Frequently Asked Questions

About R2T4

What are the benefits of using Return of Title IV Funds on the Web?

The Web-based product is an easy-to-use application. Student data is stored on the Web server, and storage space is virtually unlimited. Schools no longer have to download and install software to individual or multiple PCs. Also, changes can be made much more rapidly in the Web-based product than to the PC software.

What do the terms "data export" and "comma delimited" mean?

The Data Export function enables financial aid administrators (FAAs) to extract records specifically associated with their logins from the R2T4 system to their PCs. FAAs can also choose to view a display of their R2T4 records on their PC screens.

When the Data Export function is chosen, two formatting options are presented for the records marked for export: comma-delimited text file and browse data.

Under the comma-delimited text file option, the various fields of data that comprise each record are separated by a comma in the text file created. The comma-delimited format is easily read by a variety of software products that may reside on a PC (such as Microsoft Excel, Microsoft Access, etc.) to create custom reports, etc. Schools will need to supply a file name and a save location for the file being exported.

The Browse Data option displays data for all of a school's R2T4 records in a Web browser window on their PC. Records can only be viewed in this option.

Will the application on the Web continue to be non-year-specific?

Yes, Return of Title IV Funds on the Web will not be year-specific. Since this Web-based product serves a multi-year purpose, the data is stored for the school at ED's data center.

College Cost Reduction and Access Act (CCRAA) Compliance

What updates were made to R2T4 on the Web to ensure compliance with the College Cost Reduction and Access Act (CCRAA) of 2007, Pub. L. 110-84?

Federal Student Aid updated R2T4 on the Web in July 2008 to implement changes related to provisions of the CCRAA.

As part of this update, we added new CCRAA-compliant credit-hour and clock-hour R2T4 worksheets and a new Post-Withdrawal Disbursement worksheet for use with students who have a withdrawal date on or after July 1, 2008. The CCRAA-compliant worksheets are designed to capture the same information as the modified paper R2T4 and Post-Withdrawal Disbursement worksheets we have posted to Federal Student Aid’s Information for Financial Aid Professionals (IFAP) Web site, located at ifap.ed.gov.

Based on the withdrawal date you enter when adding a new student record, the Web site displays the appropriate worksheet (pre-HERA, HERA, or CCRAA) and associated entry fields and performs calculations according to the rules and regulations applicable to the specific worksheet.

The following additional changes, related to the CCRAA, were implemented in the July 2008 update to R2T4 on the Web:

TEACH Grant Added to R2T4, Post-Withdrawal Disbursement Worksheets – The CCRAA created the Teacher Education Assistance for College and Higher Education Grant (TEACH Grant) Program, which provides grants of up to $4,000 per year to students who intend to teach full-time in a public or private elementary or secondary school that serves students from low-income families, in a high-need field of teaching. If a student who receives a TEACH Grant does not complete the required teaching, the grant must be repaid as a Direct Unsubsidized Loan under the William D. Ford Federal Direct Loan Program. TEACH Grants are available to eligible students beginning with the 2008-2009 school year.

We added the TEACH Grant to the modified credit-hour and clock-hour R2T4 worksheets (in Step 1, Step 6, and Step 10) and the Post-Withdrawal Disbursement worksheet (in Step IV) for students with a withdrawal date on or after July 1, 2008.

Note: The TEACH Grant is treated as a grant (not a loan) for R2T4 and Post-Withdrawal Disbursement calculation purposes.

The TEACH Grant does not appear on worksheets for students with a withdrawal date prior to July 1, 2008.

• Post-Withdrawal Disbursement Tracking Status Page and Report Redesigned to Separate Grant and Loan Calculations – The CCRAA modified the amount of time a school has to make a post-withdrawal disbursement of loan or grant funds to a student. Under pre-CCRAA regulations, a school had 120 days from the date of the school’s determination that the student withdrew to make a post-withdrawal disbursement of loan or grant funds to the student. The CCRAA revised the time period to make a direct disbursement of the grant portion of a post-withdrawal disbursement not credited to the student’s account to a maximum of 45 days from the date of determination. When any portion of a post-withdrawal disbursement is comprised of Title IV loan proceeds, the institution has 30 days from the date of determination to notify the borrower to request confirmation of the borrower’s need for the loan. The institution has up to a maximum of 180 days from the date of determination to complete the post-withdrawal disbursement of the loan portion of the disbursement. Institutions may no longer request a waiver for periods longer than 180 days from the date of determination.

As a result of the CCRAA and the new contrast between the time period for post-withdrawal disbursements of loan funds (180 days) and post-withdrawal direct disbursements of grant funds (45 days), we redesigned the Students with a Post-Withdrawal Disbursement Notification Tracking Status page and its associated report to provide unique countdown information for pre-CCRAA and CCRAA records.

Prior to displaying post-withdrawal disbursement records on the Students with a Post-Withdrawal Disbursement Notification Tracking Status page or its associated report, R2T4 on the Web now prompts you to select one of the following options for viewing records:

1) Withdrawal Date Prior to July 1, 2008: This option will display both loan and grant post-withdrawal disbursement status information for students with a withdrawal date prior to July 1, 2008. The Web site calculates the difference between the R2T4 system date and date of the school’s determination that the student withdrew, and then subtracts the result from 120. The result appears in the # Days Left From 120 field. The countdown for this field stops after the field “Post- Withdrawal Disbursement completed?” (on the Post-Withdrawal tab) is set to Yes.

2) Withdrawal Date on or after July 1, 2008 – Loans: This option displays loan post-withdrawal disbursement status information for students with a withdrawal date on or after July 1, 2008. The Web site calculates the difference between the R2T4 system date and date of the school’s determination that the student withdrew, and then subtracts the result from 180. The result appears in the # Days Left From 180 field. The countdown for this field stops after the new “Post-Withdrawal Disbursement completed - Loans?” field (on the Post-Withdrawal tab) is set to Yes.

3) Withdrawal Date on or after July 1, 2008 – Grants: This option displays grant post-withdrawal disbursement status information for students with a withdrawal date on or after July 1, 2008. The Web site calculates the difference between the R2T4 system date and date of the school’s determination that the student withdrew, and then subtracts the result from 45. The result appears in the # Days Left From 45 field. The countdown for this field stops after the new “Post-Withdrawal Disbursement completed - Grants?” field (on the Post-Withdrawal tab) is set to Yes.

Note: More information regarding the CCRAA is available on the IFAP Web site.

How can I perform a CCRAA-compliant R2T4 or Post-Withdrawal Disbursement calculation for a student who has a withdrawal date prior to July 1, 2008?

The regulations implementing the changes brought about by the CCRAA (see 72 Federal Register 62014) allow institutions to adopt the final regulations as of the date the rules were published. Institutions can perform R2T4 and Post-Withdrawal Disbursement calculations according to the updated regulations in the CCRAA for students with a withdrawal date as early as November 1, 2007 by using the modified paper R2T4 and Post-Withdrawal Disbursement worksheets available on Federal Student Aid’s IFAP Web site.

Federal Student Aid updated R2T4 on the Web in July 2008 to implement changes established in the CCRAA. For students with a withdrawal date on or after July 1, 2008, schools can use either the updated worksheets on the IFAP Web site or R2T4 on the Web to perform CCRAA-compliant calculations.

Note: Federal Student Aid strongly recommends that schools use the revised paper worksheets (and not R2T4 on the Web) to perform calculations for students who have a Withdrawal Date prior to July 1, 2008 but a Date of School’s Determination that the Student Withdrew on or after July 1, 2008. The Web site will not correctly calculate certain countdown statistics for records falling under this scenario.

Higher Education Reconciliation Act (HERA) Compliance

What updates were made to R2T4 on the Web to ensure compliance with the Higher Education Reconciliation Act (the HERA) of 2005, Pub. L. 109-171?

R2T4 on the Web was updated in August 2006 to comply with all regulatory provisions established in the HERA. Subsequent updates were implemented in July 2008 to comply with regulatory provisions established in the College Cost Reduction and Access Act (CCRAA) of 2007, Pub, L. 110-84. For more information on the CCRAA updates to R2T4 on the Web, click CCRAA.

Listed below are the HERA provisions that affected R2T4 on the Web. Click the title to learn more about how each provision was implemented in R2T4 on the Web:

Student Withdrawal Date as “Trigger” for Worksheet Versions
As a result of the HERA provisions, R2T4 and Post-Withdrawal disbursement worksheets differ for students who withdrew from a school before July 1, 2006 versus students who withdraw on or after July 1, 2006.

Title IV Programs Covered by R2T4 (Grants)
Section 8003 of the HERA established the Academic Competitiveness Grant (ACG) and National SMART Grant as Title IV funds covered under the R2T4 process. Section 8022 of the HERA excluded the LEAP and SLEAP grant programs from R2T4 calculations.

Title IV Programs Covered by R2T4 (Loans)
Section 8005 of the HERA extended PLUS loan eligibility to graduate students and added it to the R2T4 calculation.

R2T4 Clock-Hour Calculations Now Based on Scheduled Hours
Section 8022 of the HERA stipulated that the R2T4 calculation for percentage of Title IV aid earned for clock-hour students be based on scheduled hours.

Change in Student’s Amount of Title IV Grants to Return
Section 8022 of the HERA changed the Title IV grant protection calculation affecting the total amount of Title IV grant funds a student must return if the student withdraws on or after July 1, 2006.

De Minimis (Minimum) Student Grant Repayment Obligation Amount Increased from $25 to $50
Section 8022 of the HERA provided that students with a withdrawal date on or after July 1, 2006 are not responsible for returning funds to any Title IV grant programs to which the student owes $50 or less.

Borrower Contact Required Prior to Post-Withdrawal Loan Disbursement
Section 8022 of the HERA stipulated that schools must contact borrowers and receive an affirmative response prior to making a post-withdrawal disbursement of loan funds.

Time Period for Return of Funds by Schools Increased to 45 Days
Section 8022 of the HERA increased the total number of days schools have to return funds to ED from 30 to 45 days from the date of the school’s determination that the student withdrew.

Leave of Absence Allowance
Section 8022 of the HERA stipulated that if a student takes one or more leaves of absence from a school for no more than a total of 180 days during any 12-month period, the student is not considered withdrawn from the school during the leaves of absence and the school does not need to calculate the amount of grant and loan assistance to be returned.

Additional information regarding R2T4 on the Web changes tied to specific HERA provisions are provided in the subsequent sections of this FAQ. In most cases, the change described is only applicable to student records with a withdrawal date on or after July 1, 2006.

Note: More information regarding the HERA, including Dear Partner/Colleague Letters, is available on Federal Student Aid’s Information for Financial Aid Professionals (IFAP) Web site, located at ifap.ed.gov.

Student Withdrawal Date as “Trigger” for Worksheet Versions

As a result of the HERA provisions, R2T4 and Post-Withdrawal disbursement worksheets differ for students who withdrew from a school before July 1, 2006 versus students who withdraw on or after July 1, 2006.

Schools must continue to follow the pre-HERA R2T4 rules and regulations for students who withdrew before July 1, 2006. Federal Student Aid released redesigned credit-hour and clock-hour R2T4 worksheets and a new Post-Withdrawal disbursement worksheet specifically for students who withdraw on or after July 1, 2006.

Note: Federal Student Aid has subsequently implemented a third set of R2T4 and Post-Withdrawal disbursement worksheets for students who withdraw on or after July 1, 2008 to comply with regulatory changes in the CCRAA.

R2T4 on the Web Change: Before you create a new R2T4 record, you must provide the student’s withdrawal date, award year, and school calendar profile. Based on the withdrawal date, the Web site displays the appropriate worksheet and associated entry fields.

For example, if you create an R2T4 record for a student withdrawing from a clock-hour program on or after July 1, 2006, the R2T4 and Post-Withdrawal tabs display worksheets with fields for Academic Competitiveness Grant (ACG), National SMART Grant, and Graduate PLUS loan award data, and the R2T4 record is calculated based on the hours the student is scheduled to complete. By contrast, if the same student withdrew before July 1, 2006, R2T4 on the Web does not display the previously noted funds, and the R2T4 calculation is based on completed or scheduled hours.

Note the following important tips:

We recommend familiarizing yourself with the differences between the forms before performing calculations using R2T4 on the Web. The R2T4 and Post-Withdrawal worksheets for students who withdraw on or after July 1, 2006 display different field labels, worksheet steps, and worksheet item numbering than the worksheets displayed for students with a withdrawal date before July 1, 2006. Likewise, R2T4 and Post-Withdrawal worksheets also differ for records with a withdrawal date on or after July 1, 2008.
If you update a student’s withdrawal date from a date before July 1, 2006 to a date on or after July 1, 2006 on an existing record, or vice versa, R2T4 on the Web may need to remove some existing data you have entered in order to display the correct worksheets and associated fields. Consider printing a copy of the current R2T4 worksheet before you submit a new withdrawal date, particularly if the new date shifts the rules governing the record’s calculations from the pre-HERA provisions to the HERA provisions, or vice versa. Note: This consideration also applies if you update a record with a withdrawal date prior to July 1, 2008 to a withdrawal date on or after July 1, 2008.
For Unofficial Withdrawals (Withdrawal Type 3), if you do not know the date the student withdrew, you still need to enter a Withdrawal Date to ensure the correct calculation is performed, regardless of the worksheet version you are using. Although you must provide a withdrawal date on the Add R2T4 Record page, the withdrawal date does not print on the worksheet or display on the R2T4 View page once you select and submit Withdrawal Type 3 on the student's R2T4 record.
The Data Export feature includes R2T4 worksheet fields added for the HERA and the CCRAA, regardless of the withdrawal date of student records included in the export.

Title IV Programs Covered by R2T4 (Grants)

Section 8003 of the HERA established the Academic Competitiveness Grant (ACG) and National SMART Grant as Title IV funds covered under the R2T4 process. Section 8022 of the HERA excluded the LEAP and SLEAP grant programs from R2T4 calculations.

R2T4 on the Web Change: The R2T4 and Post-Withdrawal tabs for students with a withdrawal date on or after July 1, 2006 display entry fields for tracking ACG and National SMART Grant award data. R2T4 reports and the Data Export feature also include ACG and National SMART data when it is present on the student’s record.

For students with a withdrawal date before July 1, 2006, we include LEAP and SLEAP award data in the “Other Title IV Programs” value entered on either the R2T4 or Post-Withdrawal tabs. However, we do not include LEAP or SLEAP amounts for students who withdraw on or after July 1, 2006. (For additional information about when LEAP and SLEAP amounts are to be included in the R2T4 calculation, see GEN-04-03.)

Title IV Programs Covered by R2T4 (Loans)

Section 8005 of the HERA extended PLUS loan eligibility to graduate students and added it to the R2T4 calculation.

R2T4 on the Web Change: The R2T4 and Post-Withdrawal entry tabs for students with a withdrawal date on or after July 1, 2006 display entry fields for tracking Graduate PLUS award data separately from PLUS award data. R2T4 reports and the Data Export feature also include Graduate PLUS data when it is present on the student’s record.

R2T4 Clock-Hour Calculations Now Based on Scheduled Hours

Section 8022 of the HERA stipulated that the R2T4 calculation for percentage of Title IV aid earned for clock-hour students be based on scheduled hours.

R2T4 on the Web Change: The R2T4 tab for clock-hour students with a withdrawal date on or after July 1, 2006 automatically calculates the percentage of Title IV aid earned based on scheduled hours rather than allowing a choice between scheduled or completed hours.

Note: The percentage of Title IV aid earned (Box H) in Step 2 is calculated automatically when you submit your data on the R2T4 tab and displays only when you access the tab in View mode.

Change in Student’s Amount of Title IV Grants to Return

Section 8022 of the HERA changed the Title IV grant protection calculation affecting the total amount of Title IV grant funds a student must return if the student withdraws on or after July 1, 2006.

Under the HERA, the Title IV grant protection amount is calculated by multiplying the sum total of Title IV grant aid disbursed and Title IV grant aid that could have been disbursed for the payment period or period of enrollment by 50%. The Title IV grant protection amount is then subtracted from the initial amount of Title IV grants that the student has responsibility to return to calculate the adjusted amount of Title IV grants that the student is responsible to return.

R2T4 on the Web Change: The R2T4 tab automatically calculates the Title IV grant protection amount changed by the HERA in Step 9, Box T. The R2T4 tab displays Step 9 calculations only when the tab is accessed in View mode.

Note: For student records with a withdrawal date prior to July 1, 2006, the Title IV grant protection amount is calculated on a grant-by-grant basis in Step 8 of the R2T4 tab. For these records, the Web site multiplies the initial amount of each Title IV grant that the student has responsibility to return in Step 8 by 50% in order to calculate the adjusted amount of each Title IV grant that the student is responsible to return.

De Minimis (Minimum) Student Grant Repayment Obligation Amount Increased from $25 to $50

Section 8022 of the HERA provided that students with a withdrawal date on or after July 1, 2006 are not responsible for returning funds to any Title IV grant programs to which the student owes $50 or less.

R2T4 on the Web Change: The R2T4 tab for students with a withdrawal date on or after July 1, 2006 automatically calculates the de minimis student repayment obligation amount for each Title IV grant.

If the calculated total amount of Title IV grant funds for the student to return (Step 9, Box U on the R2T4 tab) is greater than $0, the calculated total amount is distributed to the individual Title IV grant programs listed in Step 10, according to the following guidelines:

The calculated total amount for the student to return in Step 9, Box U is distributed to Title IV grant programs in the order they are listed in Step 1 and Step 10 of the R2T4 tab (Pell Grant, Academic Competitiveness Grant, National SMART Grant, FSEOG, Other Title IV Grant Funds), AND

R2T4 on the Web repeats this distribution calculation for each successive Title IV grant program listed in Step 10 until the amount listed in Step 9, Box U is fully distributed, AND

If the remaining balance to be paid for any individual Title IV grant program is $50 or less, the student is not responsible for repayment of that grant, although the calculated remaining balance for the grant displays in Step 10.

Note: Records with a withdrawal date on or after July 1, 2008 take TEACH Grant funds into consideration in Step 1, Step 6, and Step 10, after FSEOG.

In addition to the calculation changes noted, student records with a withdrawal date on or after July 1, 2006 are displayed on the Student Notification, Student Repayment Arrangements – Completed, or Student Repayment Arrangements – Not Completed notification status tracking pages and their associated reports if the student owes any Title IV grant amount greater than $50 or any Title IV loan amount.

Borrower Contact Required Prior to Post-Withdrawal Loan Disbursement

Section 8022 of the HERA stipulated that schools must contact borrowers and receive an affirmative response prior to making a post-withdrawal disbursement of loan funds.

R2T4 on the Web Change: Data edits covering this HERA provision were added to the Post-Withdrawal tab for students with a withdrawal date on or after July 1, 2006. The data edits function as follows:

You can only submit loan award data in the Post-withdrawal Disbursement Made From section if the Response Status field value is “Response received” and the value in Amount of post-withdrawal disbursement accepted is greater than $0.

If you select the “Response not received” value for Response Status, you cannot submit loan award data in the Post-withdrawal Disbursement Made From section.

Time Period for Return of Funds by Schools Increased to 45 Days

Section 8022 of the HERA increased the total number of days schools have to return funds to ED from 30 to 45 days from the date of the school’s determination that the student withdrew.

R2T4 on the Web Change: “Days Remaining” calculations on R2T4 on the Web’s status tracking pages for School Portion of Title IV Funds To Be Returned and School Portion of Title IV Funds Returned are calculated according to the 45-day rule for student records with a withdrawal date on or after July 1, 2006. The 30-day calculation rule is followed for student records with a withdrawal date before July 1, 2006.

References to the 30-day countdown were removed from the “Days Remaining” column headings on the School Portion of Title IV Funds To Be Returned and School Portion of Title IV Funds Returned pages and the corresponding field labels on their associated reports.

Leave of Absence Allowance

Section 8022 of the HERA stipulated that if a student takes one or more leaves of absence from a school for no more than a total of 180 days during any 12-month period, the student is not considered withdrawn from the school during the leaves of absence and the school does not need to calculate the amount of grant and loan assistance to be returned.

This HERA provision only applies if the school has a formal policy regarding leaves of absence, the student followed that policy in requesting the leaves of absence, and the school approved the student’s requests in accordance with the policy, consistent with the provisions of 34 CFR 668.22(d).

R2T4 on the Web Change: No change was necessary for this HERA provision. The Leave of Absence Days entry field on the R2T4 tab allows you to enter a value range of 000-180 or blank, regardless of the student’s withdrawal date or worksheet version you are using.

Getting Help

Whom can a school contact if they need additional help performing an R2T4 calculation?

Schools can contact the Federal Research and Customer Care Center (RCCC) at 1-800-433-7327 or send an e-mail to fsa.customer.support@ed.gov.

Institutional Charges

Where can a school find information on what are considered institutional and non-institutional charges?

Guidance can be found in (1) the Federal Student Aid Handbook in the Institutional Eligibility and Participation section, (2) the Federal Register dated November 1, 1999, p.59033, (3) (34 CFR 668.22 (g) (1)(i) and (34 CFR 668.22 (g) (2) and (4) DCL - GEN 0024. For detailed information and updates regarding related federal regulations, review the Federal Student Aid (FSA) Handbook, which is available on ED's Information for Financial Aid Professionals (IFAP) Web site at ifap.ed.gov, and (5) A Policy Bulletin dated January 7, 1999 located on IFAP.

The institutional charges used in the calculation are always the institutional charges that were initially assessed the student for the payment period or period of enrollment, unless the school adjusted the student's institutional charges prior to the student's withdrawal (for example, for a change in enrollment status and the corresponding adjustment to the institutional charges was completed prior to the withdrawal). (§668.22(g)(1)(ii) and (2))

Because Title IV aid is provided for the entire payment period or period of enrollment, as applicable, the calculation uses institutional charges assessed for that entire payment period or period of enrollment. A school may not use the unpaid charges on the student's account at the time of withdrawal or the adjusted amount of institutional charges that results from the school's refund policy or from a "retroactive withdrawal" of the student.

If an adjustment is made to a student's institutional charges (for example, for a change in enrollment status) prior to the student's withdrawal, that adjusted amount of institutional charges is used. If a school did not process an adjustment to a student's institutional charges before the withdrawal, the institutional charges must reflect the amount initially assessed. (Dear Colleague Letter GEN-00-24)

What will constitute institutional charges when the school (non-term or non-standard term programs) chooses to calculate the R2T4 on a payment period basis, but charges are for a period longer than a payment period?

The "total institutional charges for the payment period" is the greater of the prorated institutional charges for the period, or the amount of Title IV assistance retained for institutional charges as of the student's date of withdrawal. (34 CFR 668.22(g)(3))

Can a school count application or registration fees as institutional charges?

No. Application and registration fees are excluded from institutional charges because they are not educational costs. (Federal Register, Vol. 59, No. 82, April 29, 1994, page 22356)

If a student is owed a post-withdrawal disbursement, and outstanding charges exist on the student's account, the school may credit the student's account with all or a portion of the post-withdrawal disbursement, to the extent that the post-withdrawal disbursement is made up grant funds, up to the amount of outstanding charges (§668.22(a)(4)(i)(A)). If loan funds comprise any portion of the post-withdrawal disbursement, the school must first contact the student (or parent in the case of a PLUS loan) to first confirm that the loan funds are still required prior to disbursing the loan portion and must be documented. Outstanding charges on a student's account are charges for which the school will hold the student liable after the application of any applicable refund policy. Such charges include the amount of institutional charges after any adjustment to reflect the amount the student will really owe after his or her withdrawal, any other current charges that remain on the student's account, and up to $200 for any permitted minor prior year charges.

For example, a student is due a post-withdrawal disbursement of $450. The institutional charges that the school originally assessed the student totaled $2,300; however, under the refund policy, the school may keep only $700 of those institutional charges. No funds have been paid toward the institutional charges when the student withdrew. In addition, the student owes $50 for a bus pass. The outstanding charges on the student's account that would be entered on the Post-Withdrawal Disbursement Tracking Sheet are $750 (the $700 in institutional charges plus the $50 owed for the bus pass). All or a portion of the $450 required under the post-withdrawal disbursement provisions may be used to satisfy this balance (assuming that the post-withdrawal disbursement is comprised of grant funds) and can be automatically credited to the student's account to pay tuition, fees, room and board. A school must obtain a student or parent's authorization to credit a student's account for charges other than current charges for tuition, fees, room and board (if the student contracts room and board with the school). (Dear Colleague Letter GEN-00-24)

Note: The Return of Title IV Funds Web site performs calculations differently for student records with a withdrawal date on or after July 1, 2006, based on provisions of the Higher Education Reconciliation Act (the HERA) of 2005, Pub. L. 109-171. For more information, click HERA.

For example, a student withdrew after completing 400 clock hours in a 900-clock hour program and before passing the midpoint in calendar time of the loan period. The loan period is the 900-clock hour academic year. The payment periods are 450 hours each. The Return of Title IV Aid calculation is done on a period of enrollment basis. The student was disbursed half of the FFEL or Direct Stafford loan and half of a Federal Pell Grant at the beginning of the first payment period and was scheduled to receive the other half in the second payment period. Because the student had not completed half of the clock hours and, for the loan, nor passed the midpoint in calendar time of the loan period, making the student eligible to receive the second installment of the loan and the Federal Pell Grant, the second disbursements were not made before the student withdrew. Under the previous guidance of Dear Colleague letter GEN-00-24, the second disbursements would not be included as aid that could have been disbursed because the institution was prohibited from making the second disbursements on or before the day the student withdrew (because the student had not completed the first payment period). Under the current guidance, the second disbursements are included as aid that could have been disbursed in the calculation of earned Title IV aid so that the amount of Title IV aid used in the calculation (and earned by the student) will be larger. Please note, however, the institution still may not make a post-withdrawal disbursement from the second scheduled disbursements because of the prohibition on making these disbursements.

For additional information, see Dear Colleague Letter GEN-04-03 posted on February 13, 2004.

Additionally, in order to include Title IV loan amounts in the Return to Title IV Funds calculation, the signed promissory notes must have been returned as provide in GEN-05-16. While the promissory notes do not have to be signed by the withdrawal date for the loan amounts to be included in the calculation, the promissory notes must be signed and returned as soon as possible, but no later than 45 days after the date of determination that the student withdrew.

What constitutes aid that could have been disbursed?

Title IV aid that could have been disbursed is grant or loan funds for which the student meets the conditions for a late disbursement. When entering the amount of loan funds, a school should enter the net amount disbursed or that could have been disbursed. The determination of which funds were disbursed versus those that could have been disbursed is made as of the date of the school's determination that the student withdrew. (See the Federal Student Aid Handbook.)

Are there any special considerations to be aware of when handling second or subsequent loan disbursements?

Yes. A student can never receive as a post-withdrawal disbursement funds from a second or subsequent FFEL or Direct Loan disbursement that the school was prohibited from making to the student on or before the date of the student's withdrawal.

However, as long as the conditions for making a late disbursement are met, a second or subsequent FFEL or Direct Loan disbursement may be counted as aid that could have been disbursed for purposes of determining earned Title IV aid regardless of whether the school was prohibited from making the disbursement on or before the day the student withdrew.

If the CPS processed a SAR or ISIR with an official expected family contribution prior to or as of the student's withdrawal date, a Direct Loan or FFEL had been originated or certified prior to or as of that date, and an initial disbursement of the loan has not been made, the amount of the post-withdrawal disbursement must be made available to the loan recipient for the initial disbursement consistent with the provisions for late disbursements in 34 CFR 668.164(a)(2) and (g). This, of course, presumes that the loan promissory note has been signed and returned. (See the Federal Student Aid Handbook and GEN-00-24)

Can a school include a loan disbursement as "aid that could have been disbursed" for first-year, first-time borrowers who withdraw before the 30th day of his or her program of study?

Yes. The R2T4 calculation must include, as "aid that could have been disbursed," the amount of the Title IV Stafford or Perkins Loan for a first-year, first-time borrower. However, the school is prohibited from including any portion of the loan disbursement as part of a post-withdrawal disbursement. (See the Federal Student Aid Handbook.)

If aid that could have been disbursed during a previous payment period (completed by the student) is received in a subsequent period during which the student withdrew, the aid is not considered Aid Disbursed or Aid That Could Have Been Disbursed in the period during which the student withdrew. This late-arriving assistance, while it can be disbursed in the current term, is disbursed for attendance in the previous term. Therefore, it is not included in the Return calculation for the period in which the student withdrew.

Note: For a student who has withdrawn, a school cannot disburse aid received for a previous semester unless the student qualifies for a late disbursement. (See the Federal Student Aid Handbook.)

Institution Required to Take Attendance

When is a school considered to be required to take attendance for R2T4 purposes?

A school would be considered to be one that is required to take attendance only when an outside entity determines that it requires that the school take attendance for some or all of its students. Absent a determination by an outside entity that the school is required to take attendance, the school would be considered to be one that is not required to take attendance.

If an outside entity determines that a school is required to take attendance for a limited continuous period of greater than a day, then the school is considered to be one that is required to take attendance only for that period of time. However, if the outside entity requires a one-day census activity, ED would not consider the school to meet the definition of an institution that is required to take attendance.

Schools that are required to continuously take attendance for a limited period must document a student's attendance through that period. If a school determines that a student was not in attendance at the end of that period, the student's withdrawal date would be determined according to the requirements for an institution that is required to take attendance. That is, the student's withdrawal date would be the last date of academic attendance as determined by the school from its attendance records.

If the school demonstrates that the student attended past the end of the limited period of continuous attendance taking, the student's withdrawal date is determined in accordance with the requirements for an institution that is not required to take attendance. For a student who has attended past the limited period of attendance taking and unofficially withdrew, the school has the option of using the midpoint of the period or the last date of attendance at an academically related activity.

If a school is required by an outside entity (for example, a state Workforce Development Agency), to take attendance for only some students, the school is required to use those attendance records for only the cohort of students under the outside agency's jurisdiction to determine the student's withdrawal date (the last date of academic attendance). The school would not be required to take attendance for any of its other students, or to use attendance records to determine any of its other students' withdrawal dates, unless the school is required to take attendance for those students by another outside entity. (See the Federal Student Aid Handbook)

Withdrawal Date vs. Institution's Date of Determination

What is the difference between the student's withdrawal date and the date of the institution's determination that the student withdrew?

A student's withdrawal date is used to determine the percentage of the payment period or period of enrollment completed and, therefore, the amount of aid a student has earned.

The date of the institution's determination that the student withdrew captures the point in time when a school could reasonably be expected to be aware that a student has withdrawn. The date of the institution's determination that the student withdrew is used in many circumstances, such as establishing the time frame for when the Return calculation must be completed and funds returned by the school. When a student begins the formal withdrawal process at an institution, the withdrawal date and the date of determination are the same date (when the student withdraws on the date they begin the formal withdrawal process at a school not required to take attendance). But the date of determination often may be at a later date than the withdrawal date, such as in the case of an unofficial withdrawal. In the case of an unofficial withdrawal, the school may not know that the student has ceased attendance until late in the period. However, the withdrawal date for a school not required to take attendance would be the midpoint or the last date of an academically related activity, which could be before or after the date of determination. (See the Federal Student Aid Handbook.)

If a student officially withdraws while on a scheduled break of five consecutive days or more, the withdrawal date is the last date of scheduled class attendance preceding the scheduled break.

For example, the school's last date of scheduled class attendance prior to spring break is Friday, March 7. Spring break at the school runs from Saturday, March 8 to Sunday, March 16. If the student contacts the school's designated office on Wednesday, March 12 to inform the school that he will not be returning from the school's spring break, the student's withdrawal date is Friday, March 7, which was the school's last day of scheduled class attendance.

However, the date of the institution's determination that the student withdrew is March 12, the date the student actually informed the school that he would not be returning. The date of the institution's determination that the student withdrew is used as the starting date for school action, such as the requirement that a school return Title IV funds for which it is responsible no later than 30 days after this date.

If a student officially withdraws while on a scheduled break of fewer than five days, the actual date of the student's notification to the school is the student's withdrawal date. Remember that a school may always choose to use a documented last date of attendance at an academically related activity as the student's withdrawal date.

Student Overpayments

Is a student required to repay a grant overpayment that is less than $25?

No. If a student owes a Title IV grant overpayment as a result of a withdrawal, the student does not have to repay the grant overpayment if the original amount that the student is responsible for repaying (after the 50% reduction) is less than $25. A school should not report a student to NSLDS, refer him or her to FSA's Student Management Collections (ED Collections), or attempt to collect on Title IV grant overpayments of less than $25.00.

Note: This provision applies only when the original overpayment amount (Step 8, line 5 or 6) is less than $25. An overpayment for which the original amount was $25 or more that has a current balance of less than $25 may not be considered de minimis and therefore written off.

This provision does not apply to funds that a school is required to return.

Yes. If a school receives a payment for an overpayment previously referred to ED Collections, and if the overpayment was made in the current award year and the payment will retire the student's debt in full, the school must: deposit the payment in its appropriate federal funds account; for a Federal Pell Grant overpayment, make the appropriate entry in the Pell system; and send a letter or fax to ED Collections identifying the student and indicating that his or her overpayment has been completely repaid. This will allow ED to properly update its records in both the ED Collections system and NSLDS.

The fax number for ED Collections is 903/408-4634. It is for school use only and only for this purpose. In the fax or letter, a school must include the award year of the overpayment, the student's Social Security Number, the student's last name, first name, and middle initial, the student's date of birth, the type of overpayment (Federal Pell Grant or FSEOG), and the disbursement date the school used to create the overpayment record to NSLDS. (See the Federal Student Aid Handbook)

If a school chooses to pay a grant overpayment on behalf of the student who withdrew and the student then decides to not repay the school, can the debt be referred to ED?

No. After the overpayment has been repaid by the school, there is no Title IV overpayment. The school may collect the amount paid by the school from the student, but the student would not owe a Title IV overpayment. (Dear Colleague Letter GEN-00-24)

If a student owed an overpayment and he or she made arrangements with the school to repay those funds, then stopped repaying after a few months, can the school still report the student to ED?

Yes. If a student enters into a repayment agreement with a school and at any time fails to fulfill the terms of that agreement, the school must immediately (within a few days) report the overpayment to NSLDS and refer the overpayment to ED. After ED receives and accepts the overpayment, the information will be transmitted to NSLDS, and "ED Region" will replace "school" as the appropriate contact for information about the overpayment.

If the Return calculation indicates that the student owes all or a portion of a federal student loan, can the school require the student to immediately repay the loan amount as an overpayment?

No. The student (or parent, if a Federal PLUS loan) returns funds to the loan programs in accordance with the terms of the promissory note. In other words, the student will repay any unearned loan funds in the same manner that he or she will be repaying earned loan funds. No further action is required other than notification to the holder of the loan of the student's withdrawal date. (34 CFR 668.22(h)(3)(i))

When is a school required to notify a student that he or she owes an overpayment, and could untimely notification affect the student's Title IV eligibility?

A student who owes an overpayment as a result of a withdrawal generally will retain his or her eligibility for Title IV funds for a maximum of 45 days from the earlier of the date the school sends the student notice of the overpayment, or the date the school was required to notify the student of the overpayment. Within 30 days of the date of determination that the student withdrew, a school must notify the student that he or she must repay the overpayment or make satisfactory repayment arrangements.

Example 1 - A school sends notification to a student within the 30 days allowed. If a school sends notification to a student within the 30 days of the date of determination, the 45-day period of extended eligibility begins on the day after the school sends the notification to the student. If a school determines on August 20 that a student withdrew and owes a repayment, and the school sends notification to the student on September 1 (within the 30 days allowed), then the first day of the 45-day period of extended eligibility is September 2. The 45th day is last day for the student to take positive action to resolve the Title IV overpayment. The last day of the student's extended eligibility for Title IV funds is October 16.

Example 2 - A school fails to notify the student or notifies the student after the 30 days allowed.

If the school fails to notify the student or notifies the student after the 30 days allowed, the 45-day period of extended eligibility begins on the day after the end of the 30 day period that the school has to notify the student. If a school determines on August 20 that a student who withdrew on July 8 owes a repayment, the school must have notified the student within 30 days of the date of determination or by September 19th. The 45-day period of the student's extended eligibility for Title IV funds ends on November 4th. If a student agrees to a repayment arrangement and then fails to meet the terms of that arrangement, his or her eligibility ends as of the date the student fails to comply with the terms of the repayment arrangement (which could be prior to the end of the 45-day period of extended eligibility). For example, if the date of determination is April 1st and the student is contacted that same date, the student's period of extended eligibility would normally end as of May 16th. However, because the student made arrangements on April 1st to fully repay the Title IV overpayment in full on April 3rd, but failed to meet that repayment obligation, the student loses his or her Title IV fund eligibility as of April 4th. (See the Federal Student Aid Handbook.)