Return of Title IV Funds
A recipient of federal Title IV financial aid who withdraws or is dismissed from school during a period of enrollment in the term in which the student began attendance may be subject to a return of Title IV funds calculation (R2T4). The R2T4 calculation will be based on the student’s last date of attendance (LDA) and the date the school determines that the student has withdrawn from school. For R2T4 purposes, a period of enrollment is the modules attended within the defined term.
The period of time in which Title IV financial aid is earned is the number of calendar days the student has been enrolled, up to the day the student withdrew, divided by the total calendar days in the period of enrollment (excluding scheduled breaks). The percentage is multiplied by the amount of Title IV financial aid for the period of enrollment for which the Title IV financial aid was awarded to determine the amount of Title IV financial aid earned. The amount of Title IV financial aid that has not been earned for the period of enrollment must be returned by the school. The amount of Title IV financial aid earned and the amount of the Title IV financial aid not earned will be calculated based on the amount of Title IV financial aid that was disbursed or could have been disbursed for the period of enrollment upon which the calculation was based. A student will have earned 100% of the Title IV financial aid disbursed for the period of enrollment if the student withdrew after completing more than 60% of the period of enrollment in the term or if a student successfully completed a course in the term. Scheduled breaks of 5 days or more are excluded from the calculation.
In order to NOT be considered withdrawn, the school must obtain a written confirmation at the time of withdrawal from the student stating the student’s intention of return to a future module within the same term. The fact that the student is scheduled to attend the next module will NOT be acceptable.
Once the amount of Title IV financial aid that was not earned has been calculated, federal regulations require that the school return Title IV funds disbursed for the payment period or period of enrollment and used for institutional costs in the following order:
- Direct Loans
- Unsubsidized Federal Direct Loans
- Subsidized Federal Direct Loans
- Federal Direct PLUS loans received on behalf of the student
- Federal Pell Grants
- Federal SEOG
- Other grant or loan assistance authorized by Title IV of the HEA
If the amount of unearned Title IV financial aid disbursed exceeds the amount that is returned by the school, then the student (or parent, if a Federal Parent-PLUS Loan) must return or repay, as appropriate, the remaining grant and loan funds. The student (or parent, if a Federal Parent-PLUS Loan) will be notified of the amount that must be returned or paid back, as appropriate.
The US Department of Education regulations indicate that it is not sufficient for a student to simply log in to an on-line class to demonstrate “academic engagement" and thus trigger either initial attendance and financial aid eligibility or an LDA purposes of R2T4. Online programs must use very specific means to document that a student participated in class or was otherwise engaged in an academically-related activity, such as; submit an assignment, take a quiz, contribute to an on-line discussion.