# Presentation: 659125

## <date/time>

## RETURN OF TITLE IV FUNDS

**RETURN OF TITLE IV FUNDS**
**- back to the basics**

- Session #17

## When is R2T4 applicable?

- When the student begins class & then ceases enrollment prior to the scheduled end of the payment period or period of enrollment
- Otherwise;
- If the student never established eligibility, all the TIV funds must be returned (see 34 CFR 668.21, 682.604(d)(3) or (4), & 685.303(b)(3)).

- Session #17

## What happens when a student withdraws?

- Determine whether the “required to take attendance” or “NOT required to take attendance” rules are applicable.
- Determine withdrawal date.
- Determine amount student earned.
- (Don’t include FWS or the non-Federal share of FSEOG.) (Include amounts that were** or** could have been disbursed.)
_*EITHER *_
- Return unearned funds to Title IV programs, **or**
- Pay student post-withdrawal disbursement.

- Session #17

## Withdrawal date (inst. req’d to take attendance –668.22(b))

- NEW! If an outside entity has a requirement, as determined by the entity, that the institution must take attendance.
- Last date as determined by attendance records.
- Institution must document withdrawal date.
- Applicable to those who cease attendance, **or** do not return from leave of absence.

- Session #17

## Withdrawal date (attendance taking not required 668.22(c))

- Date student began withdrawal process
- Date student otherwise provided official notification
- Mid-point of PP or Period Of Enrollment
- Date institution determines illness, accident grievous personal loss, etc. occurred
- Date of leave of absence, **or**
- Last date at an academically related activity

- Session #17

## 	PP or POE

- For a **standard** **term based program**, MUST use payment period (PP).
- For a **non-term based or non-standard term program**, use
- 	payment period or period of enrollment (POE).
- 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.

- Session #17

## 				% Earned

- For credit hour programs, it** =                    **
_**	**__**calendar days* completed**_**         * except inst. scheduled breaks of          **
**	****calendar days* in the period ****	****    5 consecutive days or more**
- For clock hour programs, it** =              **
_**	**__**clock hours completed     **_
**      ****clock hours in the period     ****	****                **
**	****	****	****(*****OR*** )
_**	**__**clock hours scheduled**_**                **
**     ****clock hours in the period     ***(if  *_*>*_* 70%)*** **
**    ****Note: Excused absences are NOT counted in the 70%  **

- Session #17

## Calculation of amount of aid to be returned

- Multiply the % of the payment period or period of enrollment completed (or 100% once the student completes >60%) **X** the aid that was disbursed or could have been disbursed.  **This is the earned amount.**
- Subtract the earned amount from the aid disbursed as of the date of the institution’s determination that the student withdrew.

- Session #17

## Return of Unearned Aid – Institution

**Institution** returns the **lesser** of --
-    **1.)**  amount disbursed
-        **-** _amount earned _
**                   ****(or)**
**  ****2.)  **institutional charges
-       **x**_ percentage not earned_

- Session #17

## Return of Title IV funds

- Student Responsibility
- Total amount of unearned title IV aid - Amount institution is required to return = Amount for which the student is responsible.
- Student returns his or her share to --
- Title IV loan programs in accordance with the terms of the loan
- Title IV grant programs as an overpayment (only up to 50% of the amount of the overpayment).

- Session #17

## Return of Title IV funds

- Student Responsibility, (cont’d)
**Title IV grant overpayment**
- Student remains title IV elig. thru 45 days, if the student -
- repays the overpayment in full to the institution,
- makes repayment arrangements satisfactory to the institution, or
- signs a repayment agreement w/ the Secretary which will include terms that permit continued elig. while in repayment.

- Session #17

## Return of Title IV funds

**1.) Loans                    2.) Grants (& Other)**
- 	  -Fed. Unsubsidized              -FPell
- 	  -Fed. Subsidized                   -FSEOG
- 	  -FPerkins                         -Other title IV
- 	  -FPlus
- Institution must return the funds ASAP,
- 		- but no later than 30 days after the   		 institution determines withdrawal date.

- Session #17

## Return of funds (con’t)

- Institution must determine the withdrawal date (for a student who does not provide notification) --
- 		-- no later than 30 days after the 		         expiration of the earlier of --
- 			-- PP or POE,
- 			-- the academic year, or
- 			-- the educational program.

- Session #17

## Post-Withdrawal Disbursement

- May credit for institutional charges.
- For loan funds to be credited - notify borrower because borrower can cancel or reduce loan.
- If not credited - offer to student (with written notification) within 30 days of institution’s determination of withdrawal.
- Recipeint has 14 days to accept -** but **- school can choose to make disbursement after that, if there is a late acceptance.

- Session #17

## Post-Withdrawal Disbursement

- The written notification --                                - identifies the title IV funds not credited to account,                                                          - explains the ability of the student to accept or decline, and                                                               - advises about the 14 day deadline for the student to respond. (Then 120 days to disb. – up from 90 days.)
- Electronic or written notification regarding the outcome of a post-withdrawal disbursement request.

- Session #17

## Crediting the student’s account

- Inst. may credit the student’s acct., without permission, to satisfy charges (prior to the WD) for;
- Tuition & fees
- Board - if contracted with the school
- Room - if contracted with the school
- After obtaining authorization - may credit
- current charges for educationally related activities
- minor prior yr.. charges that are either less than $100, or if paid, will not prevent the payment of current educational costs

- Session #17

## Rescinding withdrawal 

- Institution’s choice
- Written notice required of student that          - he is continuing in academic activities,       - and intends to complete the period.
- Negated if student subsequently ceases to attend prior to the end of                                          -- the payment period or                                -- the period of enrollment.

- Session #17

## Approved leave of absence (LOA)

- Nov. 1, 2002 final regulations – the sum of the total number of days in an approved LOA cannot exceed 180 days within a 12-month period
- Inst. must collect the student’s reason for the requested LOA
- Formal policy that the student and institution followed

- Session #17

## 			Leave of absence (con’t)

- Reasonable expectation that the student will be able to return (and the student must return by the end of the leave of absence or the student is treated as a withdrawal),
- No additional institutional charges,** and**
- The student is permitted to complete the  coursework.
- Must tell Title IV loan recipient that failure to return will affect grace period.

- Session #17

## Institutional Charges

- For a non-term program, where the treatment of title IV aid is calculated on a PP basis, **but** the institutional charges are for a period longer than the PP --
-    --the amount of institutional charges incurred for the PP is the **greater** of --
- 	    --the pro rated amount of the charges,** or**
- 	    --the amount of title IV aid retained for 		institutional charges.

- Session #17

## Student’s Overpayment (con’t)

- Student in overpayment **remains eligible**
- 		- (generally) for 45 days **or**
- 		- until he fails to meet terms of 			   repayment agreement.
- 		- beyond the 45days, if he
- 		    - repays in full, **or**
- 	          - enters into repayment agreement**	****	****     **with either the inst or the secretary.

- Session #17

## Consumer Information

- Institution must provide information about the return of title IV funds when a student withdraws per S 668.44 (.43 in new regs).
- Sec 668.43 requires information about --
- 	-- any refund policy with which the 		     	institution is required to comply,
- 	-- requirements for officially withdrawing,
- 	-- summary of requirements of S 668.22.

- Session #17

## 	Definitions

**“****Could have been disbursed”** =
- late disbursement provisions of 668.164(g)
- 	- received SAR/ISIR w/ EFC changed to “the Secretary processed a SAR/ISIR w/ an official EFC” and
- 	- FFEL/DL loan was certified/originated
- 	- FPerkins/FSEOG aid was awarded
**“****Period of enrollment”** = academic period for which charges are assessed, i.e., the program or academic year

- Session #17

## Definitions con’t

**“****Date institution determines withdrawal”**
**(for a student whose rescission of his notification to withdraw is negated by the fact that he subsequently stops attending the institution)** =
- 		-- the date the institution becomes aware that the student did not or will not complete the PP or POE.

- Session #17

## Definitions con’t

**“****Date institution determines withdrawal”**
**( when student does not return from leave of absence)** =
_*the earlier of*_    --the expiration of the leave **or**
**                         **-- the date the student notifies               			  the institution that he will 				  not be returning.

- Session #17

## Definitions con’t

**“****Date institution determines withdrawal”**
**(for a student whose rescission of his notification to withdraw is negated by the fact that he subsequently stops attending the institution)** =
- 		-- the date the institution becomes aware that the student did not or will not complete the PP or POE.

- Session #17

## Sample calculations

- Let’s look at some examples in your handouts.
- Example 1: Credit-hour - Bella Donna
- Example 2: Clock-hour – Wanna Gohome

- Session #17

## QUESTIONS ???

- Questions ????
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- Session #17

## Your presenter	

- Dan Klock, Acting Director
- 	General Provisions FSA
- 	202-377-4026
- 	dan.klock@ed.gov

- Session #17