Return of Title IV Funds (R2T4)
Return of Title IV Funds (R2T4)
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This is a federal regulation that outlines the policies and procedures related to the withdrawal of students who receive Title IV funds before completing the semester or program. Title IV funds are federally funded programs such as Federal Pell Grant and Federal Supplemental Educational Opportunity Grants (FSEOG). When a student withdraws, the financial aid office must determine how much of the Title IV aid the student earned and return the unearned portion to the U.S. Department of Education. These policies ensure compliance with Federal Student Aid guidelines and regulations.
The financial aid office awards Title IV funds to eligible recipients enrolled at ASCC under the assumption that the student will attend the entire period of enrollment. However, if the student withdraws from school before the completion of the enrollment period, the student may no longer be eligible for the full award that the student originally was scheduled to receive. Depending on the date of withdrawal, the student may be required to return a portion of the financial aid received. This could result in a balance owed to the institution.
Official and Unofficial Withdrawals
Official Withdrawal: When a student officially withdraws from all courses, the financial aid office must determine how much of the financial aid was “earned” by the student up to the point of withdrawal. The unearned portion must be returned to the federal government.
Unofficial Withdrawal: If a student stops attending classes but does not officially withdraw, the ASCC Registrar’s Office will determine the last date of attendance (LDA). The financial aid office will then calculate how much of the aid was earned, similar to the official withdrawal process.
Withdrawal Date: The term “withdrawal date” is used only to calculate the amount of Pell and FSEOG aid earned by the student. To determine the student’s withdrawal date, the student must successfully complete and submit a “Withdrawal” form to the Registrar’s Office. The student, or in case of an emergency, a person designated by the student, initiates the process by acquiring the form from the Registrar’s Office for processing through the offices listed on the form. The withdrawal process is completed when the form is received by the Registrar’s Office and the “W” is posted in the student information system.
Per federal regulations, any student who receives financial aid and then withdraws from all courses before completing 60% of the semester, will be required to repay a portion of any unearned federal financial aid received. The financial aid office will calculate the amount of unearned federal aid and notify the student of the amount to be returned, the due date, and the procedure.
In the event the student fails to initiate the withdrawal, the withdrawal date used to compute Pell and FSEOG aid earned by the students is established in accordance with the following chart. Students considering withdrawing/dropping classes are referred to the Financial Aid Office to understand the implications and possible consequences of withdrawal from school.
Earned vs. Unearned Aid:
Title IV aid is earned in proportion to the percentage of the term that the student completed. For example, if a student completes 30% of the term, they earn 30% of their aid.
If a student withdraws after completing 60% of the term, they are considered to have earned 100% of the Title IV aid and no funds need to be returned.
Calculation of Return: If the student received their award before the withdrawal, the student may be required to repay a portion or all of the funds the student received. The financial aid office will perform a post-withdrawal calculation to determine the amount of funds the student has earned up to the date of withdrawal. If the amount disbursed is greater than the amount earned, the student must reimburse those unearned funds to the Department of Education via the ASCC finance office. ASCC will hold the student responsible for the entire amount of unearned aid. Until any overpayment is cleared, the student will not be able to receive any services for ASCC. Failure to reimburse any unearned funds to ASCC may result in reporting the overpayment to the National Student Loan Database System (NSLDS). The formula to calculates the amount of unearned aid that must be returned is as follows;
Earned Aid = ____________Days Completed_______ x Total Aid Disbursed
Total Days in Payment Period
Any unearned portion of the aid (the difference between earned and disbursed aid) must be returned to the federal government.
Institutional and Student Responsibilities
ASCC Financial Aid Office Responsibility: The financial aid office must return the unearned portion of the aid to the federal government within 45 days of determining the student's withdrawal. The financial aid office also notifies the student if any remaining balance is due to the ASCC Finance Office. ASCC is responsible for adhering to federal regulations and ensuring proper calculation and return of funds.
Student’s Responsibility: If the unearned aid was used to pay for institutional costs (tuition, fees, etc.), the student may owe a balance to the ASCC finance office. A student may still owe funds to the school even after the federal funds are returned. If a student does not repay the required unearned funds, they may become ineligible for future Title IV aid until the balance is resolved.
Post Withdrawal Disbursement: If a student earned more aid than was disbursed, they may be eligible for a post-withdrawal disbursement, which the Financial Aid Office will notify the student of the eligibility and process accordingly. The student may accept or decline this disbursement. The R2T4 policy is separate from ASCC’s refund policy.
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