Transcript Return of Title IV Funds

TASFAA New Aid Officers Workshop
Kevin Campbell
Training Officer
United States Department of Education
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Return of Title IV Funds
• Applies only to Title IV eligible students who
begin attendance and then completely
withdraw, or otherwise cease attending
• If student enrolled but never attended any
classes
– Student did not establish eligibility for any funds
– All Title IV aid disbursed must be returned
to the programs
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Theory Behind the Calculation
• Student earns Title IV aid through
attendance
– Percentage of aid earned is equal to the
percentage of payment period or
enrollment period completed
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How does it work?
• If school has disbursed more aid than
the student has earned, money is
returned to the programs
• If school has disbursed less aid than the
student has earned, a post-withdrawal
disbursement will be calculated
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R2T4 – Many Forks in the Road
• Required to take attendance vs not
required
• Payment period vs period of enrollment
• Withdrawal date vs determination date
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R2T4 – Many Forks in the Road
• Aid disbursed vs aid that could have
been disbursed
• Amounts included in calculation vs
amounts that can actually be
disbursed
• Return vs post-withdrawal
disbursement
• School part of return vs student part
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R2T4 – Two Important Dates
• Withdrawal Date
– Last day of student’s eligibility for Title IV
• Determination Date
– Starts timeline for return of $ to ED
– Starts timeline for PWD
– Starts timeline for notifications to student
• Might fall on the same date but often
does not
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Date of Institution’s Determination
that Student Withdrew
• When did the school know of the student’s withdrawal?
• If unofficial withdrawal, determine withdrawal date no
later than 30 days after the end of the earlier of the
– Payment period or period of enrollment
– Academic year
– Educational program
• Schools required to take attendance should have a DOD
no later than 14 calendar days after student’s last date of
attendance
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Payment Period or
Period of Enrollment
• Standard term-based program must use
term/payment period
• Nonstandard term or nonterm program may
choose either payment period or period of
enrollment
– May choose on a program-by-program basis
– Must be consistent with application of method
used
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Rounding Rules for
Dollar Amounts
• Round to the nearest penny
– $2,346.00 x 44.6% = $1,046.316 or $1,046.32
– $2,346.00 x 44.4% = $1,041.624 or $1,041.62
• Disbursement or refund may be
rounded to the nearest dollar
– $1,046.32 = $1,046
– $1,041.62 = $1,042
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Rounding Rules for Percentages
• Calculate out to 4 decimal places
• 45 days / 101 days = .4455
• 199 hours / 450 hours = .4422
• Round to third decimal place
• .4455 = .446 = 44.6%
• .4422 = .442 = 44.2%
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Our Student - Maria
• Fill out top of R2T4 worksheet
• We determined Maria withdrew
yesterday
• Our school calculates R2T4 on a
payment period basis
– In this case, Spring Semester
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Maria – R2T4 Worksheet Step 1
• Enter student’s Title IV aid as either
disbursed or could have been disbursed
• Note that loans are separate from
grants
• A = Grant $ disbursed
• B = Loan $ disbursed
• C = Grant $ TCHBD
• D = Loan $ TCHBD
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Maria’s Spring Financial Aid Package
PROGRAM
AMOUNT
Federal Pell Grant
2000
Federal Work Study
1000
State Grant
500
Direct Loan Sub Stafford
1741 (net amount)
Direct Loan Unsub Stafford
995 (net amount)
Private student loan
2000
School Scholarship
3000
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Aid That Could Have
Been Disbursed
• Student met conditions for a late disbursement
(668.164(g)(2)) –
• At time student withdrew, ED had processed a SAR
or ISIR with official EFC
–
–
–
–
–
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Pell/ACG/National SMART – ISIR with eligible EFC
FFEL – loan had been certified
DL – loan had been originated
TEACH – grant had been originated
Perkins/FSEOG – funds had been awarded
FFEL/DL Second/Subsequent
Disbursements
• Include as aid that could have been
disbursed if student met the “conditions
for a late disbursement”
• Cannot be included in any postwithdrawal disbursement
[668.164(g)(4)(ii)]
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$ Included in Calculation vs $ That
Can Be Disbursed
• Counter intuitive to include funds in
calculation that you will not disburse to
student
• However, one set of regs govern the calc
• Another set of regs govern what can be
disbursed
– More restrictive
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Maria – R2T4 Worksheet Step 2
• Find out how much of the payment
period Maria completed
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STEP 2: Withdrawal Date – School
Not Required to Take Attendance
• Use the earlier of
– date student began school’s withdrawal process or
date student otherwise provided “official” notice;
or
– midpoint in period (if student didn’t notify school);
or
– If student didn’t notify due to circumstances
beyond student’s control, the date related to that
circumstance
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STEP 2: Withdrawal Date – School
Not Required to Take Attendance
School not required to take attendance
always has the option of using the date
of student’s last attendance at an
academically related activity as
documented by the school
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STEP 2: Withdrawal Date –
School Required to Take
Attendance
IF… school is required to take attendance by outside
entity (such as state or accrediting agency)
OR…starting on July 1, 2011, the school, itself,
requires attendance be taken
THEN... withdrawal date is taken from attendance
records
NOTE: Requirement might apply only to specific groups of students
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Calendar Days at Credit-Hour
Schools
Count every day, including weekends
and holidays, except:
• Scheduled break of five or more
consecutive days when no classes are
offered
• Days of leave of absence are not included
in total days
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Calendar Days at Credit-Hour Schools
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SUN
MON
TUE
WED
THU
FRI
SAT
Closed
Class
Class
Class
Thanks
giving
Day
Closed
Closed
Closed
Class
Class
Class
Class
Class
Closed
Calendar Days at Credit-Hour Schools
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SUN
MON
TUE
WED
THU
FRI
SAT
Closed
Class
Class
Closed
Thanks
giving
Day
Closed
Closed
Closed
Class
Class
Class
Class
Class
Closed
Calendar Days at Credit-Hour Schools
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SUN
MON
TUE
WED
THU
FRI
SAT
Closed
Class
Class
Class
Class
Class
Closed
Closed
Spring
Break
Spring
Break
Spring
Break
Closed
Closed
Class
Class
Class
Class
Class
Closed
Maria – R2T4 Worksheet Step 2
• Maria started on the first day of Spring
Semester, February 1, 2010
• The last day of Spring Semester is May
11, 2010
• Maria “unofficially” withdrew
• Our school is not required to take
attendance
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Maria – R2T4 Worksheet Step 3
• What % of her aid would Maria have
earned had she NOT withdrawn?
• What % did Maria, in fact, earn SINCE
she withdrew?
• % completed x Total Title IV aid
disbursed and TCHBD = T4 Earned by
student
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Maria – R2T4 Worksheet Step 4
• Does Maria have a return or a PWD?
• If a return, continue with R2T4 calc
– Step 4 Box K
• If a PWD, go to PWD Tracking Sheet
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Maria – R2T4 Worksheet Step 4
• Step 4 is calculating the Total Return
– School part
– Student part
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Maria – R2T4 Worksheet Step 5
• What is the school’s part of the Total
Return?
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Maria – R2T4 Worksheet Step 5
• The institutional charges at Maria’s school
are $3000 tuition/fees
– Calculated before any withdrawal related
reduction in institutional costs
• Determine % of unearned Title IV aid
• Institutional costs x % of unearned T4 =
amount of unearned charges
• Compare Total Title IV to Return to amount of
unearned charges
• Lesser amount is School part of return
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Step 6: Return of Funds by School
• Law specifies order of Title IV programs
to which funds must be returned
– See worksheet
• Never return more money than was
received from a Title IV program
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Step 6: Return of Funds by School
• Return funds to program(s) as soon as
possible, but no later than 45 calendar
days after the date of determination of
withdrawal
– Calculation must be completed within 30
calendar days of the date of determination
of withdrawal
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Maria – R2T4 Worksheet Step 6
• What are the amounts that the school will
return to each T4 program for Maria?
• Why does the school have to return these
funds for Maria?
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Step 7: Return of Funds by Student
• Total T4 to return – what school has
returned = initial amount of student part
• Initial amount may change because the
student gets different, and more
favorable, treatment in the calc in later
steps
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Maria – R2T4 Worksheet Step 7
• What is Maria’s part of the return (initial
amount)
• Total T4 to return – what school has returned
= initial amount of student part
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Step 8: Repayment of
Student’s Loans
• Student is responsible to repay any loan
funds not returned by the school
• Loans are repaid in accordance with
terms of the promissory note
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Maria – R2T4 Worksheet Step 8
• What is the amount of Maria’s loans that
make up the initial amount of her return?
• What does “according to the terms of the
promissory note” mean
• Is this different from the standard the
school was held to?
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Maria – R2T4 Worksheet Step 9 & 10
• Maria has no grant funds to return
• This will occur for many students who have
no grants or a combination of loan and
grants
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Randall – R2T4 Worksheet Step 9 & 10
• Randall received no loans
• Randall received $2780 in T4 grants
• After the school returned its portion,
Randall had an initial amount of $900 to
return
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Randall – Calculating Grant
Overpayment – Step 9
$900.00
$0.00
$2780.00
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$900.00
900.00
$1,390.00
$1390.00
<$490.00>
Randall – R2T4 Worksheet Step 9 & 10
• Does Randall have any grant funds to
return?
• Is this standard different from the standard
the school was held to?
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Step 10: Return of Funds
by Student
• Any grant repayment due from student is
considered an overpayment
• Student is responsible for repayment
– Amounts of $50 or less in any program are set
aside
• Law specifies order of Title IV programs to
which funds must be returned
– See worksheet
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Step 10
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Grant Overpayment
• School must notify student within 30 days of
school’s determination of withdrawal
• Student retains Title IV eligibility for 45 days
– During that time, he must either:
• Repay in full to school
• Make satisfactory arrangements to repay with school
(school’s option)
• Make satisfactory arrangements to repay with
Department of Education
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Referring Overpayment
to the Department
• If student does not repay in full or make
payment arrangements with school
within 45 days, school must refer
overpayment to Department for
collection
• Referral form in Participant Guide
– Further explanation in FSA Handbook,
Volume 5
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Report Overpayment to NSLDS
• Overpayments not paid in full within 45
days of the institution’s determination of
the withdrawal must be reported to
NSLDS
– Reported via online process
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Post-Withdrawal Disbursements
(PWD)
• When Title IV aid disbursed is less than
Title IV aid earned
• Sample worksheet in FSA Handbook
and in Participant Guide
• Box J on R2T4 Worksheet
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Notification of PWD
• School must provide written notification
within 30 days of date of determination
of withdrawal
– Must identify type and amount of funds
– Must explain option to accept or decline
some or all of funds
– Must explain obligation to repay any loan
funds disbursed
– Must provide a deadline for response
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Post-Withdrawal Disbursement
of Grant Funds
• No student confirmation required
• Disbursed directly to student - as soon
as possible, but no later than 45
calendar days after date of
determination
• Disbursed as credit to account – within
180 days after date of determination
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Post-Withdrawal Disbursement
of Loan Funds
• Must receive confirmation from the
student or parent borrower prior to
disbursement
• Must be made as soon as possible, but
no later than 180 days after date of
determination
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Applying PWD to
Institutional Charges
• Grant funds may be applied directly to those
charges without student’s authorization
• Loan funds may only be applied after
confirmation is received from the
student/parent borrower
– Written notification procedures are same as
for direct disbursement
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Additional Resources
• FSA Handbook, Vol. 5, Ch. 2
inc. case studies
• Dear Colleague Letter GEN-00-24 (December 2000)
• Dear Colleague Letter GEN-04-03 (November 2004)
• R2T4 Demo Site available at
– http://fafsademo.test.ed.gov
• R2T4 website available through
FAA Access to CPS Online
– http://www.faaaccess.ed.gov/
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Supervisor of Training Officers
Requests Feedback from FAAs
• Jo Ann Borel
• Supervisor of Training Officers
• United States Department of EducationFederal Student Aid
• Phone: 202-377-3930
• [email protected]
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Thank You!
Kevin Campbell
Training Officer
United States Department of
Education
Federal Student Aid
Phone: 214-661-9488
Email: [email protected]
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