Return of Title IV Funds

Loan Eligibility

The following policy applies to Title IV recipients who have officially or unofficially withdrawn from all courses or have dropped classes in current or subsequent modules. If a loan is disbursed based on a minimum of half-time enrollment and has attended one day of at least one class, whether their enrollment status changes after being disbursed, the student establishes eligibility for Federal Direct Loan.  If the loan has been originated but is not disbursed, the student may qualify for a post-withdrawal disbursement.

Pell Grant

Students are awarded amounts based on the student’s enrollment.  Students who drop a class before the census date or Pell Recalculation Date (PRD) will have their grant amount adjusted. 

Federal Work Study (FWS)

FWS Funds are not included in any of the calculations for the return of funds.  Students are no longer allowed to work once they officially withdraw. 

Supplemental Education Opportunity Grant

Awarded students must be enrolled in at least 1 credit hour.

1. Determine the Withdrawal Date

Official Withdrawal

The withdrawal date for an Official Withdrawal will be the Last Date of Academic Attendance/Activity (LDA) as reported and confirmed.  The designated office for official withdrawal notification, both written and verbal, is the Office of Registrar. The Office of Registrar processes the withdrawal notification, including requests for backdated withdrawals.

Unofficial Withdrawal

An unofficial withdrawal occurs when the student does not begin the school’s withdrawal process, withdraws from courses online or notifies the school of the intent to withdraw but has ceased engaging/attending all courses in a payment period.  In this case, the withdrawal date is the midpoint of the payment period for which the Title IV assistance was disbursed unless a more accurate date of academic activity can be documented.

Most unofficial withdrawals are identified by pulling a report of students that withdrew from courses online or when grades are reported at the end of the semester. A student with all FN grades for the semester will be considered an unofficial withdrawal. A grade of F is considered an earned grade and does not count toward an unofficial withdrawal.

Note

If a grade of Incomplete (I) is assigned allowing for an extension of time to complete the class, the faculty must assign a default grade that will be assigned if the student does not further engage.  If the default grade is an FN, then a last date of attendance (LDA) must be reported (if LDA is unknown) or use the date from the last documented academic record.  If the student does not subsequently engage, the grade of F/FN will be based on the LDA.  Otherwise, if the student subsequently engages, a grade of A-F will be assigned as appropriate.  A student with all I’s, that will revert to an FN at the end of the extension date, will also be considered unofficial withdrawal.  A return calculation is processed.  If the grade is changed within an allowable timeframe based on federal deadlines, the R2T4 can be reversed, and aid can be reinstated if the grade is later earned.

For unofficial withdrawal, only the date that the student withdrew online or an LDA may be used to determine the withdrawal date.

Return to Title IV and Coursework towards Program of Study

In cases where students have withdrawn from all courses, except for a course(s) that do not count towards their program of study, they are considered to be withdrawn for Title IV purposes. As such, a R2T4 calculation is required, and the unearned percentage of aid will be returned according to the calculation. 

Purged After First Day

Federal regulations state that if a student attends even one day of one class, the student has earned some portion of financial aid.  In the case that a student is reinstated after classes have started, it must be determined whether the student academically engaged in the classes prior to the drop date.  The school must have evidence to support engagement from faculty, school systems, or records to verify engagement.  If it is determined that a student has attended prior to the drop date or based on date from a documented academic activity. 

Backdated Withdrawals

A student may have their withdrawal date backdated based on documented extenuating circumstances.  If an R2T4 calculation has already been processed based on the original (and later) dates and a return made, the R2T4 calculation will not be changed based on the backdated date if 30 days have passed since the original R2T4.  The Federal Student Aid Handbook sates that an institution is never required to do a recalculation of a change that is not a correction (vol. 5, ch.1) In some cases, backdated withdrawals may be result in the student receiving a tuition adjustment from the University.  The Federal Student Aid Handbook also states that changes made to institutional charges after the student withdraws will not affect the charges for which the student was assessed, or the aid earned in the calculation (vol.5, ch.1).

If the student has not already withdrawn, and is granted a backdated withdrawal by the university, the withdrawal date will be based on the date that the student began the withdrawal process (not the date that the student simply inquired about withdrawing) or provided official notification.  In some cases, the withdrawal date may be based on the documentation used as a basis for the backdated withdrawal (e.g. hospitalization).  This applies even if the student is granted a backdated withdrawal with an effective date before the first date of classes.  Academic records will be maintained in such bases to verify that the student began attendance and was not reported as having ceased attendance prior to the point of withdrawal. 

**This applies to federal aid only.** 

Volume 5, Chapter 1, FSA Handbook

Changing or Correcting an R2T4 Calculation

Changes that aren’t corrections are allowed only if the change can be made in time for the institution to meet any applicable R2T4 deadline.

A change is not a correction if a calculation (R2T4/post withdrawal disbursement) was correct at the time it was processed.

 Example: A school that used the midpoint date as the withdrawal date may want to go back and revise an already processed R2T4 calculation to use a last date of attendance at an academically related activity past the midpoint.  Such a change is not a correction because the use of the midpoint was not a mistake- unlike using the wrong amount of a Pell Grant disbursement. Similarly, the signing of a promissory note after a calculation is processed is not a correction because failing to sign a promissory note is not a mistake.

An institution is never required to do a recalculation of a change that is not a correction.

2. Determining the Percentage of the Period of Enrollment Completed

Once a withdrawal date has been established, the percentage of the payment period the student completed will be calculated to determine the portion of the period not  completed.  These percentages then determine the corresponding percentages of earned and unearned aid.  The percentage completed is determined by dividing the total number of calendar days comprising the payment period for which assistance is awarded into the of calendar days completed in that period as of the day the student withdrew.

Breaks of 5 days or more will be excluded from both the denominator and numerator for the purpose of calculating the percentage of the period of enrollment completed.

3. Determining Institutional Charges

Institutional charges are used to determine the portion of unearned Title IV aid that the school is responsible for returning.  Schools must ensure that all appropriate fees, as well as applicable charges for books, supplies, materials, and equipment are included for coursework that is meeting an outstanding degree.  Institutional charges for non-CPoS eligible courses are not included in the R2T4 calculation.

The institutional charges used in the calculation period usually are the charges that were initially assessed for the entire payment period.  Initial charges may only be adjusted by  those changes in the institution made prior to the student’s withdrawal (Example: for a change in enrollment status unrelated to the withdrawal).  If, at the time of the withdrawal or afterward, the school changes the amount of the institutional charges or decides to eliminate all institutional charges, those changes do not affect the charges nor aid earned in the calculation.

The following educational expenses must be considered institutional charges:

• All charges for tuition, fees, housing and meals (if contracted by the school). Note that application fees are excluded from institutional charges as they are not an educational cost. 
• Expenses for required course materials (books, kits, tools, supplies, etc.) if the student does not have a real and reasonable opportunity to purchase the required course materials from any other unaffiliated source but the school.

Non- Institutional Charges (not included in an R2T4 calculation) include the following charges:

• charges for any required course materials that a school can document a student had a real and reasonable opportunity to purchase elsewhere,
• charges to a student’s account for discretionary, educational related expenses (e.g. parking or library fines, the cost of athletic or concert tickets, etc.)

4. Title IV Aid Disbursed

Title IV funds are considered disbursed once the student’s account is credited.  All Title  IV funds (except FWS) that are disbursed as of the withdrawal date are used in the R2T4  calculation so long as the disbursement was not an inadvertent overpayment. Inadvertent overpayments are an exception. 

Inadvertent Overpayments

Disbursements inadvertently made to a student after the student ceased attendance but prior to the date of the institution’s determination that the student withdrew are included in an R2T4 calculation as Aid that could have been disbursed rather than Aid disbursed.

However, since inadvertent overpayments are not considered eligible late disbursements (refer to Late Disbursement Policy section), the aid cannot be considered an eligible post withdrawal disbursement and must be cancelled in full.

Note

Enter the net amount of any federal loan disbursed.

5. Calculation of Title IV Assistance Earned

If the percentage of the payment period is less than or equal to 60%, this percentage becomes the percentage of earned assistance.  If the percentage of the payment period is greater than 60.01%, then 100% is used for the percentage of earned assistance.

The earned percentage is applied to the total amount of Title IV grant and loan assistance that was disbursed (and that could have been disbursed) to the student for the payment period for which it was awarded as of the determined withdrawal date.  Loans not disbursed at the time of the withdrawal date can only be considered as “aid that could have been disbursed” if the student has signed a promissory note.

In accordance with the last disbursement rules, the amounts that “could have been disbursed” is any awarded aid for which the student qualified as of the withdrawal date, but that had not yet been disbursed.

The school has been 180 days from the date of withdrawal determination to make a post- withdrawal disbursement of earned aid.

6. Calculation of Title IV Assistance Earned

If the student has earned 60.01% or greater, no return of funds is necessary.  If the percentage earned is 60.00% or less, then that amount is subtracted from 100% and the result is the unearned percentage. 

School

The school must return the lesser of:

1) the unearned amount of Title IV assistance; or

2) the amount equal to the student’s total institutional charges for the period multiplied by the unearned percentage.  The school has 45 days from the date of the determination of withdrawal to return the unearned Title IV fund(s). 

Student

The student must return the unearned amount of Title IV assistance minus any funds the   school returned.  Grants funds to be repaid are limited to the amount by which the  original overpayment amount exceeds half of the total grant funds received by the  student.  A student, or parent for a PLUS loan, is required to repay the calculated amount attributable to a Title IV loan program according to the terms of the Master Promissory Note (MPN).  In essence, this means that when a repayment amount, due to the withdrawal, is calculated and attributed to a student’s Title IV loan, the student is not responsible for immediately returning that amount.  That amount will be repaid when the loan enters repayment status in accordance with the terms of the MPN.

7. Order of Required Returns by the Institution

The Department of Education requires that unearned funds be returned in a manner that is in the best interest of the student.  Based upon the federal guidelines, unearned Title IV funds are to be returned in the following order:

• Unsubsidized Direct Student Loans
• Subsidized Direct Student Loans
• Direct PLUS Loan Program (parent or student)
• Federal Pell Grant
• Iraq and Afghanistan Service Grant
• Federal Supplemental Educational Opportunity Grant
• Federal TEACH grant

8. Post-Withdrawal Disbursements

When processing a R2T4 calculation, include any federal aid awarded but has not been disbursed as “Could Have Been Disbursed).  For federal loans that have been originated but not disbursed, included them in the calculation as “Could Have Been Disbursed” whether the student is eligible to receive under late disbursement rules as a post-withdrawal disbursement (refer to Late Disbursement Policy).  However, do not include these funds as “Could Have Been Disbursed” if the student has not yet signed their master promissory note (MPN). 

The school is allowed to credit any Title IV grant funds to the student’s account as soon as possible but no later than 45 days after the date of the school’s determination that the student withdrew (no confirmation from the student is required).  If loan funds can be used to credit the student’s account, the school is required to notify the student (or parent in cases of PLUS Loans) within 30 days of the school’s determination that the student withdrew.  Regardless of the amount owed on the student’s account, the school must have student or parent authorization (PLUS Loan) to credit the student’s account with any Title IV loan funds.

If a student does not have any outstanding current semester charges, any post-withdrawal disbursement is offered to the student or parent (in cases of PLUS Loans).  The student/parent must be notified in writing within 30 days of the school’s determination that the student withdrew.  The letter must identify the type and amounts of the funds.

If loan funds are available, the school must explain that the student/parent has the option to accept/decline all or part of the loan.  The letter must also inform the student/parent that a response must be received within 14 days of the date of notice.  If the school does not receive a response, no further disbursement is made.  If the response is received in a determined that the student withdrew.  Exceptions can be made at the discretion of the Director regarding the responses received after 14 days.  If the request is denied due to a late response, the school with send the student/parent a letter.

Any Title IV credit balances created due to the post-withdrawal disbursement will be  disbursed to the student’s account based on timeframes indicated above and refunded to the student as soon as possible, but no later than 14 days.

The late disbursement policy adheres to the federal regulations to provide ineligible students who would have been otherwise eligible, with a portion of their financial aid awards for the current or past period of enrollment.  Students who qualify for a late disbursement did establish initial eligibility for their aid and met the terms of late disbursement eligibility as set forth in the Code of Federal Regulations (34 CFR 668.164(g).

Conditions for a Late Disbursement

Pell Grant

If a valid FAFSA Submission Summary with an eligible Student Aid Index (SAI) has been received before the student’s last day of enrollment but the student has been selected for Verification, the school has up to the earlier of either 120 days from the last date of enrollment or the last date provided by the Federal Register to make the corrections and receive a revised ISIR.  The student is entitled to a Pell Grant disbursement that increased due to the verification process.

Federal Stafford Loan & PLUS Loan

The following policy applies to recipients receiving a Direct Stafford and PLUS loans who have officially or unofficially dropped below half-time.  To be eligible for the loan funds, the loan must have been originated before the student became ineligible and cannot be the second disbursement unless the student has successfully completed the days in the loan period.

Determining the Percentage of the Completed Semester

Student Financial Services- Financial Aid Office will determine how many days the student attended.  The date used to determine how many days completed will be the last class the student dropped or reported as having ceased attending.  The number of days completed will then be divided by the total number of days within the semester.

An unofficial drop occurs when the student does not formally drop the class but ceases to attend or withdraws online without completing the formal withdrawal process.  Once the last date of the academic engagement has been determined, the percentage is calculated using the above procedure.

The school has 180 days from the date the student becomes ineligible to make a late disbursement.  The school may credit a Federal Pell Grant award to the student’s account for tuition, fees, housing, and meals without the permission of the student or parent.  A late disbursement of Stafford or PLUS Loan cannot be credited to the student’s account without documented proof of acceptance from the student and/or parent.  If the student does not owe a balance to the university but is eligible for a late disbursement of Pell Grant, Stafford, or PLUS Loan, the student must accept the late disbursement before the funds can be disbursed to the student/parent.

Amount of Late Disbursement – Title IV Grant

School: The school will credit the student’s account with the amount of the award that corresponds with the SAI and eligible credit hours as of the date paying the funds.

Amount of Late Disbursement- Title IV Loan

School: The school will credit the student’s account with the greater of the amount of institutional charges owed, or the percentage of the loan funds the student is eligible based on the official withdrawal date or academic engagement (if reported) for that term.

If the federal Title IV aid disbursements to the student’s account are more than the institutional charges, this creates a Title IV credit balance.  Student Financial Services- Student Accounts Office pays the credit balance to the student by either sending the funds through direct deposit or by check no later than 14 days after the first day of class of a payment period or the date the balance was created if that date was after the first day of classes.

When Student Accounts Office notifies the Financial Aid Office that a student has a refund check that has not been cashed within 240 days, Student Financial Services- Financial Aid Office returns the unclaimed funds in the same order as stipulated by the federal Return calculation.  Student refund checks are only valid for 120 days; therefore, Student Financial Services- Student Accounts Office can request that the funds be returned any time after 120 days but by 240 days.

Note

If the refund is a direct result of the state aid, funds will be escheated to the state.  If the refund is based on institutional, it is returned to the appropriate program. 

The following policy is based on the published tuition withdrawal/refund guidelines each semester. Typically, if a student withdraws or drops a class within a specified time period, the student may be granted either a 100, 80, 60, 40, or 20 percent tuition refund.  Students with documented extenuating circumstances may request a backdated withdrawal date from the Office of Registrar that may result in a tuition refund. This policy addresses how financial aid will be adjusted and if the amount of tuition refunds is given to the student or returned to a specific program.  Tuition refunds will first offset any charges owed due to the aid adjustments.

For students that are granted a 100 percent withdrawal, an R2T4 will be completed with the possibility of returning all Title IV funds back to the Department of Education in order to benefit the student and allow aid to be administered at another university should the student enroll elsewhere.