Avoiding Pitfalls in R2T4 2014

Avoiding Pitfalls in the Return of
Title IV
John Gritts - MSURSD
Basic Principles
Title IV funds are awarded to a student with the
assumption that the student will attend school for the
entire period for which the assistance is awarded
How much will the school earn?
When a student ceases attendance prior to the
planned ending date, the student may not be eligible
for the full amount of Title IV funds the student was
scheduled to receive
How much did the student earn?
Basic Principles
Student earns Title IV aid equal to the amount of
Percentage of aid earned equal to percentage of payment
period or period of enrollment completed
School has disbursed more aid than student earned, Title
IV aid must be returned to the programs
School has disbursed less Title IV aid than student earned,
a post-withdrawal disbursement (PWD) calculated and
Basic Principles
Student completes more than 60% of the PP or
POE, student earned 100% scheduled Title IV
• Institutional or other refund policies do not impact
amount of Title IV aid earned R2T4 calculation
• School use best information available to determine
withdrawal date (document)
Student never in attendance student is not an
eligible student for Title IV funds
o All Pell, FSEOG, and Iraq Afghanistan Service
Grant funds must be returned
o DL funds credited to the student’s account
must be returned
o The DL loan servicer must be notified when
funds were disbursed directly to the student
• No R2T4 Required
Consumer Information
Refund policy the school must comply for the return
of unearned funds
State / Accreditor
School’s refund policy
Requirements for treatment of Title IV funds after
Institution’s procedures to officially withdraw
Two Types of Institutions
• Required
to Take Attendance
Required to Take Attendance
Institution Required to Take Attendance
“Institution Required to Take Attendance” if o Outside entity requires attendance taken
o or institution requires take class attendance
Must use official attendance records determine
withdrawal date (WD)
NOT Required To Take Attendance
• Not required to take attendance by an
outside entity
• Most institutions fit into this category
Withdrawal Date
Date the institution uses to determines Earned
and Unearned Title IV Funds for R2T4
• Institution Required to Take Attendance
Last date of Attendance is based on attendance records
school required to maintain
o School must have a process to determine when a
student is no longer attending
Withdrawal Date
• School NOT Required to Take Attendance the
Withdrawal Date Is:
o Date student began formal withdrawal
process or provided official notification
o When school determines student no longer
o If because of illness, accident, etc.
o Last date of an academically-related activity
Academic Attendance
“Academic attendance” and “attendance at
an academically-related activity” include,
but are not limited to:
Physically attending a class with direct
o Academic assignment submission
o Taking an exam, interactive tutorial, or a
computer-based instruction
Academic Attendance – cont’d
• Attending
a school-assigned study
• Participating in an online discussion
that is academically-related
• Interacting online with faculty about
subject matter or to ask courserelated questions
Academic Attendance
An academically-related activity DOES NOT
o Living in institutionally provided housing or
participating in the meal plan
o Logging
into an online course without active
o Participating
in academic counseling or advisement
Academically-Related Activity
School not required to take attendance MAY
ALWAYS use last date of academically-related
activity as withdrawal date
The school, not the student, must
o Activity is academically-related, and
o Student’s attendance at activity
Date of Determination
For an Institution Required to Take Attendance
• The date the student provides notification that
he or she is ceasing enrollment
• The last date of attendance (LDA)
The institution must have a process in place that
will determine when a student’s absence is a
oSee GEN-04-12, 11/17/04
Date of Determination
For an Institution NOT Required to Take Attendance
o The date the student provides notification
o The date the institution becomes aware that the student
ceased attendance
o A determination must be made at the end of the earlier
1) The payment period or the period of enrollment,
2) The academic year, or
3) The student’s educational program
Date of Determination-Deadlines
Within 30 days, the institution must:
o Perform the R2T4 calculation
o Notify the student of any grant overpayment
o Notify the student of eligibility for a post-withdrawal
disbursement (PWD)
Institution must return the Title IV funds it has
responsibility to return within 45 days
Institution must make the PWD to the student and/or
parent (in the case of a PLUS loan) within 180 days
The Institution Must
Determine date of student’s withdrawal
• Calculate percent of period completed
• Determine amount earned by applying
percent completed to total of amounts
disbursed and amounts that could have
been disbursed
• Return unearned funds to Title IV programs,
or pay student post-withdrawal
• Determine Title IV overpayment, if any
Aid that Could Have Been Disbursed
In addition to the Title IV aid that was disbursed,
include aid that could have been disbursed if –
o Conditions for late disbursements in 34 CFR
668.164(g)(2) were met prior to the withdrawal
 ED processed the ISIR/SAR with an official
 FSEOG – school made the award
 Direct Loan – school originated loan
The Return to Title IV Funds Rule
An institution is required to determine the earned and
unearned portion of Title IV aid when a student ceases
enrollment prior to the planned completion date of the
payment period or period of enrollment
o NOTE: Up through 60% of the Payment Period (PP) or
Period of Enrollment (POE) an otherwise eligible student
earns Title IV aid on a pro rata basis. After the 60% point student has earned 100% of TIV aid
o ALSO: The return calculation is still required even if the
student has earned 100%, to determine whether a postwithdrawal disbursement is required
When to Perform a Return Calculation
A Return of Title IV Funds calculation must be
performed when any student who received, or
was eligible to receive, Title IV aid ceases
attendance in all classes
• A return calculation is not required if the student:
Never began attendance at the school.
Continues to attend at least one Title IV-eligible class.
Is on a leave of absence
Did not receive, and is not eligible to receive Title IV
Received, or eligible to only receive, FWS
Possible outcomes when R2T4 calculated
Amount of Title IV funds exceeded amount
earned and funds must be returned
Amount of Title IV funds less than amount earned
and a post-withdrawal disbursement must be
Amount of Title IV funds equals amount earned
Post-withdrawal disbursement (PWD)
If amount of the Earned Title IV funds
exceeds amount disbursed, the difference is
due the student as a “Post-Withdrawal
Disbursement” (PWD)
• Must meet the late disbursement
• The PWD must be made from grant funds
before loan funds
Post-withdrawal disbursement (PWD)
A PWD comprised of grant funds may be
used to pay the following current charges:
o For tuition
o For fees
o For room and board, if contracted with the
PWD – Grant Funds
No student confirmation required to pay
current outstanding charges for tuition, fees,
room, and board listed on previous slide or for
prior year charges up to $200
• Written confirmation is required for all other
current charges
• If disbursed directly to the student, must be
disbursed as soon as possible, but within 45
days of the Date of Determination
PWD – Loan Funds
If Title IV loan funds are part of the PWD then
o It must be made within 180 days of the Date of
o It cannot be a second or subsequent disbursement
of a Direct Loan (DL)
o School cannot make a late disbursement of a DL if
the student was a first year, first-time borrower
unless the student completed the first 30 days of the
program or the school was not under that restriction
PWD – Loan Funds – Cont’d
• Must
offer the student (or parent in the case
of a PLUS) the PWD within 30 days of the
Date of Determination and request
confirmation that the PWD is accepted
• Must
obtain authorization to pay for other
than current charges
PWD Loan Funds - Notifications
Required notifications
─Within 30 days of the Date of Determination, the
school must notify the student (and parent in the
case of a PLUS loan)
oExplain that the borrower may decline all or a
portion of the loan disbursement
oRequest confirmation of any amount to be
credited to the student’s account or directly
disbursed to the borrower
oExplain the obligation to repay the loan
PWD Loan Funds Notifications Cont’d
Required notifications
o Specify a deadline of at least 14 days for
required response/confirmation
o If the response is late, the school may decide to
not disburse
o If the school decides to not disburse, must notify
the borrower in writing
o If no response from the borrower, no
disbursement of the PWD – loan amount
Unearned Funds - School’s Responsibility
Institution MUST return funds within 45 days of the
date of determination
Title IV funds – are returned to the program
Unearned Funds - Student’s Responsibility
Unearned Title IV funds that are the
responsibility of the STUDENT
o If loan funds, they can be repaid under
terms of the promissory note
o If grant funds, they are subject to a 50%
reduction and the student may make
satisfactory arrangements to repay
R2T4 and Title IV Credit Balances
Hold all Title IV credit balances until R2T4
Credit balance is “Aid/Amount Disbursed” in the
Determine if credit balance changes because of a
State, accreditor, or institutional refund policy
After the R2T4 calculation - use any remaining
credit balance to first repay a grant on behalf of
Release credit balance within 14 days
No Passing Grades
School must have a process for determining if
student completed
• At least one passing grade...
• No passing grade, institution must document
completion of period
• Grading Policy that differentiates between
Failing, Completed; and Failing, Did Not
Additional Resources
Resources – www.ifap.ed.gov
What’s New
Tools for Schools
Hot Topics
Letters & Announcements
Default Prevention
Training and Conferences
FSA Assessments
FSA Assessments
• Self-assessment tool designed to assist
schools in evaluating their financial aid
policies, processes, and procedures
• Includes assessment modules regarding
Students, Schools, and Campus-Based
R2T4 on the Web (R2T4 OTW)
ED’s Free R2T4 Software on the Web
Sign up for R2T4 OTW
• Signup via SAIG Enrollment website
‒ https://fsawebenroll.ed.gov/PMEnroll/index.jsp
• The R2T4 Web Application will be available via
FAA Access
‒ https://faaaccess.ed.gov/FOTWWebApp/faa/faa.js
• Set up a simple school profile one or two popular
programs and academic calendar; do not try to
build costs for each program
• Track post-withdrawal disbursement notification
R2T4 Software Suggestions
Software located on SFAdownload.ed.gov
oaStand-alone software
oaListed in Archives - July 11, 2000
• Quick Reference Guide
• On-line Help
R2T4 Software Suggestions
Import demographic information from external
• 45-day limit alarm
• 14-day PWD/Cash Management alarm
• More On-Line Help
R2T4 Software Suggestions
Add a check box on PWD Tab for initial or
subsequent disbursement indicator
Note - if the student’s original Title IV grant
overpayment is less than $25, a message box
indicates “De Minimis Amount”
Transmit R2T4 information to NSLDS and ED
Collection Services
LOA date tracking
Report writer to generate notices/letters
Other Resources
Section 484B of the HEA
‒ Enacted October 7, 1998, as part of the Higher
Education Amendments of 1998
Final Reg. published November 1, 1999
Dear Colleague Letter GEN-00-24
Final Reg. published November 1, 2002
Dear Colleague Letter GEN-04-03
Dear Colleague Letter GEN-04-12
Other Resources (cont’d)
Dear Colleague Letter GEN-05-16
• Final Regulation published October 29,2010
• Dear Colleague Letter GEN-11-14
• IFAP – Program Integrity Q’s & A’s – Return of Title
IV Funds
o General Questions Programs Offered in Modules
Institutions Required to Take Attendance
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