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

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

3. 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.

4. FSA Withdrawal References
Code of Federal Regulations
34 CFR – 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

5. 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

6. 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

7. 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

8. **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”

9. 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

10. R2T4 Worksheet

11. 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, x 42.9%)
Total TIV Aid to Return = $3,213.59
($5, – $2,414.41)
Sub to Return: $2, (full amount)
Pell to Return: up to $492.59
($3, $2,721.00)

12. 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

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

14. 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, $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, x 50%)
Student Repays $0.00

15. 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!!

16. 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

17. 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

18. 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)

19. 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)

20. 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

21. Aid That Could Have Been Disbursed
Added to Disbursed Aid (for Total Aid) in R2T4 Calculation
Must Meet Conditions For Late Disbursement [34 CFR (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

22. 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

23. 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 )
Student Has Earned 100% of FSA

24. **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

25. 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

26. 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

27. 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

28. 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

29. 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

30. 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

31. 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

32. 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

33. 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
R2T Other FSA Topics
Training Offered Through Professional Associations

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