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R2T4 – Return of Title IV Funds

VASFAA – May 2014Laurie Owens, Director of Financial Aid

AgendaPurposeProcess overviewImportant deadlinesModulesBest practicesCommon audit findingsPerforming hand calculationsQuestions?

Purpose

• Title IV funds are awarded based on the assumption that the student will attend school for the entire period.

• When a student withdraws or stops attending, the student may no longer be eligible for the full amount of Title IV funds originally awarded.

• The amount of Title IV grant and/or loan assistance earned by the student must be determined.

VCCS Impact• 23 colleges• Traditional and various dynamically

dated sessions• # of R2T4s range from 4000-5000

per term for fall and spring; 1000-2000 per summer term

• Modular regulations did not impact volume as expected

Process Overview1. Identify the involved students2. Complete the R2T4 Worksheet

Enrollment/payment periodWithdrawal date or LDATypes of Title IV aid awarded/disbursedInstitutional chargesBreaks of 5 or more consecutive days

3. Return unearned aid or offer post withdrawal disbursement (PWD)

Identifying Students• Report or query in SIS• Last enrollment action is withdrawal as

opposed to completion• 100% of aid earned if attend past 60% date• Return calculation still required to

determine eligibility for PWD • Written confirmation of intent to return• Next course must start within 45 days of

withdrawn course ending date• Custom page for intent to return

Intent to Return

Determining the Withdrawal Date• If required to take attendance...

Last date of academic attendance (LDA) as determined by attendance records

Must demonstrate participation in online courses (not just logging in)

• If not required to take attendance or failure to earn any passing grades...LDA if known or midpoint for enrollment or

payment period• If withdrawn during break...

Last day of classes before break

Types of Title IV Aid• Unsubsidized Direct Loan• Subsidized Direct Loan• Federal Perkins Loan• Direct PLUS Loan• Federal Pell Grant • FSEOG• TEACH Grant • Iraq and Afghanistan Service Grant* Separate calc for VSFAP & GEARUP

Important DeadlinesRequirement DeadlineDate of determination(unofficial withdrawal)

Within 14 days if take attendanceWithin 30 days of end of period if not

Perform R2T4 calculation Within 30 days of determination

Return of unearned funds already disbursed for allowable charges

ASAP but no later than 45 daysafter withdrawal determination

Request for acceptance of PWD for loan funds from student or parent

Within 30 days of withdrawal determination (school supplies deadline for response: i.e.,14 days)

PWD to student’s account for outstanding allowable charges

ASAP but no later than 180 days after withdrawal determination

PWD to student’s account in excess of charges

Loans: ASAP but no later than 180 days after withdrawal determinationGrants: ASAP but no later than 45 days after withdrawal determination

Important DeadlinesRequirement DeadlineNotification to student of grant overpayment

Within 30 days of withdrawal determination

Return of grant funds by student Within 45 days of notification

Referral of student to Debt Resolution Services

Not specified but ASAP

Reporting student to NSLDS No later than 45 days after notification sent to student

Loan repayment In accordance with MPN

Modules• Completion of at least one class

previously exempted students from R2T4• Regulation changed effective 7/1/11• Students now subject to R2T4 if cease

attendance at any point prior to completing the enrollment/payment period

• Program is offered in modules if all courses do not span entire length of the enrollment/payment period

• Summer impact

The 3 Questions1. After beginning attendance in the payment period or period of

enrollment, did the student cease to attend or fail to begin attendance in a course he or she was scheduled to attend?

If no, student is not a withdrawal.

If yes, go to question 2.  

2. When ceased to attend or failed to begin attendance in a scheduled course, was the student still attending other courses?

If yes, student is not a withdrawal.

If no, go to question 3.

3. Did the student confirm attendance in a later module in the enrollment period (starting within 45 days)?

If yes, student is not a withdrawal as long as they return.

If no, student is a withdrawal and R2T4 may apply.  

Modules

• Seek intent to return to later course starting within 45 days before processing R2T4

• Must recalculate aid for dropped or never attended courses prior to R2T4

• R2T4 required if last enrollment action is withdrawal not completion

• Timing is key and results in inequities• Problem ED was attempting to resolve can

still occur

Example 1Enrollment Period LDA

Class 1 08/22/13 - 12/19/13 09/28/13Class 2 08/22/13 - 12/19/13 09/28/13Class 3 08/22/13 - 12/19/13 09/28/13Class 4 08/22/13 - 10/18/13 10/18/13

R2T4 Not Required: Student still attending modular course when withdrawn from traditional courses. Modular course subsequently completed. Last enrollment action is completion on 10/18/13.

Example 2Enrollment Period LDA

Class 1 08/22/13 - 12/19/13 10/20/13Class 2 08/22/13 - 12/19/13 10/20/13Class 3 08/22/13 - 12/19/13 10/20/13Class 4 08/22/13 - 10/18/13 10/18/13

R2T4 Required: Student not attending other courses when withdrawn from traditional courses. Last enrollment action is withdrawal on 10/20/13. This student attends more days than the student in Example 1 and owes funds back simply due to timing of withdrawal.

Common Audit Findings• #3 on ED’s Top 10 Program Review

Findings list• #2 and #3 on ED’s Top 10 Audit

Findings list• Findings on both lists

R2T4 Returns Made LateR2T4 Calculation Errors

Common Audit Findings• Problem: Returns not made within 45-day

allowable timeframe- School’s policy and procedures not

followed- Inadequate system in place to

identify/track official and unofficial withdrawals

- No system in place to track number of days remaining to return funds

Common Audit Findings• Solution: Returns not made within 45-day

allowable timeframeReview and revise policies and procedures to

ensure funds are returned no later than 45 days after date of determination

Develop R2T4 monitoring/reporting systemProvide staff trainingPeriodically review processes, policies, and

procedures to ensure complianceEnsure timely communication between offices

and/or systemsFSA Assessments

Common Audit Findings• Problem: R2T4 Calculation Errors

Incorrect number of days used in term/payment period

Actual clock-hours used instead of scheduled hours

Incorrect aid used as “could have been disbursed”

Incorrect withdrawal dateMathematical and/or rounding errors

Common Audit Findings• Solution: R2T4 Calculation Errors

Work with academic offices to confirm when classes meet, including weekends

Exclude all class breaks of five consecutive days or more

Determine number of clock-hours student is scheduled to attend each day

Multiply the number of clock-hours scheduled each day by the number of scheduled days elapsed in the payment period or period of enrollment

Implement plan for peer review of each calculation Conduct monthly self-assessment by reviewing

random sample of student files

Things to Consider• Establishing the correct 60% date• Impact of unscheduled breaks resulting

from inclement weather closings• Breaks between modules• Pell Recalculations

All term long Census locking

• Permissibility of less than half-time status after loan disbursement

Best PracticesProvide thorough R2T4 information on the on

College’s websiteProvide thorough R2T4 information with your

award notificationsPost notices around campus (particularly in

withdrawal locations) warning students about withdrawal implications

Educate Counseling and Student Records staff regarding withdrawal implications

Summarize withdrawal implications in your SAP policy literature

Consider having FAO sign off on withdrawals so students can be informed of impact

Best Practices - FacultyEnsure there is a policy in place for students who

never attend to be dropped or coded as suchEnsure there is a policy in place for students who

stop attending to be withdrawn or coded as suchEnsure the last date of attendance is captured if

required to take attendanceEnsure faculty do not award ‘W’ or ‘F’ grades to

students who never attendEnsure there is a policy in place to determine if

failing grades are actually unofficial withdrawalsCommunicate the necessity for accurate and

timely reporting by faculty

Hand CalculationsPrograms measured in credit-hours:

# of days in attendance = % of Title IV Earned# of days in the period

Programs measured in clock-hours:

# of scheduled clock-hours = % of Title IV Earned# of clock-hours in the period

Rounding• Percentages

Calculated to four decimal placesRounded to three decimal places 52/116 = .4482 to .448 to 44.8% Exception: .6001 through .6004 which are not

rounded for determining if past 60% point• Dollars and cents

Rounded to nearest penny: $977.207 to $977.21Repayment amounts can be rounded to the

nearest dollar: $637.48 to $637

Hand Calculations• See handouts

1. 2014 Calendar2. Calculating the Length of the Period3. R2T4 Worksheet

• Traditional 16 week term measured in credit hours

• Feel free to use cell phone calculators

Hand CalculationsStart Date End Date Withdrawal

DatePell Disbursed

Loans Disbursed (net)

College Charges

1-13-2014 5-13-2014 2-27-2014 $1411 Sub: $990 $1075

ResultsReturn of funds by the school?

Box O: $637.48 (rounded down to $637) To which Title IV program?

SubsidizedReturn of grant funds by the student?

$0Repayment of the student’s loans?

$352.52 via terms of MPN $353 due to rounding

Questions