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Return of Title IV Funds

A statutory schedule is used to determine the amount of federal funds a student has earned when he or she ceases attendance based on the time period the student was in attendance. If a student has been approved to receive a Title IV grant or loan and then withdraws from an institution during a payment period or period of enrollment in which the student began attendance, the institution must begin the Title IV Refund (R2T4) process to determine the students eligibility of Title IV funds in accordance with the calculations prescribed by regulations.

If a student obtains a loan to pay for the course of instruction, the student will have the responsibility to repay the full amount of the loan plus interest, less the amount of any refund.

If the student is eligible for a loan guaranteed or insured by the state or federal government and the student defaults on the loan:

  • The federal or state government or the loan guarantee agency can take action against the student, including applying any income tax refund to which the person is entitled to reduce the balance owed on the loan; and
  • The student may not be eligible for any other federal financial assistance for education at a different school or for government housing assistance until the loan is repaid.

There are several factors used to determine Title IV Refund (R2T4) calculations: official or unofficial withdrawal date, payment period or period of enrollment, amount of aid that was disbursed, amount of aid that could have been disbursed, percent of Title IV earned, post-withdrawal or late disbursement, institutional cost, amount of Title IV aid to be returned (if applicable) and time limits and reporting requirements. If the calculations state the student needs to return some funds beyond the portion that the school must return, the percentage of the Title IV grant funds the student needs to return is no more than 50% of the total Grant assistance that was disbursed. 

Up through the 60% point in each payment period or period of enrollment, a pro-rated schedule is used to determine how much federal funds the student has earned at the time of withdrawal. After the 60% point in the payment period or period of enrollment, a student has earned 100% of the federal funds. Upon the completion of Title IV Refund (R2T4) a school is required to determine if a post-withdrawal disbursement is necessary for funds earned and not disbursed to students and/or parents. All withdrawals must undergo Title IV Refund (R2T4) if federal monies apply.

Determination of the Withdrawal Date

At USU students’ withdrawal date for purposes of R2T4 calculation will always be the last date of attendance as determined by the attendance records.

Date of Determination

The date of determination used in the R2T4 calculation is based on one of the following occurrences:

  • The date the student officially notifies the school that they are withdrawing from all credit courses, which may be different than their last date of attendance.
    • The student may provide intent to withdraw for a future date. The date of determination used will be the intended date provided by the student.
  • The institutions date of determination for students that unofficially withdraw is the date of the 15th day following the students last date of academic attendance as determined by the attendance records.

Time-Frame in which the R2T4 is calculated

The University is a term-based institution. R2T4 is calculated on the basis of a semester/payment period. The definition of a payment period for USU is 16 weeks.

Scheduled Breaks

Scheduled breaks of five or more consecutive days are excluded from the calculation of R2T4 as periods of non-attendance. The withdrawal date for students that withdraw during a scheduled break will be the last date of academic attendance as determined by the attendance records for purposes of R2T4 and the date the student notified the University that they would not be returning becomes the Date of Determination.

R2T4 calculation

In order to determine the percentage of the payment period completed, the number of days attended in the payment period is divided by the total days in the payment period. For the purpose of this formula, days mean all calendar days, and therefore include weekends and holidays. Only scheduled breaks of 5 days or more and approved leave of absences are excluded.

If the percentage of the payment period completed is 60% or greater no further calculation is required. The R2T4 Form must be maintained in the student’s permanent record. The net amount of the Title IV funds disbursed and what could have been disbursed for the payment period is multiplied by the percentage of the payment period completed. The result is the amount of earned Title IV aid. The earned aid is subtracted from the aid that was actually disbursed or all that could have been disbursed to or on behalf of the student.

Total Aid to be Disbursed or Returned

If the student receives less aid than the amount earned, the school will offer the student a disbursement of the earned aid that was not received. (Post-withdrawal disbursement)

Post-withdrawal disbursements

The University will disburse available grant funds before available loan funds. No authorization is required to pay for current charges for tuition and fees with a Post-withdrawal disbursement. The University must obtain confirmation from the student or the parent (for a PLUS loan) before making a post withdrawal disbursement of any loan funds. Notification will be sent to the Student no later than 30 calendar days after the Date of Determination to include:

  • The borrower’s repayment options
  • A request for permission to credit loan funds to a student’s account to cover unpaid institution charges;
  • Obtain permission to make a post withdrawal disbursement of grant or loan funds for charges other than institutional charges if applicable; and
  • Obtain permission to make a Post-withdrawal disbursement of loan funds directly to a student if applicable.
  • Notification will have a deadline of 15 days for the Student and Parent to respond.
  • The University will credit the students account with any Post Withdrawal Disbursement no later than 180 days from the date of determination.

Order of Return of Title IV Funds at United States University

If the student receives more Title IV Aid than the amount earned by the University, the Student or both must return the funds in the order specified below.

  • Unsubsidized Direct Stafford Loans (Other than PLUS)
  • Subsidized Direct Stafford Loans
  • Direct PLUS loans
  • Federal Pell Grants
  • Federal Supplemental Educational Opportunity Grants (FSEOG)
  • Federal TEACH grants
  • Iraq and Afghanistan Service Grant

Time Frame for the Return of Title IV Funds

United States University will return funds for which it is responsible as soon as possible, but no later than 45 days from the determination of a student’s withdrawal. A return is timely if the University does one of the following as soon as possible but no later than 45 days after the date it determines the student withdrew.

  • Deposits or transfers the funds into the schools federal funds bank account and then awards or disburses the funds to another eligible student;
  • Returns the funds electronically using the refund function in G5;
  • Issues a check to the Department of Education;
  • An issued check is considered timely if the schools records show that the check was issued within 45 days of the date of determination and the date on the cancelled check shows that the bank endorsed the check no more than 60 days after the date of determination.

The Federal Refund Policy (R2T4) is very encompassing and is intended to be an overview of the policies and procedures that govern regulations pertaining to Title IV Refund (R2T4) and is not inclusive. For further guidance on Title IV Refund‘s (R2T4) policies and procedures please see the reference material found in Volume 5 of the Federal Student Aid Handbook under Withdrawals. You may access a copy in the Financial Aid Department.

Washington State Residents

For Washington State residents seeking information and resources about student loan repayment or seeking to submit a complaint relating to your student loans or student loan servicer, please visit www.wsac.wa.gov/loan-advocacy or contact the Student Loan Advocate at loanadvocate@wsac.wa.gov.