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Return of Title IV

Return of Title IV. Ann Marie Gruber Assistant Director of Financial Aid Lakeland Community College agruber@lakelandcc.edu. What is R2T4?. Return of Title IV Funds

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Return of Title IV

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  1. Return of Title IV Ann Marie Gruber Assistant Director of Financial Aid Lakeland Community College agruber@lakelandcc.edu

  2. What is R2T4? Return of Title IV Funds Calculation to determine what Title IV aid a recipient has earned upon total withdrawal and what if any aid must be returned and by whom Separate from the institution’s and state’s refund policy Must inform students of all refund policies (including R2T4) as well as the requirements and procedures to begin the withdrawal process from the school

  3. When Does R2T4 Apply? Recipient of Title IV aid ceases enrollment after beginning attendance but before the end of the enrollment period (POE) or payment period (PP) Does not apply to students who reduce their course load (change in enrollment status not a withdrawal) Up through the 60% point of the PP or POE Still must complete calculation if after 60% point to determine if post-withdrawal disbursement is required

  4. Worksheets provided by the Department of Education available at http://www.ifap.ed.gov Completing the Calculation

  5. Web product available through FAA Access to CPS online at http://www.fafsa.ed.gov/FOTWWebApp/faa/faa.jsp Completing the Calculation

  6. After the Calculation…. If amount of aid the student earns is less than what was disbursed, funds must be returned to the programs If amount of aid the student earns is more than what was disbursed, the student is eligible for a post-withdrawal disbursement provided they were eligible for the aid at the time they withdrew

  7. Date Institution Determines Student Withdrew Point in time institution could reasonably be aware that student withdrew Not necessarily same as date of withdrawal but could be Sets the clock for when schools must take action 45 days to offer PWD and/or return their portion of unearned aid

  8. Determining Date of Withdrawal For schools not required to take attendance: date student begins the formal withdrawal process date student provided intent to WD date institution becomes aware student ceased attendance

  9. Determining Date of Withdrawal For schools not required to take attendance… midpoint if student stops attending without notifying anyone (must be determined within 30 days of end of payment period, academic year or student’s educational program, whichever is earlier) beginning date of Leave of Absence (LOA) for a student who does not return from LOA last date of academically related activity (taking exam, completion of paper, etc.); must be able to document attendance

  10. Determining Date of Withdrawal For schools not required to take attendance… date of illness, accident, or events beyond student’s control that prevented them from notifying the school of their withdrawal for student who fails all courses, school must have procedure for determining if student completed and failed all or at least one course or they unofficially withdrew (school then uses midpoint of PP or POE or last date of academically related activity)

  11. Payment Period (PP) or Period of Enrollment (POE)? Standard term based programs (semesters, quarters, trimesters)-use PP Non-standard term-based or non term-based program-school has choice of using either POE or PP, but must use same in all it’s calculations for all student within the program who withdraw

  12. Determining Date of Withdrawal For schools required to take attendance (only schools required to take attendance by an outside entity even if is for a limited time*)… date student begins official withdrawal process the last recorded date of attendance from the institution’s attendance record if school is required to take attendance for a limited time and student withdraws after that date, the school would calculate the WD date same as a school not required to take attendance would *schools required to take attendance on only one date of the term (census date) are not considered to be required to take attendance

  13. Aid is considered disbursed aid if it is disbursed as of the WD date as determined by the institutionFor loans funds, use net amountDo not include inadvertent overpayments (example: funds paid to student who withdrew prior to disbursement) but count as aid that could have been disbursed Do not include Federal Work Study The Calculation…Disbursed Aid

  14. Aid that could have been disbursed but had not yet been disbursed All aid for period if conditions for late disbursement were met before student withdrew -Official EFC from a processed ISIR -Institution certified FFEL or Direct Loan -Federal Perkins or FSEOG-institution made the award to the student The Calculation…Aid That Could Have Been Disbursed

  15. Second or subsequent disbursements of FFEL or Direct Loan funds unless student has graduated or successfully completed program (if regulation applies)Disbursement of FFEL or DL to first-year first-time borrower who withdraws before the 30th day of program (if regulation applies) The Calculation…Aid That Could Have Been Disbursed (but school is prohibited from disbursing)

  16. For clock-hour or credit-hour non term programs, Federal Pell Grant funds for a subsequent payment period that institution is prohibited from making because student did not complete earlier payment periodDisbursements of Federal Pell Grant funds to a student for whom institution has processed ISIR but not a valid EFC (all information on ISIR is correct) by verification deadlines The Calculation…Aid That Could Have Been Disbursed (but school is prohibited from disbursing)

  17. Stafford Loans for which an MPN has not been signed*Federal Perkins Loan for which an MPN has not been signed**Student can sign note between time they withdraw and the calculation is complete (effective 10-27-05 DC 05-16) The Calculation…What Not to Count in Aid Disbursed or That Could Have Been Disbursed

  18. Title IV funds subject to verification (even those where an interim disbursement has been made) and student has not submitted required documents****If student submits verification documents after initial R2T4 calculation but before established verification deadlines, the calculation must be redone The Calculation…What Not to Count in Aid Disbursed or That Could Have Been Disbursed

  19. Calendar days completed (determined by withdrawal date) divided by calendar days in periodExclude institutionally scheduled breaks of 5 or more consecutive days The Calculation…Percentage of Aid Earned

  20. For clock hours schools, scheduled hours are used to determine % completed (new)Students who withdraw after the 60% point earn 100% of their aid (still must do calculation to make sure a post-withdrawal disbursement is not necessary) The Calculation…Percentage of Aid Earned

  21. If aid disbursed = amount earned -no further action neededAmount of aid disbursed > amount earned -unearned portion must be returned to the programsAmount of aid disbursed < amount earned -post-withdrawal disbursement required The Calculation…Aid to be Disbursed or Returned???

  22. Subtract amount of earned aid from amount that was actually disbursed (not including aid that could have been disbursed)School must return the lesser of: amount of Title IV aid student does not earn or amount of institutional charges (tuition, fees, room and board if contracted with the school initially charged to the student even if paid by other sources) that student incurred for the PP or POE multiplied by percentage of funds that was not earned Amount of aid disbursed >amount earned

  23. Unsubsidized FFEL/Direct Stafford Loan Subsidized FFEL/Direct Stafford LoanPerkins LoanFFEL/PLUS (graduate students) Order of Funds to be Returned by the School

  24. FFEL/Direct PLUS (parents) Federal Pell Grant Academic Competitiveness GrantNational SMART Grant FSEOGTEACH Order of Funds to be Returned by the School

  25. School must return funds within 45 days of date institution determined student withdrew Return of Funds by the School

  26. Student must return all unearned funds that the school is not required to return in same order as the schoolSchool could opt to return grant funds for the student and then collect from student or … Student returns their portion Return of Funds by the Student

  27. How student returns their portion…repaying grant overpayment not to exceed half of the total TIV grant funds no need to repay grants if less than $50 student must repay or make satisfactory overpayment arrangements (with school or DOE) within 45 days of being notified of owing overpayment to remain eligible for aid Return of Funds by the Student

  28. How student returns their portion…school is responsible for notifying student they owe overpayment within 45 days of determining student withdrewreturn loan funds in accordance with the terms of the loan Return of Funds by the Student

  29. Post-withdrawal disbursement (PWD) is due… Must meet current conditions for late disbursement School credits student account for allowable incurred costs with PWD funds up to outstanding charges School must get student’s or parent’s signature to credit account for charges other than tuition, fees, room and board (if contracted by the school) Amount of aid disbursed<amount earned

  30. School is required to offer PWD in excess of what was used to pay allowable charges to student no later than 45 days after the date the school determines that the student withdrew (must identify type and amount of aid and indicate student or parent’s right to decline all or part of award) Amount of aid disbursed<amount earned (PWD)

  31. School is required to contact a withdrawn student prior to making PWD of loan funds and explain their obligation to repay the fundsSchool must document outcome of the contact Amount of aid disbursed<amount earned (PWD)

  32. Student or parent given 14 days from date of notification to accept PWD or school can choose not to make PWDPWD must be made no later than 120 days of determination student withdrew Amount of aid disbursed<amount earned (PWD)

  33. Has no relationship to incurred costsNo PWD for a deceased student can be made Amount of aid disbursed<amount earned (PWD)

  34. If student has credit balance at time they withdraw, do not issue refund to student or return funds to program until calculation is completeMay go past the 14 days to issue credit balance, but still compliant if within 45 days to do calculationAfter the calculation is complete, must pay any remaining credit balance per cash management rules (14 days) Credit Balances and R2T4

  35. Questions???

  36. Example: Classes started 8-28-09Student Withdrew 8-31-09 with documented attendance in 12 credit hoursEligible for $2675 in Federal Pell GrantOriginal institutional charges= $1540.05Earned 3.6% (4 days out of 112) of aid=$96.30

  37. Unearned aid (amount to be returned) = $2578.70 ( 96.4% x $2675)Unearned aid for school to return = $1484.60 ($1540.05 x 96.4%)Unearned aid for student to return = $1094.10 ($2578.70– $1484.60)Student not required to return their portion because not more than 50% of original grant amount of $2675 ($1337.50)Pell amount = $1190.40

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