Return to Title IV (R2T4)
When a student withdraws or his/her enrollment is otherwise terminated, the College will not only calculate the amount of tuition/fees that will be refunded to the student (if any), but also the amount of federal financial aid (aka “Title IV”) that must be returned to the Federal Student Aid Programs (if any). This process is referred to as “Return to Title IV” (R2T4). The calculation of R2T4 has no relationship to the tuition and fees that the student may be charged by the College. The R2T4 calculation is performed using forms and/or software compliant with U.S. Department of Education guidelines.
R2T4 and Modules (Credit Hour Programs Only)
If a student withdraws but notifies the College, in writing, of his or her intent to return in a later module in that same semester with 45 calendar days of the original withdrawal, and actually returns for that module, the student is not considered to have withdrawn for purposes of R2T4. A student who returns in this manner and subsequently withdraws will have their R2T4 calculation based upon the subsequent Withdrawal Date.
R2T4 Calculation Information
Title IV funds are earned in a prorated manner based upon calendar days through the student’s “Withdrawal Date” (see definitions below). After the 60 percent point in the payment period, a student is considered to have earned 100 percent of the Federal Student Aid funds they were eligible to receive for that payment period.
The “payment period” is defined as the semester for credit-hour programs, and one-half of the scheduled clock-hours in one academic year for clock-hour programs.
The Withdrawal Date is the student’s last date of documented attendance (LDA) from the College’s official attendance records.
Percentage Basis for R2T4 Proration
For credit-hour programs, the percentage of the payment period completed is the calendar days completed in the period divided by the total calendar days in the period as of the withdrawal date (not including College breaks of five or more days).
For the Post-Secondary Adult Vocational (PSAV-clock-hour) programs, the percentage of the payment period completed is the total number of scheduled clock-hours in the payment period, divided into the number of clock hours scheduled to have been completed by the student through the student’s Withdrawal Date.
Return of Unearned Funds
If, based on the calculation, the student has earned less than the amount of Title IV funds disbursed, the unearned funds must be returned. The College must return the lesser of:
- the amount of federal financial aid funds that the student has not earned, or
- the amount of institutional charges that the student incurred for the payment period multiplied by the percentage of federal financial aid funds that was not earned.
The student (or parent, in the case of a PLUS loan) must return or repay, as appropriate:
- any Federal Direct Student Loan Program or Federal PLUS funds in accordance with the contracted terms of the loan, and
- the remaining unearned federal grant funds (not to exceed 50 percent of the grant owed) as an overpayment” of the grant (see below).
Refunds are calculated according to applicable federal law and regulation. All returned funds for which the College is responsible will be issued by the Business Office promptly after the College has determined that the student has withdrawn and the applicable return calculations have been completed. (once the Withdrawal Date has been determined, the refunds and R2T4 calculations and all associated transactions are generally completed with thirty calendar days, but never longer than forty-five days).
Any amount of unearned federal grant funds that a student must return directly is called an “overpayment”. The maximum amount of a grant overpayment is one half of the grant funds received or scheduled to be received. While this occurs very rarely, students in this circumstance must make arrangements with the College and/or the U.S. Department of Education to return the unearned grant funds. Failure to do so will result in loss of future eligibility for Federal Student Aid, and potential other legal actions by the U.S. Department of Education.
Financial Aid Programs R2T4 Refund Sequence
Unearned funds returned by the College must be credited to outstanding balances on Title IV loans made to the student or on behalf of the student for the payment period for which a return of funds is required. Those funds will be credited to outstanding balances in the following order:
- Unsubsidized Federal Direct Stafford Loan,
- Subsidized Federal Direct Stafford Loan, and
- Federal Direct PLUS Loan received on behalf of the student.
If unearned funds remain to be returned after repayment of all outstanding loan amounts for the payment period, the remaining excess must be credited to any amount awarded for the payment period in the following order:
- Federal Pell Grant.
- Federal SEOG, and
- Other grant or loan assistance authorized by Title IV of the Higher Education Act
The College will disburse Federal Pell Grant funds that had not yet been disbursed at the time of the student’s withdrawal/termination, but for which the student remains eligible under the R2T4 calculation. In the case of student or parent loan funds, the College will calculate the student (or parent’s) eligibility for a “post-withdrawal disbursement”. The Financial Aid Office will advise the student and/or parent borrower of the amount(s) available and the fourteen calendar day deadline to accept or decline the post-withdrawal disbursement. If a response is not received from the student and/or parent within the permitted time frame or the student declines the funds, the College will not request the funds from Title IV programs. If the post-withdrawal disbursement is accepted, the funds will first be used to settle any outstanding financial obligation to the College.