R2T4 Advanced Concepts

1. Session 23 R2T4 Advanced Concepts David Musser and Greg Martin | Nov. - Dec. 2017 U.S. Department of Education 2017 FSA Training Conference for Financial Aid Professionals

2. Agenda • Programs Offered in Modules • Withdrawal from a Program Offered in Modules • Returning After Withdrawal • Written Confirmation • Withdrawals from Competency-Based Programs • Multiple Withdrawals • Projecting Payment Periods in Non-term Credit-Hour Programs • Overlapping Payment Periods • Programs using nonstandard terms that are not substantially equal • Non-term programs when a student has an abbreviated loan period • Questions

3. Programs Offered in Modules A program is “offered in modules” if a course or courses do not span the entire length of the payment period (PP) or period of enrollment (POE). The determination of whether a program is offered in modules is made on a payment period-by-payment period or period of enrollment-by-period of enrollment basis, as appropriate, and is student specific.

4. Withdrawal from a Program Offered in Modules Q: How do I know when a student has withdrawn in a program offered using modules? A: Use the following flowchart:

5. Withdrawal from a Program Offered in Modules A student enrolled in a credit-hour program is considered to have withdrawn* if the student does not complete all the days in the payment period or period of enrollment that he or she was scheduled to complete. This includes cases where a student completes a module, but does not drop out of a future module that he or she was scheduled to attend. *Unless the student provides written confirmation that he or she intends to return in a future module under certain circumstances

6. Withdrawal from a Program Offered in Modules A student who drops all future classes between modules he or she was scheduled to attend is considered to have withdrawn. NOTE: If a student drops all future classes in a payment period or period of enrollment on the same day the student completes a module, or prior to completing the module, the student is not considered a withdrawal.

7. Withdrawal from a Program Offered in Modules The denominator of the Return of Title IV (R2T4) calculation is the total number of calendar days in the payment period or period of enrollment, including all days within the period that the student was scheduled to complete prior to ceasing attendance. • Excludes scheduled breaks of at least five consecutive days when the student is not scheduled to attend a module or other course offered during that period of time

8. Withdrawal from a Program Offered in Modules Therefore, for a student who is scheduled to complete more than one module: • If the student withdraws from or completes a module and later drops all classes in the future module(s), the total number of calendar days in the denominator will include the days in the future module(s) • If the student drops the future module(s) prior to withdrawing, the total number of calendar days in the denominator will NOT include the days in the future module(s)

9. Withdrawal from a Program Offered in Modules: Example 1 Break Module 1 Module 2 • John is scheduled for classes in both Modules 1 and 2 • He completes Module 1, but never returns for Module 2 and does not inform the school that he is leaving • The student is considered withdrawn when he does not return to Module 2, and the denominator of his R2T4 calculation will include all the days in Modules 1 and 2 • Pell must be recalculated using only classes attended in Module 1 and only the recalculated amount is included in the R2T4 calculation Does not return to attend Module 2 Completes Module 1

10. Withdrawal from a Program Offered in Modules: Example 2 Break Module 1 Module 2 • Tina is scheduled for classes in both Modules 1 and 2 • She completes Module 1, and subsequently drops all of her courses in Module 2 during the break • The student is considered withdrawn when she drops all the courses in Module 2, and the denominator of her R2T4 calculation will include all the days in Modules 1 and 2 • Pell must be recalculated using only classes attended in Module 1 and only the recalculated amount is included in the R2T4 calculation Drops all courses in Module 2 Completes Module 1

11. Withdrawal from a Program Offered in Modules: Example 3 Break Module 1 Module 2 • Bill is scheduled for classes in both Modules 1 and 2 • Three weeks before the end of Module 1, he drops all courses in Module 2. Then he completes Module 1 • The student is considered to have completed the period because he was not scheduled to attend other courses when he ceased attendance. No R2T4 calculation is required • Pell must be recalculated using only classes attended in Module 1 Drops all courses in Module 2 Completes Module 1

12. Withdrawal from a Program Offered in Modules: Example 4 Break Module 1 Module 2 • Carol is scheduled for classes in both Modules 1 and 2 • Three weeks into Module 1, she drops all of her courses in Module 2. Then, two weeks later, she withdraws from Module 1 • The student is considered withdrawn when she drops her classes in Module 1. The denominator of her R2T4 calculation will include only the days in Module 1 • Pell must be recalculated using only classes attended in Module 1 and only the recalculated amount is included in the R2T4 calculation Drops all courses in Module 2 Withdraws from Module 1

13. Returning After Withdrawal If a withdrawn student returns to the school within the same payment period or period of enrollment for a term-based program offered in modules, the student is treated as though he or she did not cease attendance and the school must “undo” the R2T4 calculation. Note: If the school awarded Pell Grant funds on the basis of classes the student did not attend, the school must recalculate the student’s Pell Grant.

14. Returning After Withdrawal: Example Module 2 Module 1 Module 3 Withdraws on Day 40 Anthony enrolls for 3 modules within a semester, each 35 days in length, and with a week in between Modules 1 & 2 and 2 & 3. He enrolls in 3 credits in Module 1, 6 credits in Module 2, and 3 credits in Module 3, so he is considered enrolled full-time. He receives $2,000 in Pell Grant funds and $3,500 in Direct Loan funds. Anthony begins Module 1, but then decides to withdraw on Day 40. On that day, Anthony drops Modules 1 and 2. He does not drop Module 3, but he also does not actively confirm that he will return.

15. Returning After Withdrawal: Example Module 2 Module 1 Module 3 Withdraws on Day 40 The school considers Anthony to be withdrawn. First, the school recalculates Anthony’s Pell Grant to include only the credits in Module 1, which was the only module he attended. This recalculation results in a less-than-half-time enrollment status. The school includes the less-than-half-time Pell Grant disbursement ($500) in the R2T4 calculation and returns the remaining $1,500 in Pell. The R2T4 calculation requires the return of $2,000 of Anthony’s Direct Loan, and the school promptly makes the return.

16. Returning After Withdrawal: Example Module 2 Module 1 Module 3 Returns Anthony returns unexpectedly in Module 3, which is in the same payment period as Module 1. The school then reinstates his Title IV aid, disbursing the $2,000 in Direct Loan funds that were returned. However, because Anthony did not attend Module 2, the school again recalculates his Pell Grant enrollment status, this time to half-time. The school disburses an additional $500 in Pell Grant funds for a total of $1,000 for the semester.

17. Written Confirmation For programs offered in modules, a student is NOT considered to have withdrawn if: • For standard term programs, the institution obtains written confirmation that the student will return to attend a Title IV-eligible course within the same payment period or period of enrollment • For non-term and nonstandard term programs, the institution obtains written confirmation AND the module the student is expected to attend begins no later than 45 calendar days after the end of the module the student ceased attendance

18. Written Confirmation An online confirmation of future attendance from the student can constitute written confirmation if the confirmation is a timely positive confirmation of future attendance and occurs after the withdrawal. A student can revise the date of return to a later module if the student does so in writing after the time of the withdrawal but prior to the return date.

19. Written Confirmation: Failure to Return If a school obtains a written confirmation of future attendance but the student does not return as scheduled, the student is considered to have withdrawn from the payment period or period of enrollment. In that case, the student’s withdrawal date and the total number of calendar days in the period are the same as those that would have applied if the student had not provided written confirmation of future attendance.

20. Withdrawals from Competency-Based Programs In some competency-based programs, a student may complete the work related to a competency in less than the length of the term, so the time working on a competency is considered a module for R2T4 purposes. The module begins when student begins work on a competency and ends when student demonstrates mastery of the competency.

21. Withdrawals from Competency-Based Programs If the competencies in a competency-based program using terms do not have specified start and end dates, and students are enrolled to complete as many as they can during the term (sometimes called “subscription periods”), students are considered to be scheduled to attend entire term. Therefore, in these cases, the denominator of the R2T4 calculation will include all days in the term (payment period).

22. Withdrawals from Competency-Based Programs Example: John is enrolled in a competency-based program using subscription periods. The school treats subscription periods as standard terms and each is 110 days long. • The competencies in the school’s program can be taken consecutively or concurrently, and there is some variation possible in the order in which students take the competencies • Each competency is equivalent to one credit • Because the subscription period coincides with the payment period and students pay for the entire subscription period, the school considers a student to be scheduled to attend for the full payment period

23. Withdrawals from Competency-Based Programs Example:John officially withdraws when he is enrolled in 12 credits and has mastered five credits worth of competencies. • There are no scheduled breaks of five days or longer during the term and there were no breaks in John’s enrollment, so the days in the term (110) are used in the denominator of the R2T4 calculation • The student only attended 7 of 12 competencies, so the school must recalculate Pell to half-time status

24. Multiple Withdrawals When a student withdraws from more than one module during a payment period, the days in a module in that payment period are included in the denominator of the R2T4 calculation if: • The student attended at least one day in the module; • The module is in the future and the student was scheduled to attend the module at the time of the withdrawal; or • The module is in the past and was included in the original payment period or period of enrollment and used to determine the amount of Title IV, HEA funds eligibility.

25. Multiple Withdrawals: Example Module 1: 3 credit-hours Module 2: 3 credit-hours Module 3: 3 credit-hours Module 4: 3 credit-hours • Payment period includes four modules • Each module is 20 days long and there is a 6-day break between each module • Bill enrolls in 12 credit-hours in all four modules, so the school calculates his aid using a full-time enrollment status and Bill receives a Pell Grant disbursement of $2,000 and a Subsidized Direct Loan disbursement of $3,500

26. Multiple Withdrawals: Example Module 1: 20 days Module 2: 20 days Module 3: 20 days Module 4: 20 days Bill begins attendance in Module 1, but soon decides to withdraw from that module. He officially withdraws from Module 1 on day 14, but does not inform his school that he plans to return in later modules. Bill did not drop courses in any other module before withdrawing from Module 1, so he was scheduled to attend all modules when he withdrew. Therefore, the days in all four modules are included in the denominator of the R2T4 calculation. Withdraws on day 14 of Module 1

27. Multiple Withdrawals: Example Module 1: 20 days Module 2: 20 days Module 3: 20 days Module 4: 20 days • The school recalculates the student’s Pell Grant to less-than-half-time status and returns $1,500 as a result of the recalculation • The school then performs an R2T4 calculation: • Includes the less-than-half-time Pell Grant disbursement of $500 • Includes the full Subsidized Direct Loan disbursement of $3,500 • Numerator includes 14 completed days; denominator includes 80 total days in the payment period • Calculation requires the return of $3,300 in Subsidized Direct Loan funds Withdraws on day 14 of Module 1

28. Multiple Withdrawals: Example Module 1: 20 days Module 2: 20 days Module 3: 20 days Module 4: 20 days • Bill returns in Module 3, so the school reinstates his aid following the previous R2T4 calculation • The school re-disburses the $3,300 in Subsidized Direct Loan funds that was returned as a result of the original calculation • The school also re-disburses an additional $1,000 in Pell Grant funds because the student is now enrolled at ¾ time status Returns in Module 3

29. Multiple Withdrawals: Example Module 1: 20 days Module 2: 20 days Module 3: 20 days Module 4: 20 days • Bill then decides that he doesn’t need his class in Module 4, so he drops that class on day 2 of Module 3 • Finally, Bill realizes that he just doesn’t have time for school this term, so he drops out of his remaining class in Module 3 on day 8 of that module Drops Module 4 on day 2 of Module 3 Fully withdraws on day 8 of Module 3

30. Multiple Withdrawals: Example Module 1: 3 credit-hours Module 2: 3 credit-hours Module 3: 3 credit-hours Module 4: 3 credit-hours • The school once again recalculates the student’s Pell Grant because the student only attended enough classes to be half-time, and returns $500 to the Department • The school includes the remaining $1,000 in Pell Grant funds and the $3,500 in Subsidized Direct Loan funds in the R2T4 calculation Drops Module 4 on day 2 of Module 3 Fully withdraws on day 8 of Module 3

31. Multiple Withdrawals: Example Module 1: 20 days Module 2: 20 days Module 3: 20 days Module 4: 20 days • When the school determines how many days to include in the denominator of the R2T4 calculation, it uses 60 days: • 20 days for Module 1 because the student attended that module • 20 days for Module 2 because the module is in the past, was included in the original payment period or period of enrollment, and was used to determine Title IV eligibility • 20 days for Module 3 because the student attended that module • The school does NOT include the days in Module 4 because the module is in the future and the student was not scheduled to attend Module 4 when he withdrew Drops Module 4 on day 2 of Module 3 Fully withdraws on day 8 of Module 3

32. Multiple Withdrawals: Example Module 1: 20 days Module 2: 20 days Module 3: 20 days Module 4: 20 days • When the school determines how many days to include in the numerator of the R2T4 calculation, it uses 22 days: • 14 days that the student attended in Module 1 • 8 days that the student attended in Module 2 • Calculation: 22 days attended / 60 total days in the period • Bill earned 36.7% of his Title IV aid for the payment period, and the school returns $2,848.50 in Subsidized Direct Loan funds Drops Module 4 on day 2 of Module 3 Fully withdraws on day 8 of Module 3

33. Projecting Payment Period Completion Dates When a student withdraws from a credit-hour non-term program in which the completion date of the period depends on an individual student’s progress, an institution must project the completion date based on the student’s progress as of his or her withdrawal date to determine the total number of calendar days in the period.

34. Projecting Payment Period Completion Dates Principles for projecting payment period completion date: • Institution must account for each individual’s rate of progression • Institution must take into consideration any credits that a student has attempted but not successfully completed before withdrawing • If a student withdraws before earning any credits or completing any coursework, the institution must have a reasonable procedure for projecting the completion date of the period • The number of days in the denominator can never be less than the number of days in the payment period definition

35. Projecting Payment Period Completion Dates Example 1, Nothing Completed: Danny enrolls in a program offered in a credit-hour non-term format. Danny withdraws before earning any credits, completing any lessons, or providing any other measure of progress toward the course or program goals at the time he withdrew. The institution uses its records to identify the student who took the longest to complete the period to determine the number of days it took that student to complete the period. The institution uses the same number of days in the denominator of the R2T4 calculation for Danny. Student X: 102 days to complete payment period 102 days included in denominator of Danny’s R2T4 calculation

36. Projecting Payment Period Completion Dates Example 2, Lessons Completed: David enrolls in a non-term credit-hour program and withdraws before earning any credits, but has completed two lessons. The institution uses David’s completed assignments as an interim measure of his progress and compares it to information from its records about other students who have completed the same program to determine an end date. Student C Student A Student B 102 days to complete Payment period 96 days to complete Payment period 85 days to complete Payment period

37. Projecting Payment Period Completion Dates Example 2, Lessons Completed: Looking at the records of students who have completed the same program, the institution identifies other students who complete the two lessons in approximately the same amount of time as David. The school determines the number of days it took each of those students to complete the period. The institution uses the average number of days it took for those students to complete the period in the denominator of the R2T4 calculation for David. 94.33, rounded down to 94 96 + 102 + 85 = 283 3 94 days included in denominator of David’s R2T4 calculation

38. Projecting Payment Period Completion Dates • Example 3, Module Failed: Greg is enrolled in a progressive 24 credit-hour non-term program at an institution that performs R2T4 calculations on a payment period basis. Students in the program are expected to complete 12 credit-hours each payment period in 15 weeks (110 days). • The program is comprised of four modules, each including 2 classes, six credit-hours, and 55 calendar days. There are no breaks between modules. Expected PP1: 12 credits in 15 weeks, or 110 days Module 1: 6 credits, 55 days Module 2: 6 credits, 55 days

39. Projecting Payment Period Completion Dates • Example 3, Module Failed: Greg attends Module 1, but fails both courses. Greg cannot attempt Module 2 until he completes Module 1, so he must retake those courses. • Greg successfully completes all the courses in Module 1 after retaking them, but now must complete the courses in Module 2 to complete the payment period. Greg’s PP1: 12 credits in 165 days Module 1 (failed): 6 credits, 55 days Module 1 (retake): 6 credits, 55 days Module 2: 6 credits, 55 days Withdraws on day 10 of Module 3

40. Projecting Payment Period Completion Dates Example 3, Module Failed: Greg withdraws from Module 2 after attending only 10 days. The institution adds 55 days to the denominator of the R2T4 calculation because the student needs to complete an additional module in order to complete the number of credits in the payment period. Greg’s PP1: 12 credits in 165 days Module 1 (failed): 6 credits, 55 days Module 1 (retake): 6 credits, 55 days Module 2: 6 credits, 55 days Withdraws on day 10 of Module 3

41. Projecting Payment Period Completion Dates Example 4, Percentage Completed: Wendy is enrolled in a 24 credit-hour non-term program at an institution that performs R2T4 calculations on a payment period basis. Students in the program are expected to complete 12 credit-hours each payment period in 15 weeks (105 days). Wendy completes the 12 credit-hours in the first payment period in 120 days. Expected PP1: 12 credits in 105 days Expected PP2: 12 credits in 105 days Wendy Completes 12 credits in 120 days

42. Projecting Payment Period Completion Dates Example 4, Percentage Completed: Wendy withdrew from school immediately after completing a module on day 53 of the second payment period. At the time she withdrew, she had completed only one-third of the work (four credits) in the payment period. Expected PP1: 12 credits in 105 days Expected PP2: 12 credits in 105 days Wendy completes 4 credit hours in 53 days Wendy’s PP1: Completes 12 credits in 120 days Withdraws on day 53

43. Projecting Payment Period Completion Dates Example 4, Percentage Completed: When determining the number of days in the denominator of the R2T4 calculation, the school performs the following calculations: Step 1: Number of credits completed (4) / Number of credits in payment period (12) = Percentage of credits earned (.333) Step 2: Number of days attended (53) / Percentage of credits earned (.333) = Number of days in the period (159.159, rounded down to 159 days) 4 credit-hours / 53 days 106 additional days expected to complete PP2 Denominator in Wendy’s R2T4 calculation: 159 days

44. Overlapping Payment Periods In some cases, the payment period that an institution uses to perform an R2T4 calculation will not exactly coincide with the payment periods for each type of Title IV aid the student is receiving. In these cases, the institution must determine the amount of each Title IV aid award that is attributable to the payment period used as the basis for the R2T4 calculation.

45. Overlapping Payment Periods Principles for handling overlapping payment periods: • The payment period used in the R2T4 calculation is the one defined in 34 CFR 668.4 based on the program’s academic calendar • When a Title IV loan period (for Direct Loans) or payment period (for other Title IV aid) overlaps, but does not exactly coincide with the R2T4 payment period, the institution must determine the percentage of the period that overlaps with the R2T4 payment period. • The institution will only include a prorated amount of the Title IV aid as “aid disbursed” or “aid that could have been disbursed” in the R2T4 calculation based on the overlap percentage.

46. Overlapping Payment Periods Definitions of payment periods in 34 CFR 668.4: • 668.4(a): Standard terms or nonstandard terms that are substantially equal in length -- the payment period is the term • 668.4(b): Nonstandard terms that are not substantially equal in length – • For Title IV Grant programs, the payment period is the term • For the Direct Loan program, the payment period is the time it takes the student to complete half the hours and half the weeks of instructional time in the academic year or program, whichever is shorter • 668.4(c): Non-term programs – the payment period is the time it takes the student to complete half the hours and half the weeks of instructional time in the academic year or program, whichever is shorter

47. Nonstandard Terms that are Not Substantially Equal In a program using nonstandard terms that are not substantially equal, under 34 CFR 668.4(b), Title IV grants and Direct Loans use different definitions for payment periods. • A student in such a program who receives both types of aid will have two payment periods that generally will not exactly coincide • If the institution performs R2T4 calculations on a payment period basis and a student receiving both types of aid, the payment period used in the R2T4 calculation will be the one that ends later • If the student is receiving only one type of aid, the R2T4 calculation will use the payment period for that aid type

48. Nonstandard Terms that are Not Substantially Equal As with any R2T4 calculation, undisbursed Title IV aid is treated as “aid that could have been disbursed” as long as the conditions for late disbursements in 34 CFR 668.164(j)(2) were met prior to the date the student became ineligible. A student can never receive as a post-withdrawal disbursement any funds from a disbursement that the institution was prohibited from making on or before the date the student withdrew.

49. Overlapping Payment Periods: Example 1 Direct Loan PP1: 100 days $1,750 DL Disbursed Direct Loan PP2: 100 days $1,750 Projected DL Disbursement • A student is enrolled in a program using nonstandard terms that are not substantially equal • The student is receiving both a Pell Grant and a Direct Loan • At the time that the student withdraws, the payment period that would end later was the Pell Grant payment period, so that is used in the R2T4 calculation R2T4 and Pell Grant PP: 80 days, $1,100 Pell Disbursed Withdraws on day 50

50. Overlapping Payment Periods: Example 1 Direct Loan PP1: 100 days $1,750 DL Disbursed Direct Loan PP2: 100 days $1,750 Projected DL Disbursement • In order to determine the correct amount of Direct Loan funds to include in the calculation, the institution will need to determine the amount of the Direct Loan that is attributable to the R2T4 payment period R2T4 and Pell Grant PP: 80 days, $1,100 Pell Disbursed Withdraws on day 50