Return of Title IV Funds

The law specifies how schools must determine the amount of Title IV program assistance (Stafford Loans) that students earn if they withdraw from school. See section on Withdrawals for specific information regarding Leaves of Absence (LOA) and the withdrawal process. The Office of Financial Aid is responsible for calculating R2T4 and uses worksheets and software provided by the US Department of Education to calculate the R2T4 funds. All funds must be returned to the lender within 45 days of the date of when the school determined that a student withdrew. If you have questions about your Title IV program funds, students can call the Federal Student Aid Information Center at 1-800-4-FEDAID (1-800-433-3243). TTY users may call 1-800-730-8913. Information is also available on Student Aid on the Web at www.studentaid.ed.gov.

When a student withdraws during a payment period, the amount of Title IV program assistance that has been earned up to that point is determined by a specific formula. The date of withdrawal is either the date the student notified the Registrar or Program Coordinator of their intent to withdraw or the date the student submitted a withdrawal letter, whichever comes first. If the student received (or the school received on the student's behalf) less assistance than the amount earned, the student may be able to receive those additional funds. If the student received more assistance than was earned, the excess funds must be returned by the school and/or the student.

Attendance is taken in all courses and reported by the professors to the Program Coordinator at the end of each semester or immediately in case of repeated absences. The Program Coordinator will consult with the student's instructors to determine if the student never attended classes or to verify the last date of attendance. Without an official withdrawal letter, the School will use the last date of attendance to compute the R2T4 formula.

In the case where a student notifies the Program Coordinator or a faculty member that he or she intends to withdraw, the student is informed of the need to send a formal withdrawal letter, document the date the student notified them and share that information with the School Registrar. Should the student fail to send the withdrawal letter or there is a lag between the notification and the filing of the form, the earlier date of notification will be used in calculating the R2T4 formula. In the event a student receives all failing grades for a semester, the Program Coordinator will contact the faculty members to determine if the "F" grades were earned or represent a lack of attendance. In the event it is determined that those grades were the result of lack of attendance , the Program Coordinator and faculty will attempt to determine the last day of attendance and use that date in the R2T4 calculations. If the exact date cannot be determined, the School will assume a 50% attendance, and use that date as the last date of attendance. Students who do not attend at least one class, are ineligible for Title IV funds and all of the loan proceeds will be returned to the lender.

The amount of assistance earned is determined on a pro rata basis. The payment period is the semester for which the loan was certified and the percent of attendance is calculated by dividing the number of day attended by the total number of days in the payment period. For example, if the student completes 30% of the payment period or period of enrollment, the student has earned 30% of the assistance they were originally scheduled to receive. Once the student has completed more than 60% of the payment period or period of enrollment, all the assistance that the student was scheduled to receive for that period is considered to have been earned If the student did not receive all of the funds that were earned, he or she may be due a post-withdrawal disbursement. If the post-withdrawal disbursement includes loan funds, the student may choose to decline the loan funds so that additional debt is not incurred. The Office of Financial Aid will use the R2T4 worksheets as provided by the US Department of education to determine how much of the loan may be retained and how much must be returned.

The school may automatically use all or a portion of the students's post-withdrawal disbursement (including loan funds, if the student accepts them) for tuition, fees, and room and board charges (as contracted with the school). For all other school charges, the school needs the student's permission to use the post-withdrawal disbursement. If the student does not give permission (which some schools ask for at the time of enrollment) the student will not be offered the funds. However, it may be in the student's best interest to allow the school to keep the funds to reduce the debt at the school.

There are some Title IV funds that students were scheduled to receive that cannot be earned once a student withdraws because of other eligibility requirements. If the student receives (or the school receives on behalf of the student) excess Title IV program funds that must be returned, the school must return a portion of the excess equal to the lesser of:

1. The institutional charges multiplied by the unearned percentage of the funds, or

2. The entire amount of excess funds.

The school must return this amount even if it didn't keep this amount of the Title IV program funds. If the school is not required to return all of the excess funds, the student must return the remaining amount. Any loan funds that must be returned, the student must repay in accordance with the terms of the promissory note. That is, scheduled payments are made to the holder of the loan over a period of time. Students who have received a refund of their loan proceeds before withdrawing may be required to return part or all of those funds to the lender.

Title IV funds will be returned in the following order:

1. Unsubsidized Federal Stafford loans

2. Subsidized Federal Stafford loans

3. PLUS Loan Funds

The requirements for Title IV program funds when students withdraw are separate from any refund policy that the school may have. Therefore, the student may still owe funds to the school to cover unpaid institutional charges. The school may also attempt to collect from the student any Title IV program funds that the school was required to return. Students may receive a copy of the refund Policy from the Business Office.

If you have questions about your Title IV program funds, you can call the Federal Student Aid Information Center at 1-800-4-FEDAID (1-800-433-3243). TTY users may call 1-800-730-8913. Information is also available on Student Aid on the Web at www.studentaid.ed.gov.

 
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Brad Svenningson USA
M.A., School of International Relations
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