1. TASFAA New Aid Officers Workshop Kevin Campbell Training Officer United States Department of Education 1

2. 2 Return of Title IV Funds What Happens When a Title IV Recipient Withdraws?

3. 3 Return of Title IV Funds Applies only to Title IV eligible students who begin attendance and then completely withdraw, or otherwise cease attending If student enrolled but never attended any classes –Student did not establish eligibility for any funds –All Title IV aid disbursed must be returned to the programs

4. 4 Theory Behind the Calculation Student earns Title IV aid through attendance –Percentage of aid earned is equal to the percentage of payment period or enrollment period completed

5. 5 How does it work? If school has disbursed more aid than the student has earned, money is returned to the programs If school has disbursed less aid than the student has earned, a post-withdrawal disbursement will be calculated

6. R2T4 – Many Forks in the Road Required to take attendance vs not required Payment period vs period of enrollment Withdrawal date vs determination date 6

7. R2T4 – Many Forks in the Road Aid disbursed vs aid that could have been disbursed Amounts included in calculation vs amounts that can actually be disbursed Return vs post-withdrawal disbursement School part of return vs student part 7

8. R2T4 – Two Important Dates Withdrawal Date –Last day of student’s eligibility for Title IV Determination Date –Starts timeline for return of $ to ED –Starts timeline for PWD –Starts timeline for notifications to student Might fall on the same date but often does not 8

9. Date of Institution’s Determination that Student Withdrew When did the school know of the student’s withdrawal? If unofficial withdrawal, determine withdrawal date no later than 30 days after the end of the earlier of the –Payment period or period of enrollment –Academic year –Educational program Schools required to take attendance should have a DOD no later than 14 calendar days after student’s last date of attendance 9

10. 10 Payment Period or Period of Enrollment Standard term-based program must use term/payment period Nonstandard term or nonterm program may choose either payment period or period of enrollment –May choose on a program-by-program basis –Must be consistent with application of method used

11. 11 Rounding Rules for Dollar Amounts Round to the nearest penny –$2,346.00 x 44.6% = $1,046.316 or $1,046.32 –$2,346.00 x 44.4% = $1,041.624 or $1,041.62 Disbursement or refund may be rounded to the nearest dollar –$1,046.32 = $1,046 –$1,041.62 = $1,042

12. Rounding Rules for Percentages Calculate out to 4 decimal places 45 days / 101 days =.4455 199 hours / 450 hours =.4422 Round to third decimal place.4455 =.446 = 44.6%.4422 =.442 = 44.2% 12

13. Our Student - Maria Fill out top of R2T4 worksheet We determined Maria withdrew yesterday Our school calculates R2T4 on a payment period basis –In this case, Spring Semester 13

14. Maria – R2T4 Worksheet Step 1 Enter student’s Title IV aid as either disbursed or could have been disbursed Note that loans are separate from grants A = Grant $ disbursed B = Loan $ disbursed C = Grant $ TCHBD D = Loan $ TCHBD 14

15. Maria’s Spring Financial Aid Package 15 PROGRAMAMOUNT Federal Pell Grant2000 Federal Work Study1000 State Grant500 Direct Loan Sub Stafford1741 (net amount) Direct Loan Unsub Stafford995 (net amount) Private student loan2000 School Scholarship3000

16. 16 Aid That Could Have Been Disbursed Student met conditions for a late disbursement (668.164(g)(2)) – At time student withdrew, ED had processed a SAR or ISIR with official EFC –Pell/ACG/National SMART – ISIR with eligible EFC –FFEL – loan had been certified –DL – loan had been originated –TEACH – grant had been originated –Perkins/FSEOG – funds had been awarded

17. 17 FFEL/DL Second/Subsequent Disbursements Include as aid that could have been disbursed if student met the “conditions for a late disbursement” Cannot be included in any post- withdrawal disbursement [668.164(g)(4)(ii)]

18. $ Included in Calculation vs $ That Can Be Disbursed Counter intuitive to include funds in calculation that you will not disburse to student However, one set of regs govern the calc Another set of regs govern what can be disbursed –More restrictive 18

19. Maria – R2T4 Worksheet Step 2 Find out how much of the payment period Maria completed 19

20. STEP 2: Withdrawal Date – School Not Required to Take Attendance Use the earlier of –date student began school’s withdrawal process or date student otherwise provided “official” notice; or –midpoint in period (if student didn’t notify school); or –If student didn’t notify due to circumstances beyond student’s control, the date related to that circumstance 20

21. 21 STEP 2: Withdrawal Date – School Not Required to Take Attendance School not required to take attendance always has the option of using the date of student’s last attendance at an academically related activity as documented by the school

22. 22 STEP 2: Withdrawal Date – School Required to Take Attendance IF… school is required to take attendance by outside entity (such as state or accrediting agency) OR…starting on July 1, 2011, the school, itself, requires attendance be taken THEN... withdrawal date is taken from attendance records NOTE: Requirement might apply only to specific groups of students

23. 23 Calendar Days at Credit-Hour Schools Count every day, including weekends and holidays, except: Scheduled break of five or more consecutive days when no classes are offered Days of leave of absence are not included in total days

24. 24 Calendar Days at Credit-Hour Schools SUNMONTUEWEDTHUFRISAT ClosedClass Thanks giving Day Closed Class Closed

25. 25 Calendar Days at Credit-Hour Schools SUNMONTUEWEDTHUFRISAT ClosedClass ClosedThanks giving Day Closed Class Closed

26. 26 Calendar Days at Credit-Hour Schools SUNMONTUEWEDTHUFRISAT ClosedClass Closed SpringBreakSpringBreakSpring Break Closed Class Closed

27. Maria – R2T4 Worksheet Step 2 Maria started on the first day of Spring Semester, February 1, 2010 The last day of Spring Semester is May 11, 2010 Maria “unofficially” withdrew Our school is not required to take attendance 27

28. Maria – R2T4 Worksheet Step 3 What % of her aid would Maria have earned had she NOT withdrawn? What % did Maria, in fact, earn SINCE she withdrew? % completed x Total Title IV aid disbursed and TCHBD = T4 Earned by student 28

29. Maria – R2T4 Worksheet Step 4 Does Maria have a return or a PWD? If a return, continue with R2T4 calc –Step 4 Box K If a PWD, go to PWD Tracking Sheet 29

30. Maria – R2T4 Worksheet Step 4 Step 4 is calculating the Total Return –School part –Student part 30

31. Maria – R2T4 Worksheet Step 5 What is the school’s part of the Total Return? 31

32. Maria – R2T4 Worksheet Step 5 The institutional charges at Maria’s school are $3000 tuition/fees –Calculated before any withdrawal related reduction in institutional costs Determine % of unearned Title IV aid Institutional costs x % of unearned T4 = amount of unearned charges Compare Total Title IV to Return to amount of unearned charges Lesser amount is School part of return 32

33. 33 Step 6: Return of Funds by School Law specifies order of Title IV programs to which funds must be returned –See worksheet Never return more money than was received from a Title IV program

34. 34 Step 6: Return of Funds by School Return funds to program(s) as soon as possible, but no later than 45 calendar days after the date of determination of withdrawal –Calculation must be completed within 30 calendar days of the date of determination of withdrawal

35. Maria – R2T4 Worksheet Step 6 What are the amounts that the school will return to each T4 program for Maria? Why does the school have to return these funds for Maria? 35

36. 36 Step 7: Return of Funds by Student Total T4 to return – what school has returned = initial amount of student part Initial amount may change because the student gets different, and more favorable, treatment in the calc in later steps

37. Maria – R2T4 Worksheet Step 7 What is Maria’s part of the return (initial amount) Total T4 to return – what school has returned = initial amount of student part 37

38. 38 Step 8: Repayment of Student’s Loans Student is responsible to repay any loan funds not returned by the school Loans are repaid in accordance with terms of the promissory note

39. Maria – R2T4 Worksheet Step 8 What is the amount of Maria’s loans that make up the initial amount of her return? What does “according to the terms of the promissory note” mean Is this different from the standard the school was held to? 39

40. Maria – R2T4 Worksheet Step 9 & 10 Maria has no grant funds to return This will occur for many students who have no grants or a combination of loan and grants 40

41. Randall – R2T4 Worksheet Step 9 & 10 Randall received no loans Randall received $2780 in T4 grants After the school returned its portion, Randall had an initial amount of $900 to return 41

42. Randall – Calculating Grant Overpayment – Step 9 42 $900.00$0.00900.00 $2780.00 $1,390.00 $900.00$1390.00

43. Randall – R2T4 Worksheet Step 9 & 10 Does Randall have any grant funds to return? Is this standard different from the standard the school was held to? 43

44. 44 Step 10: Return of Funds by Student Any grant repayment due from student is considered an overpayment Student is responsible for repayment –Amounts of $50 or less in any program are set aside Law specifies order of Title IV programs to which funds must be returned –See worksheet

45. Step 10 45

46. 46 Grant Overpayment School must notify student within 30 days of school’s determination of withdrawal Student retains Title IV eligibility for 45 days –During that time, he must either: Repay in full to school Make satisfactory arrangements to repay with school (school’s option) Make satisfactory arrangements to repay with Department of Education

47. 47 Referring Overpayment to the Department If student does not repay in full or make payment arrangements with school within 45 days, school must refer overpayment to Department for collection Referral form in Participant Guide –Further explanation in FSA Handbook, Volume 5

48. 48 Report Overpayment to NSLDS Overpayments not paid in full within 45 days of the institution’s determination of the withdrawal must be reported to NSLDS –Reported via online process

49. 49 Post-Withdrawal Disbursements (PWD) When Title IV aid disbursed is less than Title IV aid earned Sample worksheet in FSA Handbook and in Participant Guide Box J on R2T4 Worksheet

50. 50 Notification of PWD School must provide written notification within 30 days of date of determination of withdrawal –Must identify type and amount of funds –Must explain option to accept or decline some or all of funds –Must explain obligation to repay any loan funds disbursed –Must provide a deadline for response

51. 51 Post-Withdrawal Disbursement of Grant Funds No student confirmation required Disbursed directly to student - as soon as possible, but no later than 45 calendar days after date of determination Disbursed as credit to account – within 180 days after date of determination

52. 52 Post-Withdrawal Disbursement of Loan Funds Must receive confirmation from the student or parent borrower prior to disbursement Must be made as soon as possible, but no later than 180 days after date of determination

53. 53 Applying PWD to Institutional Charges Grant funds may be applied directly to those charges without student’s authorization Loan funds may only be applied after confirmation is received from the student/parent borrower –Written notification procedures are same as for direct disbursement

54. 54 Additional Resources FSA Handbook, Vol. 5, Ch. 2 inc. case studies Dear Colleague Letter GEN-00-24 (December 2000) Dear Colleague Letter GEN-04-03 (November 2004) R2T4 Demo Site available at –http://fafsademo.test.ed.govhttp://fafsademo.test.ed.gov R2T4 website available through FAA Access to CPS Online –http://www.faaaccess.ed.gov/http://www.faaaccess.ed.gov/

55. 55 Supervisor of Training Officers Requests Feedback from FAAs Jo Ann Borel Supervisor of Training Officers United States Department of Education- Federal Student Aid Phone: 202-377-3930 joann.borel@ed.gov

56. 56 Thank You! Kevin Campbell Training Officer United States Department of Education Federal Student Aid Phone: 214-661-9488 Email: kevin.campbell@ed.gov