1. Avoiding Pitfalls in the Return of Title IV John Gritts - MSURSD

2. Basic Principles Title IV funds are awarded to a student with the assumption that the student will attend school for the entire period for which the assistance is awarded How much will the school earn? When a student ceases attendance prior to the planned ending date, the student may not be eligible for the full amount of Title IV funds the student was scheduled to receive How much did the student earn? 2

3. Basic Principles Student earns Title IV aid equal to the amount of attendance Percentage of aid earned equal to percentage of payment period or period of enrollment completed School has disbursed more aid than student earned, Title IV aid must be returned to the programs School has disbursed less Title IV aid than student earned, a post-withdrawal disbursement (PWD) calculated and offered 3

4. Basic Principles Student completes more than 60% of the PP or POE, student earned 100% scheduled Title IV funds Institutional or other refund policies do not impact amount of Title IV aid earned R2T4 calculation School use best information available to determine withdrawal date (document) 4

5. Applicability Student never in attendance student is not an eligible student for Title IV funds o All Pell, FSEOG, and Iraq Afghanistan Service Grant funds must be returned o DL funds credited to the student’s account must be returned o The DL loan servicer must be notified when funds were disbursed directly to the student No R2T4 Required 5

6. Consumer Information Refund policy the school must comply for the return of unearned funds State / Accreditor School’s refund policy Requirements for treatment of Title IV funds after withdrawal Institution’s procedures to officially withdraw 6

7. Two Types of Institutions Required to Take Attendance NOT Required to Take Attendance 7

8. Institution Required to Take Attendance “Institution Required to Take Attendance” if - o Outside entity requires attendance taken o or institution requires take class attendance Must use official attendance records determine withdrawal date (WD) 8

9. NOT Required To Take Attendance 9 Not required to take attendance by an outside entity Most institutions fit into this category

10. Withdrawal Date Date the institution uses to determines Earned and Unearned Title IV Funds for R2T4 Institution Required to Take Attendance o Last date of Attendance is based on attendance records school required to maintain o School must have a process to determine when a student is no longer attending o See GEN-04-12 10

11. Withdrawal Date School NOT Required to Take Attendance the Withdrawal Date Is: o Date student began formal withdrawal process or provided official notification o When school determines student no longer attending o If because of illness, accident, etc. o Last date of an academically-related activity 11

12. Academic Attendance “Academic attendance” and “attendance at an academically-related activity” include, but are not limited to: o Physically attending a class with direct interaction o Academic assignment submission o Taking an exam, interactive tutorial, or a computer-based instruction 12

13. Academic Attendance – cont’d 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 13

14. Academic Attendance An academically-related activity DOES NOT include: o Living in institutionally provided housing or participating in the meal plan o Logging into an online course without active participation o Participating in academic counseling or advisement 14

15. School not required to take attendance MAY ALWAYS use last date of academically-related activity as withdrawal date The school, not the student, must DOCUMENT o Activity is academically-related, and o Student’s attendance at activity Academically-Related Activity 15

16. Date of Determination For an Institution Required to Take Attendance The date the student provides notification that he or she is ceasing enrollment The last date of attendance (LDA) The institution must have a process in place that will determine when a student’s absence is a withdrawal. o See GEN-04-12, 11/17/04 16

17. Date of Determination For an Institution NOT Required to Take Attendance o The date the student provides notification o The date the institution becomes aware that the student ceased attendance o A determination must be made at the end of the earlier of 1) The payment period or the period of enrollment, 2) The academic year, or 3) The student’s educational program 17

18. Date of Determination-Deadlines Within 30 days, the institution must: o Perform the R2T4 calculation o Notify the student of any grant overpayment o Notify the student of eligibility for a post-withdrawal disbursement (PWD) Institution must return the Title IV funds it has responsibility to return within 45 days Institution must make the PWD to the student and/or parent (in the case of a PLUS loan) within 180 days 18

19. The Institution Must Determine date of student’s withdrawal Calculate percent of period completed Determine amount earned by applying percent completed to total of amounts disbursed and amounts that could have been disbursed Return unearned funds to Title IV programs, or pay student post-withdrawal disbursement Determine Title IV overpayment, if any 19

20. Aid that Could Have Been Disbursed In addition to the Title IV aid that was disbursed, include aid that could have been disbursed if – o Conditions for late disbursements in 34 CFR 668.164(g)(2) were met prior to the withdrawal date  ED processed the ISIR/SAR with an official EFC  FSEOG – school made the award  Direct Loan – school originated loan 20

21. The Return to Title IV Funds Rule An institution is required to determine the earned and unearned portion of Title IV aid when a student ceases enrollment prior to the planned completion date of the payment period or period of enrollment o NOTE: Up through 60% of the Payment Period (PP) or Period of Enrollment (POE) an otherwise eligible student earns Title IV aid on a pro rata basis. After the 60% point - student has earned 100% of TIV aid o ALSO: The return calculation is still required even if the student has earned 100%, to determine whether a post- withdrawal disbursement is required 21

22. When to Perform a Return Calculation A Return of Title IV Funds calculation must be performed when any student who received, or was eligible to receive, Title IV aid ceases attendance in all classes A return calculation is not required if the student: o Never began attendance at the school. o Continues to attend at least one Title IV-eligible class. o Is on a leave of absence o Did not receive, and is not eligible to receive Title IV o Received, or eligible to only receive, FWS 22

23. Possible outcomes when R2T4 calculated Amount of Title IV funds exceeded amount earned and funds must be returned Amount of Title IV funds less than amount earned and a post-withdrawal disbursement must be made Amount of Title IV funds equals amount earn ed 23

24. Post-withdrawal disbursement (PWD) If amount of the Earned Title IV funds exceeds amount disbursed, the difference is due the student as a “Post-Withdrawal Disbursement” (PWD) Must meet the late disbursement requirements The PWD must be made from grant funds before loan funds 24

25. Post-withdrawal disbursement (PWD) A PWD comprised of grant funds may be used to pay the following current charges: o For tuition o For fees o For room and board, if contracted with the institution 25

26. PWD – Grant Funds No student confirmation required to pay current outstanding charges for tuition, fees, room, and board listed on previous slide or for prior year charges up to $200 Written confirmation is required for all other current charges If disbursed directly to the student, must be disbursed as soon as possible, but within 45 days of the Date of Determination 26

27. PWD – Loan Funds If Title IV loan funds are part of the PWD then o It must be made within 180 days of the Date of Determination o It cannot be a second or subsequent disbursement of a Direct Loan (DL) o School cannot make a late disbursement of a DL if the student was a first year, first-time borrower unless the student completed the first 30 days of the program or the school was not under that restriction 27

28. PWD – Loan Funds – Cont’d Must offer the student (or parent in the case of a PLUS) the PWD within 30 days of the Date of Determination and request confirmation that the PWD is accepted Must obtain authorization to pay for other than current charges 28

29. PWD Loan Funds - Notifications Required notifications ─ Within 30 days of the Date of Determination, the school must notify the student (and parent in the case of a PLUS loan) o Explain that the borrower may decline all or a portion of the loan disbursement o Request confirmation of any amount to be credited to the student’s account or directly disbursed to the borrower o Explain the obligation to repay the loan 29

30. PWD Loan Funds N otifications Cont’d Required notifications o Specify a deadline of at least 14 days for required response/confirmation o If the response is late, the school may decide to not disburse o If the school decides to not disburse, must notify the borrower in writing o If no response from the borrower, no disbursement of the PWD – loan amount 30

31. Unearned Funds - School’s Responsibility Institution MUST return funds within 45 days of the date of determination Title IV funds – are returned to the program accounts 31

32. Unearned Funds - Student’s Responsibility Unearned Title IV funds that are the responsibility of the STUDENT o If loan funds, they can be repaid under terms of the promissory note o If grant funds, they are subject to a 50% reduction and the student may make satisfactory arrangements to repay 32

33. Hold all Title IV credit balances until R2T4 calculated Credit balance is “Aid/Amount Disbursed” in the calculation Determine if credit balance changes because of a State, accreditor, or institutional refund policy After the R2T4 calculation - use any remaining credit balance to first repay a grant on behalf of student Release credit balance within 14 days R2T4 and Title IV Credit Balances 33

34. 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 differentiates between Failing, Completed; and Failing, Did Not Complete No Passing Grades 34

35. Additional Resources

36. Resources – www.ifap.ed.gov 36 My IFAP What’s New Tools for Schools Publications Hot Topics Handbooks Letters & Announcements Regulations Default Prevention Training and Conferences

37. FSA Assessments 37

38. FSA Assessments Self-assessment tool designed to assist schools in evaluating their financial aid policies, processes, and procedures Includes assessment modules regarding Students, Schools, and Campus-Based Programs http://ifap.ed.gov/qahome/fsaassessment.html 38

39. R2T4 on the Web (R2T4 OTW) 39

40. Sign up for R2T4 OTW Signup via SAIG Enrollment website ‒ https://fsawebenroll.ed.gov/PMEnroll/index.jsp https://fsawebenroll.ed.gov/PMEnroll/index.jsp The R2T4 Web Application will be available via FAA Access ‒ https://faaaccess.ed.gov/FOTWWebApp/faa/faa.js p https://faaaccess.ed.gov/FOTWWebApp/faa/faa.js p Set up a simple school profile one or two popular programs and academic calendar; do not try to build costs for each program Track post-withdrawal disbursement notification ED’s Free R2T4 Software on the W eb 40

41. R2T4 Software Suggestions Software located on SFAdownload.ed.gov o aStand-alone software o aListed in Archives - July 11, 2000 Quick Reference Guide On-line Help 41

42. R2T4 Software Suggestions Import demographic information from external systems 45-day limit alarm 14-day PWD/Cash Management alarm More On-Line Help 42

43. R2T4 Software Suggestions Add a check box on PWD Tab for initial or subsequent disbursement indicator Note - if the student’s original Title IV grant overpayment is less than $25, a message box indicates “De Minimis Amount” Transmit R2T4 information to NSLDS and ED Collection Services LOA date tracking Report writer to generate notices/letters 43

44. Other Resources Section 484B of the HEA ‒ Enacted October 7, 1998, as part of the Higher Education Amendments of 1998 Final Reg. published November 1, 1999 Dear Colleague Letter GEN-00-24 Final Reg. published November 1, 2002 Dear Colleague Letter GEN-04-03 Dear Colleague Letter GEN-04-12 44

45. Other Resources (cont’d) Dear Colleague Letter GEN-05-16 Final Regulation published October 29,2010 Dear Colleague Letter GEN-11-14 IFAP – Program Integrity Q’s & A’s – Return of Title IV Funds o General Questions Programs Offered in Modules Institutions Required to Take Attendance 45

46. QUESTIONS? 46