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Federal Return of Title IV Funds (R2T4) Policy

Federal Return of Title IV Funds (R2T4) Policy

Authority: 
Business Affairs and University Services
Date enacted or revised: 
August 29, 2005; Revised January 2014, Revised July 2016

Purpose
 
Federal regulations require Title IV aid, which includes Federal Pell Grant, TEACH Grant, Federal Perkins Loan, Federal Supplemental Educational Opportunity Grant (SEOG), Federal Work Study (FWS), and Federal Direct Stafford Loan (Subsidized, Unsubsidized, and Parent) programs, to be awarded under the assumption that a student will attend the University for the entire period in which federal financial assistance is awarded. However, in the event a student withdraws or stops attending class, the University is required to determine if the student has fully earned the awarded Title IV aid. As required by federal regulations, the University uses a pro-rated schedule to determine the amount of federal financial aid that the student "earned" and return the “unearned” disbursed funds to the appropriate federal program. Once 60% of the semester or summer term is completed, the student is considered to have earned all the federal financial aid and will not be required to return any funds.
 
Policy
 
When a recipient of Title IV aid officially withdraws or unofficially withdraws (drops out, stops attending, is expelled, takes an unapproved leave of absence, or fails to return from an approved leave of absence) on or before completing 60% of the full semester or summer term, or any accelerated part of term, the University must apply the Return of Title IV Funds (R2T4) calculation and determine the amount of funds to return to the appropriate federal programs. At McNeese State University, the Office of Financial Aid is responsible for the R2T4 calculation and return of federal funds processes.
 
When a student officially withdraws or resigns from the University, the student’s official withdrawal date will be used in the R2T4 calculation. When a student unofficially withdraws, the student’s last date of attendance or the 50% midpoint of the term, whichever is later, is used in the R2T4 calculation. Federal financial aid regulations consider a student to be an unofficial withdrawal if the student receives all failing or incomplete grades, or a combination of withdrawal, failing, or incomplete grades (F, U, I, IN, IPC, NC, NCE, W, WM, WN, WX, WZ), for the term.
 
R2T4 Calculation
 
Upon determination that a student has withdrawn, whether officially or unofficially, the Financial Aid Office will process the R2T4 calculation. The following steps are used to calculate the amount of aid a student has earned and how much must be returned (if any) to the federal programs:
 
  1. Determination of the withdrawal date:  For official withdrawals, this is the date the course withdrawal form or resignation is received by the Office of the Registrar. For unofficial withdrawals, this is the mid-point of the term or the last documented date of attendance in an academically-related activity (e.g., documented attendance in a class or lab or submission of an assignment in an on-line course), whichever is later.
 
  1. Determination of the amount of aid the student earned:  The percentage of aid the student has earned is equal to the percentage of the semester, summer term, or accelerated part of term (payment period) the student has completed.
    1. The percentage of the payment period completed is calculated by dividing the total number of calendar days completed by the total number of calendar days in the term. Scheduled breaks of five or more days are excluded.
    2. The amount of aid the student has earned is calculated by multiplying this percentage by the total amount of Title IV aid disbursed (and that which could have been disbursed) to the student.
    3. For example, if a student completes 35 days of a 118-day term, the percentage completed is 29.7% (35 completed days / 118 total days). If $2000 has been disbursed, the student is entitled to only $594, or 29.7% of that aid.
    4. A student who did not receive all of the funds earned may be due a post-withdrawal disbursement.
    5. Once 60% of the payment period is completed, the student is considered to have earned all federal aid and return of federal funds is not necessary.
 
  1. Determination of the amount of aid the student did not earn:  The amount of Title IV aid which must be returned is based on the percentage of unearned aid. That percentage is computed by subtracting the earned aid percentage from 100%. For example, if the earned aid percentage is 29.7%, the unearned aid percentage is 70.3% (100% - 29.7% earned = 70.3% unearned).
 
  1. Determination of the amount of aid the University must return:  The University will remit the percentage of the unearned Title IV funds that were disbursed or that could have been disbursed to the federal programs. The funds will be returned no more than 45 days from the date of the official withdrawal or the last date of attendance. The University will return the lesser of the total of unearned aid or an amount equal to institutional charges multiplied by the percentage of unearned aid. Unearned aid will be returned to the federal programs in the following order:
  • 1st - Unsubsidized Federal/Direct Loans
  • 2nd - Subsidized Federal/Direct Loans
  • 3rd - Federal PERKINS Loans
  • 4th - Federal PLUS Loans
  • 5th - Federal Pell Grant
  • 6th - Federal SEOG Grant
  • 7th - Federal TEACH Grant
  • 8th - Other Title IV Programs
The University will bill the student for any account balance created when Title IV aid is returned.
 
  1. Determination of the amount of aid the student must returnThe student will be responsible for repaying any remaining unearned portion that was disbursed to them. If a student’s portion of unearned Title IV funds is a loan, no action by the school is necessary. Regular loan terms and conditions apply. If a student’s portion of unearned Title IV funds is a federal grant, the student will be required to return no more than 50% of the amount received for the payment period.
 
Financial Aid Overpayments and Loss of Eligibility for Title IV Aid
 
Within 30 days of the determination that the student owes Title IV funds, the student will be sent a notification indicating such. If no payment is received, the University will place registration and transcript holds on the student’s account. The student will lose eligibility for Title IV aid unless the overpayment is paid in full or satisfactory repayment arrangements are made.
 
Refunds for Official Resignations
 
In the event of an official resignation during the University’s refund policy period, the policy will be applied, and tuition will be reduced by that amount. For purposes of this policy, an institutional refund is the credit balance created when the amount paid for institutional charges for a payment period exceeds the amount retained by the institution for the portion of the payment period in which the student was actually enrolled. Once the institutional refund is calculated, the student may be liable for any Title IV funds disbursed to his/her account in excess of the amount allowed by federal regulations. If applicable, the University will collect from the student the portion of federal aid owed. Unearned funds are allocated in the following order to the Title IV program from which the student received assistance:
  • 1st - Unsubsidized Federal/Direct Stafford Loans
  • 2nd - Subsidized Federal/Direct Stafford Loans
  • 3rd - Federal PERKINS Loans
  • 4th - Federal PLUS Loans
  • 5th - Federal Pell Grant
  • 6th - Federal SEOG Grant
  • 7th - Federal TEACH Grant
  • 8th - Other Title IV Programs
After the institutional refund has been credited in this order to the appropriate federal programs, any remaining amount will be returned to the student.
 
Communication
 
This information is communicated through the Administrative Advisory Council, the Academic Advisory Council, the University Policy webpage, the University Consumer Disclosure webpage, and the University Office of Financial Aid webpage.
 
See also
 
Grading System Policy
Withdrawal from Courses and Resignation from the University Policy
Withdrawal from Courses for Non-Attendance Policy