1. It’s Time to Light the Lights 2016 ILASFAA Annual Conference
Session Title
Return of Title IV Funds Basics
Cheryl Howerton
Millikin University
It’s Time to Light the Lights
2016 ILASFAA Annual Conference
April 6 – 8, 2016, Hilton, Lisle, IL
2016 ILASFAA Annual Conference
April 6 – 8, 2016, Hilton, Lisle, IL

2. What is R2T4?
Return of Title IV Funds (R2T4) - is an acronym used by financial aid professionals
The Return of Title IV funds calculation is completed when a Federal Title IV recipient either:
Officially withdraws;
Unofficially withdraws;
Stops attending per the Institution’s attendance policy
2016 ILASFAA Annual Conference

3. R2T4
Many schools give students 100% of their aid for the entire semester up front.
When a student withdraws, the institution calculates how long the student was in class and the percentage of time for “earned” aid.
That percentage is then applied to the amount of funds awarded, and the difference is then returned to the appropriate program.
2016 ILASFAA Annual Conference

4. Failure to begin attendance
If a student never commences attendance for the program, the student is not an eligible student for Title IV funds for that period, therefore, R2T4 does not apply.
Instead, the provisions of 34 CFR apply:
All Pell, FSEOG, Federal Perkins, Iraq Afghanistan Service Grant, and TEACH funds must be returned
DL funds credited to the student’s account must be returned
The DL loan servicer must be notified when funds were disbursed directly to the student
2016 ILASFAA Annual Conference

5. Withdrawal information – Date of determination
Required to take attendance
When the student begins the official withdrawal process at the school
When student exceeds the institution’s policy on excused absences, not more than one week after the withdrawal date
Not required to take attendance
When the student begins the official withdrawal process at the school
The date the institution becomes aware that the student has ceased attendance
2016 ILASFAA Annual Conference

6. Withdrawal information cont’d
Required to take attendance
The last recorded date of attendance from the institution’s attendance records
Not required to take attendance
Begins the formal withdrawal process
Date student provided intent to withdraw
Midpoint – unofficial withdrawal
The date LOA began for a student who does not return from an LOA
Illness, accident, grievous personal loss, events beyond the student’s control
2016 ILASFAA Annual Conference

7. Calculating R2T4
For a standard term based program - use payment period.
For a non-term based or non-standard term program - use payment period or period of enrollment.
For a non-term or non-standard term based program - an institution must consistently use either a PP or POE for all students (in a category) in a particular program.
2016 ILASFAA Annual Conference

8. R2T4 calculation
When a student ceases attendance before the scheduled end of the program for which s/he received Title IV
The Institution is required to determine the amount of aid that the student earned and unearned portion.
The denominator of the Return Calculation includes the full # of days used to determine the aid award, absent any institutionally scheduled breaks of 5 or more consecutive days or periods of time that the student was on an approved LOA.
2016 ILASFAA Annual Conference

9. How does the calculation work?
Percentage Earned – is equal to:
Calendar days completed
____________________
Calendar days in the period
Note:
Exclude institutionally scheduled breaks of 5 or more consecutive days
When a student has completed more than 60%, 100% of title IV funds are earned.
2016 ILASFAA Annual Conference

10. After calculation If the amount student earned is:
a. The amount disbursed = the amount earned
No action needed
B. The amount disbursed > the amount earned
The unearned portion must be returned to the programs
C. The amount disbursed < then amount earned
Post –withdrawal disbursement
2016 ILASFAA Annual Conference

11. Unearned Funds
Unearned Title IV funds that are the responsibility of the INSTITUTION
Must be returned to the Title IV programs no later than 45 days after the date of determination that the student withdrew.
Unearned Title IV funds that are the responsibility of the STUDENT
If loan funds, they can be repaid under terms of the promissory note
If grants funds, they are subject to a 50% reduction and the student may make satisfactory arrangements to repay.
2016 ILASFAA Annual Conference

12. Aid that could have been disbursed
Policy – All aid for period, if conditions for late disbursement were met before the student withdrew ( (g)(2))
However, if limitations apply, that aid may not be paid to the student ( (g)(4))
2016 ILASFAA Annual Conference

13. Late Disbursement of aid earned
Aid can only be disbursed if the following conditions are met:
All Student Aid (Including Pell) – ED processed SAR/ISIR with official (not necessarily a valid) EFC
Direct Loan – Institution originated the loan
Perkins/FSEOG – Institution made the award
2016 ILASFAA Annual Conference

14. No Passing Grades; Unoffical Withdraw?
School must have a process for determining if student completed:
At least one passing grade
No passing grade – Institution must document completion of period
Grading Policy that differentiated between Failing, Completed; and Failing, Did Not Complete.
Satisfactory Academic Progress may be affected
2016 ILASFAA Annual Conference

15. Questions? Conact Info: Cheryl Howerton chowerton@millikin.edu
Office phone:
2016 ILASFAA Annual Conference