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502-4-Return-of-Title-IV-Funds

Title: Return of Title IV Funds
Owner: Office of Financial Aid
Last Updated/Revised: 05/01/2024

Policy: Title IV funds are awarded to a student under the assumption the student will attend the entire payment period or period of enrollment. If a student who receives Title IV grant or loan funds withdraws from the University, after beginning attendance, the amount of Title IV grant or loan assistance earned by the student must be determined.

The Return to Title IV (R2T4) calculation is used to determine if the amount of Title IV funds disbursed to the student is greater or less than the amount of aid the student is eligible to receive or earned for the payment period or period of enrollment.

The purpose of this policy is to establish reasonable standards for returning federal financial funds for students who complete withdraw from the University and/or withdraw from all courses in a given payment period. These students must have a Return of Title IV Funds (R2T4) calculation performed to determine the percentage of aid earned during the period of enrollment that the student ceased attendance at the University.

Purpose:

Withdrawal Date

As an institution that requires attendance to be taken, a student’s withdrawal date is the student’s LDA as determined by using official attendance records. The withdrawal date is used to determine the percentage of the payment period or period of enrollment completed, and therefore how much Title IV aid is earned.

A student is considered to have withdrawn from a payment period or period of enrollment when:

  • The student does not complete all the days in the payment period or period of enrollment that the student was scheduled to complete.
  • The student ceases attendance and is not scheduled to begin another course within a payment period or period of enrollment for more than 45 calendar days after the end of the module the student ceased attending.

Date of Determination

The date of determination (DOD) is the date that the University determined the student withdrew. This will vary for official and unofficial withdrawals.

  • For recipients of Title IV funds, the Department of Education has determined that the DOD may not exceed 14 days after the student’s last date of attendance (LDA).
  • If the student officially notifies the school of when they will withdraw, that withdrawal date will be the same as the DOD.
  • Per the school’s continuous enrollment policy, students will be considered active for 30 days (for academic purposes only). However, if the student eventually is determined to be withdrawn, the DOD of the student’s withdrawal remains 14 days after the student’s LDA.

Note: An R2T4 calculation is not required in the following situations:

  • The student never actually began attendance for the payment period.
  • The student withdraws from one or more courses but continue to attend at least one course within the mod.
  • The student provided an intent to return to another course within the same payment period at the time of withdrawal.
  • The student began attendance but was not eligible to receive Title IV grant or loan funds prior to the date of determination (the student is not considered an eligible Title IV recipient).

R2T4 Withdrawal Exemptions

be considered a withdrawn student for Title IV purposes. The withdrawal exemptions apply to both undergraduate and graduate students and the student only needs to meet one of the exemptions to be exempt from an R2T4.notThe Department of Education (DOE) established withdrawal exemption criteria in final regulations published in September 2020, which if met, allows a student who has withdrawn or otherwise ceased attendance to

The withdrawal exemption categories are as follows:

  1.  Withdrawal exemption for graduates/completers
    1. A student who completes all the requirements for graduation from his or her program, before completing the days in the period that he or she was scheduled to complete, is not considered to be withdrawn. This exemption applies to all types of programs.
  2. Withdrawal exemptions for programs offered in modules
    1. A student is not considered to have withdrawn if the student successfully completes one module that includes 49 percent or more of the number of days in the payment period, excluding scheduled breaks of five or more consecutive days and all days between modules.
    2. A student is not considered to have withdrawn if the student successfully completes a combination of modules that when combined contain 49 percent or more of the number of the days in the payment period, excluding scheduled breaks of five or more consecutive days and all days between modules.
    3. A student is not considered to have withdrawn if the student successfully completes coursework equal to or greater than the coursework required for the University’s definition of a half-time student under § 668.2 for the payment period.

When a student meets the conditions for a withdrawal exemption, the student is treated as having completed the payment period and is considered enrolled through the end of the period, even if the student later stops attending future coursework or modules in that period.

Procedure:

Calculation of Earned Aid

USU divides the number of days enrolled/scheduled in the payment period, prior to withdrawal, by the total number of days attended in the payment period, to determine the amount of aid the student has earned at the time of withdrawal. That ratio is applied to the to the amount of Title IV funds that were “disbursed” or “could have been disbursed”.

For Pell only recipients, the student must have a valid ISIR on file with an official EFC before the deadline date established by the DOE.

Undisbursed loan funds may be included as aid that “could have been disbursed” provided the following conditions are met:

  1. The student has a valid Institutional Student Information Record (ISIR) on file with an official Expected Family Contribution (EFC) before the deadline established by the DOE;
  2. The loan was originated prior to the student’s last date of attendance and was eligible for disbursement;
  3. The student was enrolled at least half-time and attended less than half-time for loan recipients;
  4. A promissory note must have been signed by the student for the loan to be included in “aid that could have been disbursed”. The signature on a promissory note may be obtained after the student withdraws provided the signature is obtained prior to completing the R2T4 calculation.

In some cases, not all funds may be included in “could have been disbursed”:

  1. A second or subsequent disbursement of Direct Loan funds, unless the student successfully completed the loan period;
  2. A first disbursement of Direct Loan funds for a first-year, first-time borrower who withdraws prior to the 30th date of the student’s program of study;
  3. A first disbursement of Direct Loan funds for students enrolled in a modular program, who is withdrawn before beginning attendance in enough courses to establish at least half-time enrollment status in the payment period.

Through the 60% point in each payment period, a prorated schedule is used to determine the amount of Title IV funds the student earned at the time of withdrawal. If the student attends beyond the 60% point in the payment period, the student is considered to have earned 100% of the Title IV funds they were scheduled to receive during the period. In this situation, there are no unearned funds; however, an R2T4 is still required as the University must still determine whether the student is eligible for a post-withdrawal disbursement.

Order of Return of Title IV Funds

When a student receives more federal student aid than the amount earned for the payment period, the University, the student, or both, are required to return the unearned funds up to the net amount disbursed to the programs from which the student received aid, in the following order:

  1.  Unsubsidized Direct Stafford Loans
  2. Subsidized Direct Stafford Loans
  3. Direct PLUS Loans
  4. Federal Pell Grants
  5. Iraq and Afghanistan Service Grants
  6. Federal Supplemental Educational Opportunity Grants (FSEOG)

The University must return the amount of Title IV funds for which it is responsible, no later than 45 days after the date of determination.

Post-Withdrawal Disbursement (PWD)

The University offers an eligible student (or parent borrower) a post-withdrawal disbursement (PWD) of loan funds within 30 days of the date of determination (defined below). The borrower is given 14 days to respond to the University to decline or accept the offered PWD funds. Students who decline the offered funds or fail to respond within the established timeframe will not have the offered PWD applied or returned to the student. If the student accepts a disbursement, the disbursement is made within 180 days of the date of determination.

If a student received less federal student aid than the amount earned, the University offers the student a post-withdrawal disbursement for any funds they are eligible for.

An accepted PWD of Direct or PLUS loan funding must be made within 180 days of the date of determination (DOD). A PWD of grant funds must be made within 45 days of the DOD. A PWD must be generated from available grant funds before available loan funds.

The University is not required to obtain confirmation from a student before processing a PWD of Title IV grant funds. However, confirmation from a student, (or parent for a parent PLUS loan), must be received before any disbursement of loan funds from PWD.

USU notifies a student, (or parent for parent PLUS loan), in writing prior to making any PWD of loan funds to the student’s account.

The PWD notice:

  1. Informs the student, (or parent for a parent PLUS loan), of his or her eligibility for a post-withdrawal disbursement.
  2. Identifies the type and amount of the loan funds available to credit to the student’s account and give the student (or parent for a parent PLUS loan) the option to accept or decline all or a portion of the funds.
  3. Explains to the student (or parent for a parent PLUS loan) the obligation to repay loan funds.
  4. Gives the student or parent 14 days to respond.
  5. Explains to the student or parent that if a response is not received within 14 days, United States University will not complete the PWD.

After the University has completed the post-withdrawal loan notification and receives confirmation from the student or parent affirming their desire to receive the PWD loan funds, the funds are credited to the student’s account and applied against current charges as soon as possible, but no later than 180 days after the DOD during which the student withdrew.

Scope: This policy applies to all students who withdraw from the University and/or withdraw from all courses in a payment period.

Documents and Forms: None