WITHDRAWAL SYMPTOMS: RETURN OF TITLE IV FUNDS NJASFAA Spring Conference March 16, 2017

Contents Basic Principles Calculation Errors Funds Made Late Notifications and Reporting Resources

Withdrawal From All Courses Award Assumption: Student Will Complete the Term (Payment Period) If a student withdraws from all courses within a payment period, a percentage of disbursed Title IV Aid may have to be returned to the Program.

FSA Withdrawal References Code of Federal Regulations 34 CFR 668.22 – Treatment of Title IV Funds When a Student Withdraws Section 484B of the HEA Enacted October 7, 1998, as part of the Higher Education Amendments of 1998 Final Regulation published November 1, 1999 Dear Colleague Letters: GEN-00-24, GEN-04-03, GEN-04-12, GEN-05-16, GEN-11-14 Final Regulations Published November 1, 2002; October 29, 2010

R2T4 Errors Among Top Findings Audits Repeat Finding – Failure to Take Corrective Action NSLDS Roster Reporting – Inaccurate/Untimely Reporting Return to Title IV (R2T4) Calculation Errors Return to Title IV (R2T4) Funds Made Late Verification Violations Program Reviews Crime Awareness Requirements Not Met Student Credit Balance Deficiencies Drug Abuse Prevention Program Requirements Not Met

Basic Principles Student Earns Title IV Through Percentage of Attendance Through Payment Period Return of Title IV Funds (R2T4): Return Disbursed Aid Beyond Earned Amount Post-Withdrawal Disbursement (PWD) May Be Required for Undisbursed (or Partially Disbursed) Aid

Basic Principles (continued) Student That Completes More Than 60% of Payment Period has Earned 100% of Aid Institutional Refund Policy (Tuition and Fees) is Independent of R2T4 Calculation State and Institutional Aid Refund Calculations May Differ from Title IV NJ Aid: HESAA Grants & Sch PPM, Chapter 9, pp 15-19

**Finding** Calculation Errors Institutional Charges Incorrect Actual Clock-Hours Used Instead of Scheduled Hours Incorrect Number of Days Used in Term/Payment Period Incorrect Withdrawal Date Incorrect Aid Used As “Could Have Been Disbursed”

Steps in R2T4 Calculation Student’s TIV Aid Information Percentage of TIV Aid Earned Amount of TIV Aid Earned by Student Total TIV to be Disbursed / Returned Amount of Unearned TIV Due from School Return of Funds by School Initial Amount of Unearned TIV Aid Due from Student Repayment of Student’s Loans Grant Funds to be Returned Return of Grant Funds by Student

R2T4 Worksheet

R2T4 Calculation Example DJT University disbursed $2,907 Pell Grant + $2,721 Direct Subsidized Loan to Eric at the beginning of a 105-day term. He withdrew from all of his classes on Day 45 of the term. Percentage TIV Aid Earned = 42.9% (45/105) Amount of TIV Aid Earned = $2,414.41 ($5,628.00 x 42.9%) Total TIV Aid to Return = $3,213.59 ($5,628.00 – $2,414.41) Sub to Return: $2,721.00 (full amount) Pell to Return: up to $492.59 ($3,213.59 - $2,721.00)

Institutional Charges If Disbursed Aid > Charges, Student May Have to Return a Portion of Unearned Aid Charges to Include Tuition & Mandatory Fees Enrollment Change(s) Before Withdrawal Room & Board Charges to Exclude Discretionary, Educational-Related (Parking etc) Books & Supplies (in most cases) Institutional Refunds Due to Withdrawal

Institutional Charges Example Eric’s Tuition and Fees = $3,700.00 Amount of Unearned Charges=$2,112.70 ($3,700.00 x 57.1%) Recall: Total TIV Aid to Return = $3,213.59 TIV to be Returned by School= $2,112.70 (Lesser of $3,213.59 and $2,112.70) TIV to be Returned by Student: up to $1,100.89 ($3,213.59 - $2,112.70)

Student Return Example Recall: TIV for School to Return= $2,112.70 Decrease Sub by this Amount Recall: TIV for Student to Return: up to $1,100.89 Direct Sub for Student to Return: $608.30 ($2,721.00 - $2,112.70) Student Repays According to Terms of MPN Initial Pell Grant to Return: $492.59 Grant Protection Allowance (50%): $1,453.50 ($2,907.00 x 50%) Student Repays $0.00

Aid Re-Calculations Student Failed to Begin Attendance in One or More Courses in PP or POE Pell Re-Calculation Based on Revised Enrollment Verification Incomplete: Need-Based Aid Excluded from Calculation Completion Within FSA & School Deadlines: Re-Calculation with Additional Aid (Could Have Been Disbursed) No Aid Reallocation After Withdrawal!!

When R2T4 Requirements Do Not Apply Student Does Not Establish Title IV Eligibility (Does Not Begin Any Classes) All FSA Funds Must Be Returned DL Servicer Notified if Funds Disbursed Directly to Student Partial Withdrawal Remains Enrolled in at Least One Course FSA May Require Adjustment/Cancellation Pell Grant: Enrollment on PRD (Census Date) Direct Loans: Enrollment at Time of Disbursement

Days in PP or POE (Earned Aid %) Credit-Hour Calculation Completed Calendar Days in Period Total Calendar Days in Period Exclude Scheduled Breaks of Five Consecutive Days or More Exclude Days in Approved Leave of Absence Clock-Hour Calculation Scheduled Hours to Complete Total Hours in Period

Approved Leave of Absence Formal Written Policy Student Followed the Formal Policy in Requesting LOA Reasonable Expectation: Student Will Return from LOA School Must Approve the Requested LOA in Accordance with its Policy Student May Not Be Charged Additional Institutional Charges Number of Days on an Approved LOA Cannot Exceed 180 Days Within a 12-Month Period Loan Recipients Must Be Told About Effects on their Grace Period if They Do Not Return Student Must Resume Training at the Same Point He Began LOA (Standard or Non-Standard Term Programs)

Withdrawal Date Official: Date Student Notified Institution of Intention to Withdraw “Institution” May Be Department Other than FA Student Notification May Be Written or Verbal Unofficial Schools Required to Take Attendance: LDA Schools Not Required to Take Attendance: Midpoint or Documented Last Date of Academically-Related Activity Circumstances Beyond Student’s Control Can Use Date of Occurrence (If Not Required to Take Attendance)

Date of Determination Schools Required to Take Attendance – No Later Than 14 Days After Student’s LDA Schools Not Required to Take Attendance - Within 30 Days After the End of Earlier of: Payment Period Student’s Educational Program Academic Year If Student Provides Notification Before One of the Above Dates, This Becomes DOD This Date Determines Calculation, Return and PWD Deadlines

Aid That Could Have Been Disbursed Added to Disbursed Aid (for Total Aid) in R2T4 Calculation Must Meet Conditions For Late Disbursement [34 CFR 668.164(g)(2)] Prior to Withdrawal Direct Loans: MPN Signed Before Calculation Might Not Actually Disburse First-Year DL Borrower Didn’t Attend 30 Days Second/Subsequent DL Disbursement

Post-Withdrawal Disbursements Must Calculate Within 30 Days of DOD Disbursement Deadlines Grants: 45 Days from DOD Loans: 180 Days from DOD Loans Notify Student (or Parent) of Eligibility Within 30 Days of DOD Borrower Must Approve Disbursement Within 14 Days (or More) MPN on File; DL Entrance Completed

Rounding Rules Calculate to Four Decimal Places Round to the Third Decimal Place Fourth Decimal is 5 or Higher: Round Up Fourth Decimal is 4 or Lower: Round Down Rounding Exception : PP or POE Percentage Completed is More Than 60% (even 0.6001) Student Has Earned 100% of FSA

**Finding** Funds Made Late Returns Not Made Within 45-Day Allowable Timeframe Inadequate System in Place to Identify/Track Official and Unofficial Withdrawals School’s Policy and Procedures Not Followed No System in Place to Track Number of Days Remaining to Return Funds

Returning Unearned Aid Return Unearned Aid Within 45 Days of Date of Determination “Return” Occurs When the School: Deposits or Transfers the Funds into the School’s Federal Funds Bank Account, and then Awards and Disburses the Funds to Another Eligible Student; or Returns the Funds to ED Electronically Using the “Refund” Function in G5

Identifying/Tracking Withdrawals Official Withdrawal: Date Student Notifies School of Intention to Withdraw Institutional Form: Date Student Signs the Form Unofficial Withdrawal Schools Required to Take Attendance: Within 14 Days of Last Date of Attendance Schools Not Required to Take Attendance: No Passing Grades During Payment Period Combination of: F, U, W, WF, Inc, <blank> Within 30 Days of End of: Term, Program, or Academic Year Last Date of Academically-Related Activity

Academically-Related Activity Physically Attending a Class with Direct Interaction Academic Assignment Submission Taking an Exam, Interactive Tutorial, or a Computer-Based Instruction Attending a School-Assigned Study Group Participating in an Online Discussion that is Academically-Related Interacting Online with Faculty about Subject Matter or to Ask Course-Related Questions

Not Academically-Related Activity Living in Institutionally Provided Housing Participating in the Meal Plan Logging into an Online Course Without Active Participation Attending a Student-Initiated Study Group Participating in Academic Counseling or Advisement

Programs Offered in Modules Course(s) Does Not Span Entire Period Summer Sessions Half-Term Courses in Fall/Winter/Spring Withdrawal When Student Ceases Attendance Before Completing Payment Period and Does Not Provide Written Confirmation of Attendance in Future Module(s) Questions to Ask (1) Did Student Cease Enrollment in Scheduled Course? (2) Was Student Attending Other Course(s) in Module? (3) Did Student Confirm Attendance in a Later Module in Writing? If (1)=Yes, (2)=No and (3)=No, Then R2T4 Applies

Policies and Procedures Follow Your Own Rules Review, Update Current PPM Input from All Follow Other Departments’ Rules Follow Agencies’ Rules State Accrediting Agency ED

Notifications and Reporting Consumer Information Withdrawal Procedures Refund Policy Summary of R2T4 Requirements Notification(s) to Student and/or Parent Adjustment(s) Due to R2T4, PDW Calculation Loan: Exit Interview Report Enrollment Changes, Grant Overpayment Status to NSLDS Report Pell, DL Changes on COD

Other R2T4 Issues Non-Term, Non-Standard Terms Coordination/Cooperation with Campus Departments Registrar Deans / Academic Affairs Bursar / Accounts Receivable In-Person Counseling Title IV Credit Balances: Return Loan(s) LEU,SULA Effects: Cancel “Small” Disbursements

Study/Training Materials FSA Handbook Volume 5 – Withdrawal and the Return of Title IV Funds IFAP – Program Integrity Q’s & A’s Return of Title IV Funds FSA Coach Web Based Training Basic Training – 38 Lessons Intermediate Training NASFAA Compliance Toolkit Compliance Engine AskRegs Database NASFAA U R2T4 + 16 Other FSA Topics Training Offered Through Professional Associations

Douglas Wilson Kean University 908-737-3202 douwilso@kean.edu QUESTIONS? Douglas Wilson Kean University 908-737-3202 douwilso@kean.edu