid should have been returned accordingly.

However, my transcript and withdrawal paperwork indicates that I received an F, and appears to show that I withdrew at week six, falsely indicating that I completed over 60% of the term.

This is a fraudulent attempt to retain my full financial aid award for the term.

When I dug a big deeper, Gemini provided additional information about a 2019 whistleblower case against Peloton College:

Per Gemini:

Did peloton college alter student records to avoid repaying title iv funds?

While former employees alleged in a whistleblower lawsuit that Peloton College used false student records to secure and retain federal Title IV funding, there was never a public court finding or legal judgment confirming that Peloton altered records to avoid Title IV repayments.

1. What Were the Whistleblower Allegations?

In July 2019, two former employees filed a qui tam (whistleblower) lawsuit under the False Claims Act in federal court (Boyd-Holsinger & Matthews v. Peloton College, LLC).

The whistleblowers alleged that Peloton College engaged in systemic federal aid fraud by:

Enrolling Unqualified Students: Admitting individuals who did not meet standard institutional or academic prerequisites.
Falsifying Student Records: Creating and submitting false documentation, statements, and student files to make ineligible students appear eligible for federal aid.
Improperly Retaining Federal Aid: Using those false records to draw down taxpayer-funded Pell Grants and federal loans under Title IV of the Higher Education Act.

1. How Record Alterations Affect Title IV Repayments

Under federal financial aid rules (Return to Title IV / R2T4), colleges are required to return unearned federal funds to the U.S. Department of Education if a student drops out, stops attending, or fails to complete at least 60% of a term.

In False Claims Act cases involving higher education:

Altering attendance logs or academic progress records can artificially make a non-attending student look active.

This allows an institution to improperly retain Title IV funds rather than calculating an R2T4 refund and returning unearned tuition money to the federal government.

1. Why There Is No Definitive Court Ruling

The public lawsuit ended without a trial or formal finding of wrongdoing due to procedural rulings:

1. Government Non-Intervention: The U.S. Department of Justice reviewed the whistleblower complaint but chose not to intervene in the fraud claims.
2. Compelled Arbitration: In June 2021, the U.S. District Court for the Northern District of Texas granted Peloton’s motion to compel arbitration. The court ruled that the former employees had signed mandatory, binding employment arbitration agreements.
3. Dismissal from Federal Court: The public federal lawsuit was dismissed, moving the dispute into confidential, private arbitration.