Understanding R2T4 Basics: Return of Title IV Funds Calculation

1. R2T4 � Return to Title IV Funds Marie Gillibrand State and Federal Grants Coordinator Illinois State University ILASFAA 2010 Conference

2. Today R2T4 basics R2T4 Calculation, steps 1-10

3. R2T4 basics

4. R2T4 basics: Who? Any student who receives federal aid from the following Title IV programs Grants--Pell, ACG, SMART,SEOG,TEACH Loans--Stafford, Perkins, PLUS does not complete the period for which aid was awarded

5. Why R2T4? Federal student aid is awarded based on the assumption that the student will attend the entire term. So, if student does not complete the term, they have not earned all of their federal aid

6. Why R2T4? Student is only entitled to the amount of Title IV funds student earned (based on how much of the term they attended) Unearned aid needs to be returned or �paid back� to the Department of Education

7. What R2T4 does: Performing an R2T4 determines how much federal aid a student has earned by attending part of a term how unearned aid is to be repaid

8. When does R2T4 apply? Official withdrawal Student begins the school�s withdrawal process, officially dropping all courses for the term Unofficial withdrawal If student fails to earn a passing grade in any class, school must assume student ceased attendance

9. When does R2T4 apply? For programs offered in modules: R2T4 applies if student withdraws before completing at least one course in one module (unless school has obtained confirmation from student that he/she intends to continue in the program by attending a module later in the term)

10. R2T4 regulations don�t apply If school can document that student completed period, or if student drops some but not all hours, even to less-than-half-time enrollment never begins attendance or is expelled before first class day earns at least one passing grade withdraws after completing at least one course in one module within the term

11. How to R2T4? R2T4 on web R2T4 paper worksheets

12. R2T4 On the Web Accessed via CPS online Individual aid administrator must be enrolled in SAIG

14. R2T4 on the web training announcement ANN-09-27training session, transcript, power point slides, and participant workbook available for download http://www.ifap.ed.gov/dpcletters/ ANN0927.html

15. R2T4 worksheets

17. R2T4 Calculation step by step

19. Our case study Name Ida Sample SSN/UID 123-45-6789 Date form completed 03/24/2010 Date of Determination that student withdrew

20. Date of Determination At school required to take attendance When the student begins the official withdrawal process at the school When student exceeds the institution�s policy on unexcused absences, not more than two weeks after the withdrawal date

21. Date of determination At a school required to take attendance: Date of determination should be no later than 14 days after student ceased attendance If, during the 14-day period, student verifies he/she plans to return, school should not consider the student withdrawn at that time

22. Date of Determination at schools not required to take attendance Official withdrawals the student�s withdrawal date, or date the student notified school of withdrawal Unofficial withdrawals the date the institution becomes aware that the student has ceased attendance

23. Date of determination Schools that are not required to take attendance must have mechanism in place to determine if student completed the period, or withdrew. (To identify unofficial withdrawals)

24. Date of determination At a school not required to take attendance: School must determine unofficial withdrawals within 30 calendar days of the earlier of: End of the payment period or period of enrollment End of the academic year End of the student�s educational program

25. Our case study Name Ida Sample SSN/UID 123-45-6789 Date form completed 09/17/20xx Date of Determination that student withdrew 09/15/20xx (Student dropped all classes via online registration, 09/14/xx @ 10:30pm) Period used for calculation

26. Payment period or period of enrollment? Which one to use?

27. Which period to use Must use �payment period� Standard term-based credit-hour programs May use either �payment period� or �period of enrollment� Nonstandard term-based programs Non-term-based credit-hour programs Clock-hour programs

28. Our case study Name Ida Sample SSN/UID 123-45-6789 Date form completed 09/17/20xx Date of Determination that student withdrew 09/15/20xx Period used for calculation Term based credit hour school ? Payment period

29. Step 1- Student�s Title IV Aid information TIV aid disbursed TIV aid that could have been disbursed

30. Aid disbursed These are funds that were delivered as of date school became aware that student withdrew Must have been credited to student�s account, or Given directly to student or parent For loans, use net amount, not gross

31. Aid that could have beendisbursed Any undisbursed Title IV aid is considered aid that could have been disbursed as long as conditions for late disbursement are met before student withdrew. Includes: 30-day delayed Stafford loan disbursements Second or subsequent FFELP and Direct loan disbursements

32. Aid that could have beendisbursed Conditions for late disbursement: � ED processed SAR or ISIR with EFC � If FSEOG or Perkins loan, was awarded by school � If FFELP or Direct loan: Loan was certified or originated, as applicable, by school prior to date of withdrawal Borrower completed MPN prior to school performing R2T4 calculation

33. Aid that could have been disbursed Inadvertent overpayment occurs when school unknowingly disburses funds to student who is no longer in attendance Is counted as �could have been disbursed� in R2T4 calculation May happen in �student fails to earn passing grade in at least one course� scenario ED has said it will review for a pattern or practice of inadvertent overpayments

34. Aid that could have beendisbursed & post withdrawal disbursements May not make PWD of second or subsequent disbursement of FFELP or Direct funds because student did not complete loan period May not make Stafford PWD if first-year, first-time borrower did not complete30-day delay period

35. Our case study: Ida Sample Aid disbursed 1,000 Pell 3,000 Unsub 2,000 Sub 4,000 Parent PLUS Aid that could have been disbursed = 0

36. Step 2- Percentage of TIV Aid Earned Withdrawal date Percentage of payment period or period of enrollment completed

37. Need to know: Start date End date Total # of days in period Exclude institutionally scheduled breaks of 5 or more consecutive days

38. Our case study: Ida Sample Fall 20xx Start date 08/18/20xx End date 12/07/20xx Total # of days in period 112 (No institutionally scheduled breaks of 5 or more consecutive days)

39. Withdrawal date Schools required to take attendance

40. Withdrawal date: schools required to take attendance IF an outside entity has a requirement that the institution take attendance THEN withdrawal date is the last date of attendance as determined by school�s attendance records

41. Withdrawal date Schools NOT required to take attendance

42. Withdrawal date: schools NOT required to take attendance Possible withdrawal dates: Date student began withdrawal process Date student provided intent to withdraw Date school determined that illness, accident, or personal grievous loss occurred Midpoint of period (if unofficial withdrawal) Date LOA began (for student who does not return from approved leave of absence

43. Withdrawal date: schools NOT required to take attendance MAY ALWAYS use the last date of an academically-related activity as the withdrawal date The school, not the student, must DOCUMENT that the activity is academically-related, and the student�s attendance at the activity.

44. Academically Related Activity Examples of academically-related activities are Examinations or quizzes; tutorials or computer-assisted instruction; completing an academic assignment, paper or project; attending a school assigned study group

45. Our case study: Ida Sample Fall 20xx School is not required to take attendance Student dropped all classes via online registration, 09/14/xx @ 10:30pm Withdrawal date for R2T4 is 09/14/xx

46. Percentage of period completed Credit hours or clock hours

47. Percentage of period completed For credit hour programs, % completed = calendar days completed calendar days in the period For clock hour programs, % completed = clock hours scheduled to complete clock hours in the period

48. Percentage of TIV Aid earned If % completed <= 60%, % of aid earned = % period completed If % completed greater than 60%, % of aid earned = 100%

49. Our case study: Ida Sample Withdrawal date of 09/14/10 = 28 days completed Percentage of payment period completed = 28 / 112 = 25.0% 25% < = 60% Percentage of aid earned = 25.0%

50. Withdrawals after 60% point You must still complete R2T4 calculation even if you know that student withdrew after 60% point in the period because You must be able to show that student earned 100% of his/her aid Student/parent may be entitled to a post-withdrawal disbursement

51. Retroactive withdrawals If school retroactively withdraws student for the period and provides 100% refund of institutional charges R2T4 applies if you have evidence that the student attended. Must still determine what amount of Title IV aid student earned while in attendance. R2T4 does not apply if student never attended. All aid should be cancelled and returned to programs.

52. Step 3- Amount of TIV Aid earned by the student (Percentage of period completed) * (Total TIV aid disbursed and could have disbursed for the period) = Amount of aid earned by the student

53. Our case study: Ida Sample Percentage of period completed = 25.0 % Total TIV aid disbursed and could have disbursed for the period = $10,000 Amount of aid earned by the student = 25.0% * 10,000 = 2,500

54. Step 4 � Total TIV Aid to be disbursed or returned Post-withdrawal disbursements TIV Aid to be returned

55. Step 4: comparing aid received to aid earned If the amount disbursed = the amount earned, then STOP--no adjustments to aid necessary

56. Step 4: comparing aid received to aid earned If the amount disbursed < the amount earned, then the student should be offered a post-withdrawal disbursement: Amount earned � amount disbursed = PWD

57. Post-withdrawal Disbursements

58. Post-withdrawal disbursements School may not make PWDs of: Second or subsequent FFELP or Direct loan disbursements Stafford loan disbursements that were subject to 30-day delayed delivery Loans for which the borrower did not complete the MPN prior to R2T4 calculation

59. Post-withdrawal disbursements If student owes school, school may credit student�s account Must give notification of PWD loan funds applied to student�s account within 30 days of date of determination Notification must allow student/parent the right to cancel PWD

60. Post-withdrawal disbursements If student does not owe, school must notify student/parent of availability of PWD within 30 days of date of determination Student/parent must be given 14 days to respond If student accepts, school must deliver PWD within 120 days of date of determination If student/parent responds after 14 days School can cancel PWD offer or School can deliver PWD at its discretion

61. Step 4: comparing aid received to aid earned If the amount disbursed > the amount earned, Then unearned portion must be returned to the programs

62. Our case study: Ida Sample Total TIV aid disbursed = $10,000 Amount of aid earned = $2,500 10,000>2,500 amount disbursed > the amount earned Then unearned portion must be returned to the programs

63. Step 5 - Amount of unearned TIV due from the school Institutional charges for the period Percentage of unearned TIV aid Amount of unearned charges Amount for school to return

64. Institutional charges Include charges for that applicable period ONLY Include tuition, fees, and room and board, if contracted with school

65. Our case study: Ida Sample Institutional charges, as of date of withdrawal Tuition 3,000 Fees 1,000 Room -0- Board -0-

66. Unearned aid School returns the lesser of: Total amount of unearned Title IV aid or An amount equal to the total institutional charges multiplied by % of aid unearned

67. Our case study: Ida Sample School returns: Total amount of unearned Title IV aid $7,500 or An amount equal to the total institutional charges multiplied by % of aid unearned $4,000 * 75% = $3,000

68. Step 6 � Return of Funds by the school Order of programs to return funds to How to return funds

69. Order of return of funds First to loan programs in this order, up to the amount initially disbursed � � Unsubsidized FFEL/Direct Stafford � Subsidized FFEL/Direct Stafford � Perkins � FFEL/Direct PLUS

70. Order of return of funds Then to grant programs in this order � Federal Pell Grant ACG SMART Federal SEOG TEACH

71. Our case study � Ida Sample Return first to loan programs in this order, up to the amount initially disbursed � Unsubsidized Direct Stafford $3,000 School returns -3,000 New fall 20xx Unsub loan -0- In this case, school is not required to return funds from remaining loans or grants, since $3000 is the amount school is to return.

72. Step 7 � Initial amount of Unearned TIV Aid due from the student

73. Step 7 Amount of unearned the student owes = Unearned aid less amount returned to school

74. Our case study � Ida Sample Unearned aid = $7,500 Amount returned by school = 3,000 Amount of unearned aid the student owes = 7,500 � 3,000 = 4,500

75. Unearned aid Student must return remaining unearned aid after school returns its portion Loans � borrower must return under terms of prom note Grants � student must return 50% of initial grant overpayment amount within 45 days Can make repayment arrangements with school or ED

76. Step 8 � Repayment of the Student�s loans

77. Unearned aid due from the student Student must return remaining unearned aid after school returns its portion Loans � borrower must return under terms of prom note

78. Order of return of funds First return funds to loan programs in this order � Unsubsidized FFEL/Direct Stafford Subsidized FFEL/Direct Stafford Perkins FFEL/Direct PLUS

79. Our case study � Ida Sample Unearned aid due from student = $4,500 Repay, according to terms of loan Sub loan -2,000 Parent PLUS -2,500 Remaining amount to return -0- STOP, R2T4 calc is complete

80. Step 9 � Grant Funds to be returned Initial amount of TIV grants to be returned Amount of TIV grant protection Title IV grant funds for student to retrun

81. Order of return of funds Then to grant programs in this order � Federal Pell Grant ACG SMART Federal SEOG TEACH

82. Step 10 � Return of Grant Funds by the student Order of programs to return funds to $50 floor Overpayments and collections

83. R2T4 Notifications required Grant Overpayment Notification 45-day period of extended eligibility Notify student w/in 30 days of Date of Determination that s/he must take Positive Action Fully repay the overpayment Make arrangements with school to repay Make arrangements with ED to repay Institutional monitoring

84. Questions? Thank you! Marie Gillibrand 309/438-5210 gillibrand@ilstu.edu

85. Deadlines Performing the R2T4 calculation (30 days) Returning unearned Title IV funds (45 days) Offering the student or parent a post-withdrawal disbursement (PWD) (30 days) Notifying student of overpayment due (30 days) Delivering a post-withdrawal disbursement (Loans, 180 days, grants 45 days)

86. R2T4 - Compliance Issues Top Compliance Concerns: Incorrect Refund Calculation Return of Title IV Funds Not Made Withdrawal Incomplete/Incorrect/Untimely Refunds Made Late to Title IV Funds Account Students Not Notified of Refund to Lender Notification and Confirmation of PWD

87. Common R2T4 findings Calculation: �Not completed, or � Not completed in a timely manner � Funds: � Not returned � Returned in the incorrect amount � Not returned in a timely manner

88. Common R2T4 findings Incorrect withdrawal date or date of determination used Not having information about R2T4 and school refund policy in the school�s consumer information Not having a mechanism in place for scenario in which student fails to earn a passing grade in at least one course

89. R2T4 � Compliance Issues Policies and Procedures: Standards of Administrative Capabilities 34 CFR 668.16(b)(3) � communicates all info received by ANY institutional office that bears on a student�s eligibility for Title IV aid to the person designated to be responsible for administering Title IV, HEA programs

90. R2T4 � Compliance Issues Policies and Procedures: Coordination among all campus administrators Integration between Campus Refund policy and R2T4 policy Clear information to students Regular processing Report generation and problem resolution