J-625.2 Federal Title IV Return of Funds (R2T4)

This Procedure explains how Title IV federal student aid (FSA) funds are handled when a recipient ceases to be enrolled (100% withdrawal) before the end of a semester. These requirements do not apply to Students who do not actually begin attendance for a semester.

FSA funds (including Pell Grant, Supplemental Education Opportunity Grant (SEOG), Iraq and Afghanistan Service Grant (IASG), and Federal Direct Student Loans (subsidized, unsubsidized, and Parent PLUS) are awarded under the assumption that the Student will complete the entire period for which FSA is being awarded. Based on their withdrawal date, Students who do not complete the whole period may not have earned the total amount of FSA they were initially awarded. The College makes this determination by completing a Return of Title IV Funds (R2T4) calculation, explained below.

For this Procedure, the word “courses” refers to classes required for graduation from a Student’s declared program of study (major) eligible for FSA funding. In other words, if a Student withdraws from all the courses required for graduation from their program but remains in courses that are not necessary, the Student may be 100% withdrawn for financial aid purposes.

TYPES OF WITHDRAWALS

Official Withdrawal – When a Student withdraws from their courses by following the withdrawal Process described in the Student Handbook under “Adding/Dropping Courses.”

Unofficial Withdrawal – When a Student does not officially withdraw but ceases to attend their courses.

Administrative Withdrawal – When the College withdraws a Student from their courses.

WITHDRAWAL FROM A PROGRAM OFFERED IN MODULES

The College offers some courses in modules. Modules are courses that start and end within a semester but are shorter than an entire semester. Suppose a Student enrolled in modules withdraws officially or unofficially from their current courses. In that case, the Student is withdrawn for FSA purposes unless the Student qualifies for one of the R2T4 exemptions listed below or provides the College with written confirmation that they will attend a future module scheduled to begin in the same semester and within 45 days after the scheduled end of the module from which they withdrew. The Student must provide the written confirmation at the time of withdrawal. The Student must also be registered for the future module. If the Student fails to attend the future module, the Student is withdrawn from the semester.

R2T4 Exemptions for Students Enrolled in Modules

A Student who withdraws or ceases to attend during a semester in which they were enrolled exclusively in modules is not considered to be withdrawn for FSA purposes, nor are they subject to an R2T4 calculation if they meet one of the following exemptions:

• They complete all the requirements for graduation*.

• They successfully complete a course or multiple courses that comprise at least 49 percent of the days in the semester.

• They successfully complete a course or multiple courses that comprise at least half-time enrollment within the semester.

^* This R2T4 exemption applies to all Students, regardless of whether the Student is enrolled in modules.

R2T4 Freeze Date – Colleges can utilize a Pell Grant R2T4 freeze date for Students enrolled in modules. The College does not use an R2T4 freeze date.

PERCENTAGE OF FSA EARNED

Except as noted under R2T4 Exemptions for Students enrolled in modules above, when an FSA recipient withdraws from a semester after beginning attendance but before completing 60% of the semester, the College will determine the amount of FSA earned by completing a Return of Title IV Funds (R2T4) calculation. The percentage of earned aid is determined by dividing the number of days the Student completed in the semester by the number of calendar days, including weekends and holidays, and excluding any scheduled breaks of five or more consecutive days. A Student is considered to have earned 100% of their FSA once they have completed 60% of the semester, and no R2T4 calculation is required.

Example: If the fall semester begins on August 21 and ends on December 15, there are 117 calendar days between the two dates. If the semester includes a six-day break from November 21 through November 26, 111 days (117 calendar days – 6 break days) are the denominator in the calculation. If a Student’s withdrawal date is October 9 (the 50th day of the semester), the Student has earned 45% (50 days completed ÷ 111 total days) of their FSA.

50 days completed ÷ 111 days in semester = 45% FSA funds earned

 WITHDRAWAL DATE

For a Student who officially withdraws, the official withdrawal date is used to calculate the percentage of FSA the Student earned. When a Student unofficially withdraws during the semester, the withdrawal date is the last date of documented academically related activity or the semester's mid-point. If a Student is administratively withdrawn, the withdrawal date is the date of the administrative withdrawal or the last date of academically related activity. Suppose a Student ceases attendance (drops or withdraws) from all their federal financial aid-eligible courses in a payment or enrollment period. In that case, the Student must be considered a withdrawal for FSA purposes.

FSA CREDIT BALANCES AT THE TIME OF WITHDRAWAL

If, at the time of withdrawal, a credit balance of FSA funds exists on a Student’s account, the credit balance will be retained on the Student’s account until the R2T4 has been completed. After the R2T4 calculation has been completed, any remaining FSA credit balance will be disbursed as soon as possible but no later than 14 days after the R2T4 completion date.

POST-WITHDRAWAL DISBURSEMENTS

Suppose the amount disbursed for a withdrawn Student is less than the amount earned by the Student as determined by the R2T4 calculation. In that case, the Student may be eligible to receive a post-withdrawal disbursement of the earned FSA funds that had not yet been disbursed to the College. Post-withdrawal disbursements of grant funds will be disbursed within 45 days of the date the school determined that the Student withdrew.

The College will offer any post-withdrawal disbursement of loan funds within 30 days of the date the school determined the Student withdrew. Students have 14 days from the notification date to accept post-withdrawal loan disbursements. Accepted post-withdrawal loan disbursements will be processed no later than 180 days from the date the College determined that the Student withdrew.

All post-withdrawal disbursements will be applied to a withdrawn Student’s account first. Suppose a credit balance remains after post-withdrawal disbursement funds have been used toward eligible charges on the account. In that case, the credit balance will be disbursed to the Student as soon as possible but no later than 14 days from the disbursement date.

RETURN OF UNEARNED FSA FUNDS

If FSA funds disbursed to the College for a Student who withdraws exceed the amount earned by the Student as determined by the R2T4 calculation, the College and the Student may be required to return unearned funds to the U.S. Department of Education (ED). As part of the R2T4 calculation, the Student’s repayment obligation is determined after the College’s share is calculated. The Student is obligated to recoup the College for any unearned funds that the College is required to return on behalf of the Student. As such, withdrawn Students may have payment obligations to both the College and ED and payments for earned Direct Loans.

Unearned Funds to be Returned to ED by the College

The R2T4 calculation determines the portion of unearned funds that the College must return to ED. The College will return an amount equal to the lesser of:

• The unearned FSA funds.

The institutional charges incurred for the semester are multiplied by the percentage of unearned FSA funds.

The College must return this amount to ED even if the Student has already directly received some or all the FSA funds in the form of a refund from the College.

The College will return unearned FSA funds for which the college is responsible within 45 days of the date the school determined the Student withdrew. The College will return unearned FSA funds to ED in the following order, up to the net amount disbursed from each source.

1. Direct Unsubsidized Loan

2. Direct Subsidized Loan

3. Direct PLUS Loan

4. Pell Grant

5. IASG

6. SEOG

Unearned Federal Loan Funds to be Returned to ED by a Withdrawn Student

If the College determines that a Student (or Parent, for Direct PLUS loan funds) is responsible for returning unearned Federal Direct Student Loan funds to ED, the Student or parent will repay their loan servicer the unearned funds under the terms and conditions of the Master Promissory Note under which the loans were disbursed. The loan balance repayable by the borrower may include both earned and unearned amounts.

The amount of unearned grant funds due from a withdrawn Student is called an “overpayment.” Overpayments are initially calculated by subtracting the amount of unearned Federal Direct Student Loans the Student owes from the total amount of unearned FSA funds due from the Student. Federal regulations limit the amount of grant overpayment due from a Student to the amount by which the original grant overpayment exceeds half of the total FSA grant funds disbursed and could have been disbursed to the Student for the semester. Students are not required to pay any grant overpayment of $50 or less.

Within 30 days of determining that a Student owes an overpayment, the College will notify the Student by mail of their overpayment and their options for resolving the overpayment. Suppose the Student does not exercise one (1) of the two (2) options listed below within 45 days of the issuance of the notification. In that case, the College will notify ED of the unresolved overpayment and will refer the overpayment to ED’s Default Resolution Group for collection. Students with an unresolved grant overpayment are ineligible to use FSA funds at any institution of higher education.

Within the 45 days following the notification of overpayment status, the Student may take either of the following actions to retain eligibility for FSA funds beyond the 45 days:

Option 1: The Student may repay the overpayment in full to the College.

Option 2: The Student may sign a repayment agreement with ED.

BALANCES OWED TO THE COLLEGE

Withdrawn Students are responsible for paying any debit balance on their Student account after the completion of the R2T4 calculation and any consequent return of FSA funds to ED by the College.