Winter Edition 2016 > Financial Policies and Information > Return of Title IV Funds Policy

Return of Title IV Funds Policy

Return of Federal Title IV Financial Aid

A federal financial aid (Title IV) recipient who withdraws from the University is subject to a Return of Title IV (R2T4) calculation.  For the purpose of R2T4 calculation requirements, a recipient is a student who has actually received federal financial aid funds or has met the conditions that entitled the student to a late disbursement of federal financial aid funds.  The University is required to review the amount of federal loan and grant aid a student received for the payment period, to determine what percentage of federal financial aid the student earned prior to withdrawal.  The percentage of federal financial aid determined to be unearned for the payment period must be returned to the appropriate federal financial aid program(s).

Policy

When a federal financial aid recipient withdraws from the University prior to the end of a payment period, an R2T4 calculation must be performed to determine the amount of federal financial aid funds earned as of the date of withdrawal.  If the total amount of federal financial aid funds earned is less than the amount of federal financial aid funds disbursed to the student, or on behalf of the student in the case of a parent PLUS Loan, the difference between these amounts is returned to the applicable federal financial aid programs.  If federal financial aid funds earned is greater than federal financial aid funds disbursed, the difference between these amounts is treated as a post withdrawal disbursement.  An R2T4 calculation is not performed if the federal financial aid recipient withdraws after successfully completing the entire payment period and all funds awarded for that period have been disbursed.  Note that the payment period for all on-ground undergraduate programs is the twenty-week semester; the payment period for Pharm D and all fully-online programs is the sixteen-week trimester; the payment period for all other on-ground, graduate programs is the fifteen-week trimester.

Return Calculation

The amount of federal financial aid earned is calculated by determining the percentage of aid earned and applying this percentage to the total amount of aid disbursed and that could have been disbursed for the payment period.  For purposes of determining earned federal financial aid, a student’s aid is considered disbursed if it is disbursed as of the student’s last documented date of attendance.  As long as conditions for a late disbursement (described below) are met prior to the date the student became ineligible (the student’s last date of attendance), any undisbursed federal financial aid will be counted as aid that could have been disbursed.

Conditions for a Late Disbursement (Including Post Withdrawal Disbursements)

• The Department of Education (ED) processed a Student Aid Report (SAR) or Institutional Student Information Record (ISIR) with an official Expected Family Contribution (EFC) for the student (except in the case of a parent PLUS Loan)
• The University originated a Direct Loan (DL)
• The University made the award to the student for a Federal Supplemental Educational Opportunity Grant (FSEOG)

The University does not include as a post-withdrawal disbursement any funds the University was prohibited from disbursing on or before the date the student withdrew, which would apply to the following:

• Second or subsequent disbursements of DL funds unless the student has graduated or successfully completed the loan period.  
• Disbursements of Federal Pell Grant and Iraq Afghanistan Service Grant funds to a student for whom the University did not receive a valid SAR or a valid ISIR by the deadline date established by the Department of Education.  
• Federal Pell Grant and Iraq Afghanistan Service Grant funds for a subsequent payment period when the student has not successfully completed the earlier payment period for which the student has already been paid.

Inadvertent Overpayments

An inadvertent overpayment occurs when the University disburses funds to a student no longer in attendance but prior to the date the University determines the student withdrew from the program.  This would include any federal financial aid fund disbursements made after the student’s last date of attendance but prior to the University’s determination that the student was withdrawn.  These inadvertent overpayments are included in the R2T4 calculation as aid that could have been disbursed.  Only students who meet late disbursement criteria are entitled to keep federal financial aid funds disbursed as an inadvertent overpayment.  If an inadvertent overpayment cannot be made as a late disbursement, the University returns the entire amount of the federal financial aid funds disbursed.  If the inadvertent overpayment can be made as a late disbursement, the University returns only the unearned portion of the inadvertent overpayment within 45 days of the University’s date of determination that the student withdrew.  Unearned inadvertent overpayments are returned according to the requirements for the return of unearned funds.

Verification and the Return Calculation

If a student provides required verification documents after withdrawing from the University, but within 30 days of the date of the notification informing the student of the requirements, and in time for the University to meet the 30-day Return deadline, the University performs the R2T4 calculation based on all federal financial aid the student had established eligibility for prior to the withdrawal.  For the Federal Pell Grant Program, if the student provides the verification documents after the 30-day deadline but before the earlier of 120 days after the student’s last date of attendance or the deadline established by ED each award year, the University reviews and addresses eligibility as required.  If a student does not provide all verification documents in time for the University to complete verification and meet the R2T4 deadlines, the University includes in the R2T4 calculation only the federal financial aid that was not subject to verification (unsubsidized and PLUS Loan funds) and for which the conditions of a late disbursement were met prior to the withdrawal.

Institutionally Scheduled Breaks

Institutionally scheduled breaks of five or more consecutive days are excluded from the R2T4.  

When Funds Are Disbursed Using Different Payment Periods

When the University disburses different types of aid using different payment periods, e.g., one payment period for disbursing grant funds and another payment period for disbursing DL, only one payment period is used in determining earned funds.  The payment period ending later is used for the R2T4 calculation.

Percentage of Federal Financial Aid Earned

The calculation of Percentage of Federal Financial Aid Earned includes all financial aid disbursed or that could have been disbursed to a student.  This percentage is equal to the percentage of the payment period completed by the student as of the student’s last date of attendance in the payment period.  If the student withdraws after successfully completing the payment period, 100% of the federal financial aid funds are earned and no calculation is required.  If the withdrawal date occurs after the student completes more than 60% of the payment period, the student earns 100% of the federal financial aid funds.

Financial Aid Earned Calculation

The percentage of the period completed is calculated as follows:

Number of calendar days completed in the payment period

Total number of calendar days in the payment period

Number of Calendar Days Completed in the Payment Period

The total number of calendar days completed in the payment period (numerator) is the count of calendar days from the start date of the payment period to the student’s last date of attendance.  Calendar days are removed from calendar days completed in the payment period if any of the following occurred between the payment period start date and the student’s last date of attendance:

• Institutionally scheduled breaks of five (5) consecutive calendar days or more

• Holidays

• Inclement weather

• Administrative

• Student scheduled or selected breaks of five (5) consecutive calendar days or more between courses
• All approved Leave of Absence calendar days

Total Number of Calendar Days in the Payment Period

The total number of calendar days in a payment period (denominator) is determined based upon the number and type (credential level and modality) of credits awarded in the payment period.  Calendar days are removed from the calendar days in the payment period if any of the following occurred or is scheduled to occur from the start date of the payment period to the end date of the payment period:

• Institutionally scheduled holiday breaks of five (5) consecutive calendar days or more 
• Student scheduled of selected breaks of five (5) consecutive calendar days or more between courses  
• All approved Leave of Absence calendar days 
• Periods of non-enrollment of five (5) consecutive calendar days or more due to administrative and inclement weather closures

Calculation Examples

The following examples illustrate the calculations outlined above.  The figures provided are examples only; actual amounts may vary for each student/program.

BSN Example - illustrative purposes only.

Payment Period is 4/3/16 to 8/20/16.  Last documented date of attendance was 5/17/06.  Scheduled breaks of 5 days or more:  none

Number of calendar days completed in the payment period = 45

Total number of calendar days in the payment period = 140

 

Percentage of the payment period completed = 32.1%

Online RN-MSN Example - illustrative purposes only.

Payment Period is 5/9/16 to 8/28/16.  Last documented date of attendance was 5/17/16.  Scheduled breaks of 5 days or more:  none

Number of scheduled hours completed in the payment period = 9

Total number of scheduled hours in the payment period = 112

 

Percentage of the payment period completed = 8.0%

MSOT Example - illustrative purposes only.

Payment Period is 1/5/15 to 4/17/15.  Last documented date of attendance was 3/3/15.  Scheduled breaks of 5 days or more:  none

 

Number of calendar days completed in the payment period = 58

Total number of calendar days in the payment period = 103

 

Percentage of the payment period completed = 56.3%

Title IV Credit Balance and the Return Calculation

A Title IV credit balance created during the after the last date of attendance is not released to the student nor returned to federal financial aid programs prior to performing the R2T4 calculation.  The University holds these funds even if, under the 14-day credit balance payment requirements, funds are otherwise required to be released.  In the R2T4 calculation, the University includes any federal financial aid credit balance as disbursed aid.  Although not included in the R2T4 calculation, any federal financial aid credit balance from a prior payment period in the academic year that remains on a student’s account when the student withdraws is included as federal financial aid funds for purposes of determining the amount of any final federal financial aid credit balance when a student withdraws.  Upon application of any applicable refund policies, a federal financial aid credit balance is allocated first to repay grant overpayments owed by the student as result of the current withdrawal.  Within 14 days of the date that the University performs the R2T4 calculation, the University pays any remaining federal financial aid credit balance in one or more of the following ways:

• in accordance with regulations to pay authorized charges at the University (including previously paid charges that are now unpaid due to a return of Title IV funds by the University)
• in accordance with instructions provided by the student (and parent for a PLUS loan) on the mostly recently submitted ‘Authorization to Retain Funds Form’ or other written instructions to reduce the student’s loan debt (not limited to loan debt for the period of withdrawal).  In the absence of a signed ‘Authorization to Retain Funds Form’ or other written instructions, the University pays the credit balance to the student (or parent for a PLUS loan). 
• If the University is unable to locate the student (or parent) when attempting to pay a credit balance to the student (or parent), it returns the funds to federal financial aid programs.

Return of Unearned Aid

In the R2T4 calculation, the total Amount Disbursed plus Amount that Could Have Been Disbursed to the student or on the student’s behalf, minus the Amount of Federal Financial Aid Earned by the Student determines the amount of federal financial aid funds that are “unearned” and therefore required to be returned to the funding source.  When a return of federal financial aid is required, the University and the student may both need to return funds.  The University returns the lesser of the following amount to the appropriate federal financial aid program(s):

• The total amount of unearned aid; or
• The amount equal to the total University charges incurred by the student for the payment period, multiplied by the percentage of unearned aid.

University (institutional) charges incurred by the student include tuition, fees, books and supplies purchased through the University for the entire payment period.  Initial charges are only adjusted for changes the University makes prior to the student’s withdrawal.  The amounts of institutional charges included in the R2T4 calculation are those charged or anticipated to be charged to the student’s account.  Although institutional charges may not have actually been charged due to the student’s withdrawal, the University uses the actual charges to date, to include full tuition, fees, books and supplies purchased through the University for each course in the payment period, and estimates remaining charges based on the students’ program.  If after the student withdraws, the University changes the amount of institutional charges it assessed, or decides to eliminate all institutional charges, those changes do not impact the charges or aid earned in the calculation.  The University returns federal financial aid funds to programs in the following order up to the net amount disbursed from each:

• Unsubsidized FFEL/Direct Unsubsidized Loan

• Subsidized FFEL/Direct Subsidized Loan

• Federal Direct PLUS (Parent of Dependent Student)

• Federal Pell Grants

• FSEOG

• Iraq & Afghanistan Service Grant (IASG) 

After the University allocates its portion of unearned funds, the student must return federal financial aid owed in the same order specified above for the University.  The amount of federal financial aid the student is responsible for returning is calculated by subtracting the amount returned by the University from the total amount of unearned federal financial aid funds to be returned.  The student (or parent in the case of funds due to a parent PLUS Loan) must return or repay, as appropriate, the calculated amount to any federal financial aid loan program in accordance with the terms of the loan; and any federal financial aid grant program as an overpayment of the grant.  The amount of a grant overpayment due from a student is limited to the amount by which the original grant overpayment exceeds one-half of the total federal financial aid grant funds received by the student.  The University may round final repayment amounts for which the University and student are responsible to the nearest dollar.

Timelines for Return of Funds

The University completes a student’s R2T4 calculation within 30 days of the University’s date of determination.  The University returns the amount of federal financial aid funds for which it is responsible as soon as possible but no later than 45 days after the date the University determines the student has withdrawn. 

Deceased Student

If the University receives reliable information indicating an individual borrower or student for whom a parent received a PLUS Loan dies, the University suspends further awarding and disbursements.  An original or certified copy of the death certificate or accurate and complete photocopy of the original or certified copy of the death certificate is requested and forwarded to the Department of Education.  Under exceptional circumstances and on a case-by-case basis, the Department of Education may approve a discharge based upon other reliable documentation supporting the discharge request.