Transcript Return of Title IV Funds: Solving the Mystery

Return of Title IV Funds:
Solving the Mystery
Ann Marie Gruber
Lakeland Community College
[email protected]
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?
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
Higher Education Reconciliation
Act of 2005 (HERA)
Changes implemented that effect R2T4
Different rules…
– students who withdrew before July 1, 2006
– students who withdraw after July 1, 2006
Completing the Calculation
Worksheets provided by the Department of
Education available at http://www.ifap.ed.gov
Completing the Calculation
Web product available through FAA Access to CPS
Online at
http://www.fafsa.ed.gov/FOTWWebApp/faa/faa.jsp
Completing the Calculation
PC version of the R2T4 software was
archived on June 1, 2006 and cannot be
used for calculations for students who
withdrew after July 1, 2006.
Still available at
http://fsadownload.ed.gov/sitemap.htm
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
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 (new-was 30 days
prior to July 1, 2006)
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
– 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 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
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
Payment Period (PP) or Period of
Enrollment (POE)
Standard term based programs
(semesters, quarters, trimesters)-use PP
Non-standard term-based or non termbased 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
The Calculation…Disbursed Aid
Aid is considered disbursed aid if it is
disbursed as of the WD date as determined
by the institution
For loans funds, use net amount
Do not include inadvertent overpayments
(example: funds paid to student who withdrew
prior to disbursement-count as aid that could
have been disbursed)
Do not include Federal Work Study
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 (but school
is prohibited from disbursing)
Second or subsequent disbursements of FFEL or Direct
Loan funds unless student has graduated or successfully
completed program
Disbursement of FFEL or DL to first-year first-time
borrower who withdraws before the 30th day of program
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 period
Disbursements of Federal Pell Grant funds to a student
for whom institution has processed ISIR but not a valid
(all information on ISIR is correct) EFC by deadlines ie
student has submitted all verification documents to
school but valid ISIR not received as of date of
calculation
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*
Title IV funds subject to verification (even those
where an interim disbursement has been made) and
student has not submitted required documents**
*Student can sign note between time they withdraw and the
calculation is complete (effective 10-27-05 DC 05-16)
**If student submits verification documents after initial R2T4
calculation but before established verification deadlines, the
calculation must be redone
The Calculation…Percentage of
Aid Earned
Calendar days completed (determined by
withdrawal date) divided by calendar days in
period
Exclude institutionally scheduled breaks of 5 or
more consecutive days
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…Aid to be
Disbursed or Returned???
If aid disbursed = amount earned
– no further action needed
Amount of aid disbursed > amount earned
– unearned portion must be returned to the
programs
Amount of aid disbursed < amount earned
– post-withdrawal disbursement required
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
Order of Funds to be Returned by
the School
Unsubsidized FFEL/Direct Stafford Loan
Subsidized FFEL/Direct Stafford Loan
Perkins Loan
FFEL/PLUS (graduate students)
FFEL/Direct PLUS (parents)
Federal Pell Grant
Academic Competitiveness Grant
National SMART Grant
FSEOG
Return of Funds by the School
School must return funds within 45 days of
date institution determined student
withdrew (was 30 days prior to July 1,
2006)
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 school
School 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
How student returns their portion
– repaying grant overpayment not to exceed half of the total TIV
grant funds
– 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
school is responsible for notifying student they owe overpayment
within 45 days of determining student withdrew
no need to repay if less than $50 (new-was $25 prior to
July 1, 2006)
– return loan funds in accordance with the terms of the loan
Amount of aid disbursed<amount
earned
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 (PWD)
School is required to offer PWD in excess of
what 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)
Student or parent given 14 days from date of
notification to accept PWD or school can choose
not to make PWD
PWD must be made no later than 120 days of
determination student withdrew
Has no relationship to incurred costs
No PWD for a deceased student can be made
Amount of aid disbursed<amount
earned (PWD)
New (as of July 1, 2006)…
School is required to contact a withdrawn
student prior to making PWD of loan funds
and explain their obligation to repay the funds
School must document outcome of the contact
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
complete
may go past the 14 days to issue credit balance,
but still compliant if within 45 days to do
calculation
after the calculation is complete, must pay any
remaining credit balance per cash management
rules (14 days)
Other R2T4 Changes Due to
HERA
Funds no longer included in calculation
are LEAP, SLEAP, GEAR UP or SSS
Institution may grant more than one leave
of absence to a student
Questions???
Example:
Classes started 8-28-06
Student Withdrew 8-31-06 with
documented attendance in 12 credit
hours
Eligible for $2025 in Federal Pell Grant
Original institutional charges= $1140.05
Earned 3.6% (4 days out of 112) of
aid=$72.90
Unearned aid (amount to be returned) =
$1952.10 ( 96.4% x $2025)
Unearned aid for school to return =
$1099.01 ($1140.05 x 96.4%)
Unearned aid for student to return = $853.09
($1952.10 – $1099.01)
Under new laws, student not required to
return their portion because not more than
50% of original grant amount of $2025
Under new regulations Pell award amount
is $925.99 ($2025-1099.01)
----------------------------------------------------------Under old law, student would be required
to return 50% of amount they owe or
$426.55 (50% x $853.09)
Pell award amount under old regulations =
$925.99 with the student owing an
overpayment of $426.55 (total Pell of
$499.44 once student repays)