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Return of Title IV. Ann Marie Gruber Assistant Director of Financial Aid Lakeland Community College agruber@lakelandcc.edu. What is R2T4?. Return of Title IV Funds

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return of title iv

Return of Title IV

Ann Marie Gruber

Assistant Director of Financial Aid

Lakeland Community College

agruber@lakelandcc.edu

what is r2t4
What is R2T4?

Return of Title IV Funds

Calculation to determine what Title IV aid a recipient has earned upon total withdrawal and what if any aid must be returned and by whom

Separate from the institution’s and state’s refund policy

Must inform students of all refund policies (including R2T4) as well as the requirements and procedures to begin the withdrawal process from the school

when does r2t4 apply
When Does R2T4 Apply?

Recipient of Title IV aid ceases enrollment after beginning attendance but before the end of the enrollment period (POE) or payment period (PP)

Does not apply to students who reduce their course load (change in enrollment status not a withdrawal)

Up through the 60% point of the PP or POE

Still must complete calculation if after 60% point to determine if post-withdrawal disbursement is required

worksheets provided by the department of education available at http www ifap ed gov

Worksheets provided by the Department of Education available at http://www.ifap.ed.gov

Completing the Calculation

slide5

Web product available through FAA Access to CPS online at http://www.fafsa.ed.gov/FOTWWebApp/faa/faa.jsp

Completing the Calculation

after the calculation

After the Calculation….

If amount of aid the student earns is less than what was disbursed, funds must be returned to the programs

If amount of aid the student earns is more than what was disbursed, the student is eligible for a post-withdrawal disbursement provided they were eligible for the aid at the time they withdrew

date institution determines student withdrew

Date Institution Determines Student Withdrew

Point in time institution could reasonably be aware that student withdrew

Not necessarily same as date of withdrawal but could be

Sets the clock for when schools must take action

45 days to offer PWD and/or return their portion of unearned aid

determining date of withdrawal

Determining Date of Withdrawal

For schools not required to take attendance:

date student begins the formal withdrawal process

date student provided intent to WD

date institution becomes aware student ceased attendance

determining date of withdrawal9

Determining Date of Withdrawal

For schools not required to take attendance…

midpoint if student stops attending without notifying anyone (must be determined within 30 days of end of payment period, academic year or student’s educational program, whichever is earlier)

beginning date of Leave of Absence (LOA) for a student who does not return from LOA

last date of academically related activity (taking exam, completion of paper, etc.); must be able to document attendance

determining date of withdrawal10

Determining Date of Withdrawal

For schools not required to take attendance…

date of illness, accident, or events beyond student’s control that prevented them from notifying the school of their withdrawal

for student who fails all courses, school must have procedure for determining if student completed and failed all or at least one course or they unofficially withdrew (school then uses midpoint of PP or POE or last date of academically related activity)

payment period pp or period of enrollment poe

Payment Period (PP) or Period of Enrollment (POE)?

Standard term based programs (semesters, quarters, trimesters)-use PP

Non-standard term-based or non term-based program-school has choice of using either POE or PP, but must use same in all it’s calculations for all student within the program who withdraw

determining date of withdrawal12

Determining Date of Withdrawal

For schools required to take attendance (only schools required to take attendance by an outside entity even if is for a limited time*)…

date student begins official withdrawal process

the last recorded date of attendance from the institution’s attendance record

if school is required to take attendance for a limited time and student withdraws after that date, the school would calculate the WD date same as a school not required to take attendance would

*schools required to take attendance on only one date of the term

(census date) are not considered to be required to take attendance

the calculation disbursed aid

Aid is considered disbursed aid if it is disbursed as of the WD date as determined by the institutionFor loans funds, use net amountDo not include inadvertent overpayments (example: funds paid to student who withdrew prior to disbursement) but count as aid that could have been disbursed Do not include Federal Work Study

The Calculation…Disbursed Aid

the calculation aid that could have been disbursed

Aid that could have been disbursed but had not yet been disbursed All aid for period if conditions for late disbursement were met before student withdrew -Official EFC from a processed ISIR -Institution certified FFEL or Direct Loan -Federal Perkins or FSEOG-institution made the award to the student

The Calculation…Aid That Could Have Been Disbursed

the calculation aid that could have been disbursed but school is prohibited from disbursing

Second or subsequent disbursements of FFEL or Direct Loan funds unless student has graduated or successfully completed program (if regulation applies)Disbursement of FFEL or DL to first-year first-time borrower who withdraws before the 30th day of program (if regulation applies)

The Calculation…Aid That Could Have Been Disbursed (but school is prohibited from disbursing)

the calculation aid that could have been disbursed but school is prohibited from disbursing16

For clock-hour or credit-hour non term programs, Federal Pell Grant funds for a subsequent payment period that institution is prohibited from making because student did not complete earlier payment periodDisbursements of Federal Pell Grant funds to a student for whom institution has processed ISIR but not a valid EFC (all information on ISIR is correct) by verification deadlines

The Calculation…Aid That Could Have Been Disbursed (but school is prohibited from disbursing)

the calculation what not to count in aid disbursed or that could have been disbursed

Stafford Loans for which an MPN has not been signed*Federal Perkins Loan for which an MPN has not been signed**Student can sign note between time they withdraw and the calculation is complete (effective 10-27-05 DC 05-16)

The Calculation…What Not to Count in Aid Disbursed or That Could Have Been Disbursed

the calculation what not to count in aid disbursed or that could have been disbursed18

Title IV funds subject to verification (even those where an interim disbursement has been made) and student has not submitted required documents****If student submits verification documents after initial R2T4 calculation but before established verification deadlines, the calculation must be redone

The Calculation…What Not to Count in Aid Disbursed or That Could Have Been Disbursed

the calculation percentage of aid earned

Calendar days completed (determined by withdrawal date) divided by calendar days in periodExclude institutionally scheduled breaks of 5 or more consecutive days

The Calculation…Percentage of Aid Earned

the calculation percentage of aid earned20

For clock hours schools, scheduled hours are used to determine % completed (new)Students who withdraw after the 60% point earn 100% of their aid (still must do calculation to make sure a post-withdrawal disbursement is not necessary)

The Calculation…Percentage of Aid Earned

the calculation aid to be disbursed or returned

If aid disbursed = amount earned -no further action neededAmount of aid disbursed > amount earned -unearned portion must be returned to the programsAmount of aid disbursed < amount earned -post-withdrawal disbursement required

The Calculation…Aid to be Disbursed or Returned???

amount of aid disbursed amount earned

Subtract amount of earned aid from amount that was actually disbursed (not including aid that could have been disbursed)School must return the lesser of: amount of Title IV aid student does not earn or amount of institutional charges (tuition, fees, room and board if contracted with the school initially charged to the student even if paid by other sources) that student incurred for the PP or POE multiplied by percentage of funds that was not earned

Amount of aid disbursed >amount earned

slide23

Unsubsidized FFEL/Direct Stafford Loan Subsidized FFEL/Direct Stafford LoanPerkins LoanFFEL/PLUS (graduate students)

Order of Funds to be Returned by the School

slide24

FFEL/Direct PLUS (parents) Federal Pell Grant Academic Competitiveness GrantNational SMART Grant FSEOGTEACH

Order of Funds to be Returned by the School

school must return funds within 45 days of date institution determined student withdrew

School must return funds within 45 days of date institution determined student withdrew

Return of Funds by the

School

return of funds by the student

Student must return all unearned funds that the school is not required to return in same order as the schoolSchool could opt to return grant funds for the student and then collect from student or … Student returns their portion

Return of Funds by the Student

return of funds by the student27

How student returns their portion…repaying grant overpayment not to exceed half of the total TIV grant funds no need to repay grants if less than $50 student must repay or make satisfactory overpayment arrangements (with school or DOE) within 45 days of being notified of owing overpayment to remain eligible for aid

Return of Funds by the Student

return of funds by the student28

How student returns their portion…school is responsible for notifying student they owe overpayment within 45 days of determining student withdrewreturn loan funds in accordance with the terms of the loan

Return of Funds by the Student

amount of aid disbursed amount earned29

Post-withdrawal disbursement (PWD) is due… Must meet current conditions for late disbursement School credits student account for allowable incurred costs with PWD funds up to outstanding charges School must get student’s or parent’s signature to credit account for charges other than tuition, fees, room and board (if contracted by the school)

Amount of aid disbursed<amount earned

amount of aid disbursed amount earned pwd

School is required to offer PWD in excess of what was used to pay allowable charges to student no later than 45 days after the date the school determines that the student withdrew (must identify type and amount of aid and indicate student or parent’s right to decline all or part of award)

Amount of aid disbursed<amount earned (PWD)

amount of aid disbursed amount earned pwd31

School is required to contact a withdrawn student prior to making PWD of loan funds and explain their obligation to repay the fundsSchool must document outcome of the contact

Amount of aid disbursed<amount earned (PWD)

amount of aid disbursed amount earned pwd32

Student or parent given 14 days from date of notification to accept PWD or school can choose not to make PWDPWD must be made no later than 120 days of determination student withdrew

Amount of aid disbursed<amount earned (PWD)

has no relationship to incurred costs no pwd for a deceased student can be made

Has no relationship to incurred costsNo PWD for a deceased student can be made

Amount of aid disbursed<amount earned (PWD)

credit balances and r2t4

If student has credit balance at time they withdraw, do not issue refund to student or return funds to program until calculation is completeMay go past the 14 days to issue credit balance, but still compliant if within 45 days to do calculationAfter the calculation is complete, must pay any remaining credit balance per cash management rules (14 days)

Credit Balances and R2T4

slide36

Example: Classes started 8-28-09Student Withdrew 8-31-09 with documented attendance in 12 credit hoursEligible for $2675 in Federal Pell GrantOriginal institutional charges= $1540.05Earned 3.6% (4 days out of 112) of aid=$96.30

slide37

Unearned aid (amount to be returned) = $2578.70 ( 96.4% x $2675)Unearned aid for school to return = $1484.60 ($1540.05 x 96.4%)Unearned aid for student to return = $1094.10 ($2578.70– $1484.60)Student not required to return their portion because not more than 50% of original grant amount of $2675 ($1337.50)Pell amount = $1190.40