2. “The Basics…with a Touch of Modules” Return of Title IV Funds (R2T4): 2015 NJASFAA Fall Conference Atlantic City, NJ November 12, 2015 Craig D. Rorie, Training Officer Federal Student Aid U.S. Department of Education

3. Agenda R2T4 Basics How the R2T4 Calculation Works Returning Funds Post-Withdrawal Disbursements Other Considerations Modules Resources Examples 2

4. 3 Basics - R2T4 Concept Student earns Title IV aid through attendance Percentage of aid earned is equal to the percentage of the payment period or enrollment period completed If attend one day, R2T4 applies AFTER the 60% point in a payment period or period of enrollment, a student has earned 100% of scheduled Title IV funds School’s own refund policy or other outside policies do NOT impact the amount of Title IV aid earned under R2T4 calculation

5. 4 Basics- R2T4 Premise If school has disbursed more aid than the student has earned, money is returned to the programs If school has disbursed less aid than the student has earned, a post-withdrawal disbursement will be calculated

6. 5 Basics – To R2T4 or Not to R2T4? Title IV eligible students who begin attendance and completely withdraw, or otherwise cease attending Student must have actually received Title IV loan funds or met the conditions for a late disbursement (Post-Withdrawal Disbursement) If student enrolled but never attended any classes (34 CFR 668.21) Student did not establish eligibility for any funds All Title IV aid disbursed must be returned

7. Basics - Rounding Rules for % Calculate out to 4 decimal places 45 days / 101 days =.4455 199 hours / 450 hours =.4422 Round to third decimal place. 4455 =.446 = 44.6%.4422 =.442 = 44.2% 6

8. 7 Basics - Rounding Rules for $ Amounts Round to the nearest penny $ 2,346.00 x 44.6% = $1,046.316 or $1,046.32 $2,346.00 x 44.4% = $1,041.624 or $1,041.62 Disbursement or refund may be rounded to the nearest dollar »$1,046.32 = $1,046 »$1,041.62 = $1,042

9. 8 Basics - Consumer Information School must provide to prospective and current students:  Any refund policy with which school must comply  School’s tuition refund policy  Requirements for treatment of Title IV funds after withdrawal  Procedures for official withdrawal  Office(s) accepting official withdrawal notices

10. 9 Top Ten Program Review and Audit finding … R2T4 Problems Late Returns R2T4 Errors R2T4 not done One of the highest liability producing deficiencies Basics- R2T4 & Compliance

11. 10 How the R2T4 Works – Key Concept Payment Period or Period of Enrollment Standard term-based program must use payment period (term) Nonstandard term or nonterm program may choose either payment period or period of enrollment May choose on a program-by-program basis Must be consistent with method used Title IV aid and institutional charges (generally) calculated on a payment period or period of enrollment basis

12. How the R2T4 Works – Key Concept Date School Determined Student Withdrew Official Withdrawal: Date begins official withdrawal process; or Provided official notification to designated office Unofficial withdrawal: (no notification) No later than 30 days after end of the EARLIER of: The payment period (or period of enrollment) The academic year, or The student’s educational program If required to take attendance, determine no later than 14 days after student’s Last Date of Attendance (LDA) 11 Date clock starts ticking for returns, notifications and Post Withdrawal Disbursement (PWD)

13. How the R2T4 Calculation Works Step One: The institution determines the precise amounts of Title IV aid for which a student was eligible at the time of the withdrawal, including amounts disbursed and amounts that could have been disbursed 12

14. 13 Aid That Could Have Been Disbursed To include aid, must meet conditions for a late disbursement (668.164(g)(2)) At time student withdrew - ED processed a SAR or ISIR with official EFC Perkins/FSEOG – made award Direct Loans originated However, aid listed in the “could have been disbursed” section CANNOT actually be disbursed if: 1 st time borrower withdraws before the 30 th day of the academic program (default rate waivers apply) 2 nd and subsequent disbursements UNLESS the student graduated or completed the loan period Borrower did not sign the MPN Valid ISIR requirements

15. How the R2T4 Works – Clock Hour Step Two: The institution calculates the percentage of the period that the student was scheduled to complete upon withdrawal If greater than 60%, the student earned 100% for the period Numerator: Number of hours the student was scheduled to complete Denominator: Total hours in the period 14

16. How the R2T4 Works – Credit Hour Step Two: The institution calculates the percentage of the period that was completed NOTE: If greater than 60%, the student earned 100% for the period Numerator: Number of days attended (completed) in the period Denominator: Total number of days in the period 15

17. 16 Step 2 - Calendar Days Credit-Hours Count every day, including weekends and holidays, except: Scheduled break of five or more consecutive days when no classes are offered Days of leave of absence are not included in total days If modules, count all days in modules student scheduled to attend

18. 17 STEP 2: Withdrawal Date A Always has the option of using the date of student’s last attendance at an academically related activity as documented by the school School Not Required to Take Attendance

19. STEP 2: Withdrawal Date School Not Required to Take Attendance Official Withdrawal or Unofficial Withdrawal Official Withdrawal Date student began school’s withdrawal process Date student otherwise provided “official” notice –Official notification provided to a designated school official in official capacity –In writing or orally »School must document oral notifications If both dates triggered, use the earlier date 18 Date used to determine percentage of TIV aid earned

20. STEP 2: Withdrawal Date School Not Required to Take Attendance Unofficial withdrawal Student withdraws (drops out) without notifying the school; use: Midpoint in period if student did not notify school or If student didn’t notify due to circumstances beyond student’s control, the date related to that circumstance – illness, accident, grievous personal loss, etc. 19

21.  If a student who began attendance and has not officially withdrawn fails to earn a passing grade in at least one course offered over an entire period, the institution must assume, for Title IV purposes, that the student has unofficially withdrawn  UNLESS the institution can document that the student completed the period  May develop a grading policy to assist with evaluation (F, U, FA, FW, etc…) 20 Unofficial Withdrawals - All “F” Test

22. STEP 2: Withdrawal Date School Not Required to Take Attendance Date school determines leave began (if student did not return from approved leave of absence) An approved leave of absence must meet ED’s guidelines* Schools may have a leave of absence policy different from ED’s guidelines –Students approved for leave under a policy that doesn’t meet ED’s guidelines are considered “withdrawn” and an R2T4 must be calculated at the time the leave begins 21 *Usually not applicable to term-based programs

23.  Attendance at an academically-related activity  Includes:  Physically attending class with direct interaction  Submitting academic assignment  Taking exam, interactive tutorial or computer- based instruction  Attending school assigned study group  Participating in online discussions about academic matters and/or initiating contact with faculty to ask questions about subject studied 22 Credit Hour

24.  Attendance at an academically-related activity  Does NOT include:  Living in school housing  Using school meal plan  Academic counseling or advisement  Logging into an online course without active participation  Student’s certification of attendance without school documentation is not acceptable 23 Attendance

25. 24 STEP 2: Withdrawal Date School Required to Take Attendance  IF… An institution is required to take attendance by:  An outside entity (such as an accrediting or State agency) OR the institution itself requires instructors to take attendance (ALWAYS CLOCK HOUR PROGRAMS)  Either at the program/department/institutional level  An outside entity OR the institution has a requirement that can only be met by taking attendance THEN... withdrawal date is taken from attendance records Always the last date of academic attendance

26.  If required to only take attendance for some of its’ students, the institution would use attendance records to determine withdrawal dates for those students  If required to only take attendance for a limited time period, the institution would use attendance records to determine withdrawal dates during limited time period If required to take attendance on a specific date for census reporting requirements, the institution is NOT considered to be required to take attendance If faculty choose to take attendance (but not required), then school is NOT required to take attendance 25 Required to take Attendance

27. A leave of absence (LOA) is a temporary interruption in a program of study instead of a WD Conditions for an Approved LOA: Formal written policy Student followed the formal policy in requesting the LOA There must be a reasonable expectation that the student will return from the LOA The school must approve the requested LOA in accordance with its policy The student may not be charged additional institutional charges The number of days on an approved LOA cannot exceed 180 days within a 12-month period Loan recipients must be told about the effects on their grace period if they do not return Leave of Absence 26

28. For non-term credit-hour programs – the student does not have to resume training at the same point the student began the LOA For standard term or non-standard term programs – the student must resume training at the same point the student began the LOA Leave of Absence 27

29. How the R2T4 Calculation Works Steps Three and Four: The percentage completed is multiplied by the total amount of Title IV aid for which the student was eligible If the amount earned is less than the amount disbursed, a return to the Department is required If the amount earned is greater than the amount disbursed, a PWD is required 28

30. How the R2T4 Calculation Works Step Five: If a return is required, the institution determines the amount of unearned Title IV funds that it is required to return The amount of funds due from the institution is calculated by adding all the institutional charges incurred by the withdrawal date, then multiplying that total by the percentage of the period the student did not complete 29

31. 30 Institutional Charges Charges include: Tuition and fees Room and board (if contracted with school) Course materials if no real and reasonable opportunity to purchase outside of school Charges initially assessed student for the payment period/period of enrollment Only adjusted by changes prior to withdrawal

32. How the R2T4 Calculation Works Step Six: Once the institution determines the total amount of unearned Title IV aid that must be returned to the Department, the institution must return funds in the statutory order (i.e. loans, then grants) 31

33. 32 Timeframe to Return Funds Calculation must be completed within 30 calendar days of the date of determination of withdrawal Return funds to Direct Loan program as soon as possible, but no later than 45 calendar days after the date of determination of withdrawal

34. 33 Step 8: Repayment of Student’s Loans Student is responsible to repay any loan funds not returned by the school Loans are repaid in accordance with terms of the promissory note

35. 34 Step 10: Return of Funds by Student Any grant repayment due from student is considered an overpayment Student is responsible for repayment Amounts of $50 or less in any program are set aside Grant 50% protection Law specifies order of Title IV programs to which funds must be returned

36. 35 Grant Overpayment School must notify student within 30 days of school’s determination of withdrawal Student retains Title IV eligibility for 45 days During that time, he must either: Repay in full to school Make satisfactory arrangements to repay with school (school’s option) Make satisfactory arrangements to repay with Department of Education –Student referred to ED within 45 days if not paid in full or no payment arrangements with school

37. 36 Post-Withdrawal Disbursements (PWD) When Title IV aid disbursed is less than Title IV aid earned Must meet Late Disbursement rules Sample worksheet in FSA Handbook Box J on R2T4 Worksheet

38. 37 Notification of PWD School must provide written notification within 30 days of date of determination of withdrawal Must identify type and amount of funds Amount crediting student’s account and/or direct disbursements to student/parent Must explain option to accept or decline some or all of funds Must explain obligation to repay any loan funds disbursed Must provide a deadline for response At least 14 days

39. 38 PWD - Grant Funds No student confirmation required Disbursed directly to student - as soon as possible, but no later than 45 calendar days after date of determination Disbursed as credit to account – within 180 days after date of determination

40. 39 PWD - Loan Funds Must receive confirmation from the student or parent borrower prior to disbursement Does not have to be in writing but must be documented If received after deadline, school may choose to honor a late response Direct disbursements to the student or parent must be made as soon as possible, but no later than 180 days after date of determination

41. 40 Special Circumstances Credit Balances Verification Death of a Student Inadvertent overpayments Failing to earn a passing grade Terms with modules Prorating charges Student returning within 180 days or transferring into a new program in clock hour and nonterm credit hour programs

42. Verification and R2T4 If verification not complete within timeframe to meet R2T4 deadlines, school excludes aid subject to verification from calculation If verification is then completed after R2T4 deadlines but before verification deadlines, school must recalculate R2T4 including verified amounts as aid that could have been disbursed 41

43. Hold all Title IV Credit Balances until R2T4 Credit Balance is “Aid Disbursed” Determine if Credit Balance changes because of a Refund Policy or R2T4 Use Credit Balance to repay Grant on behalf of student Release Credit Balance within 14 days 42 Title IV Credit Balances

44. R2T4 & Modules- Definition 43 668.22(l)(6) –“when a course or courses in program do not span entire length of payment period (term) or period of enrollment” Doesn’t matter what modules are called at the institution –e.g., mini-terms, J-terms, mini-mesters, mini-sessions, modules....

45. Different Modules in a 16-week Term 44 4 weeks 5 weeks 3 weeks

46. Withdrawal Defined 45 Student does not complete all days scheduled to complete within the payment period/term (whether official or unofficial withdrawal) — If no passing grade in last scheduled course/module, school must demonstrate student completed period An administrative withdrawal initiated by the school is considered an official withdrawal –A school may drop a student from a class in a future module because the student failed a prerequisite class in a prior module

47. Calendar Days - Credit Hour Modules Total calendar days include all days in which the student was scheduled to attend –Days of attendance in courses count regardless of whether module(s) were completed –Exclude scheduled breaks of at least 5 consecutive days when student is not scheduled to attend a module or other course Includes allowable breaks between modules (as long as not attending other courses during the break) When a student who has made schedule changes withdraws, do not count attendance in courses officially dropped prior to ceasing attendance 46

48. Impact of Enrollment Status Changes Adjustments to a student’s enrollment status made after a student has ceased attendance have no bearing on the R2T4 calculations — If a student enrolled in 3 modules, completes one, and then drops the remaining two after ceasing attendance, all days in all three modules will be included in the R2T4 calculation — This can apply to situations where a student drops all future modules during a break between modules 47

49. Impact of Enrollment Status Changes If a student drops all future courses on the same day they withdraw from a current module (or complete a module – last day of module), it is considered a withdrawal and all days in all modules the student was scheduled to attend must be included in the R2T4 calculation 48

50. Written Confirmation Of Return 49 Student in a modular program not considered a withdrawal if: – Provides written confirmation of intent Must be provided at the time of withdrawal Can be paper or electronic process Registration for future modules does not constitute written confirmation – Student may change return date in writing Must provide change prior to original return date

51. Written Confirmation Of Return 50 Nonstandard term and Non-term programs – Student considered to be withdrawal if not scheduled to begin another course in period of enrollment for more than 45 calendar days 45 days measured from end of module ceased attending

52. Written Confirmation Of Return 51 Student considered to be withdrawal if does not return as scheduled Withdrawal date is retroactive to when written confirmation was originally provided –Determine withdrawal date and days of attendance as if written confirmation was never provided –The date the student was scheduled to return is the date of the school’s determination of withdrawal

53. Return After Withdrawal 52 If returning in the same payment period, the student is treated as if did not cease attendance –The school must “undo” the R2T4 calculation Restore student’s original amounts with no adjustment for partial attendance of a module –Except if a student never began all of their courses Adjustments may need to be made to the original Title IV award amounts, such as Pell Grant recalculations

54. R2T4 and Pell Grant Recalculation 53 Student doesn’t begin attendance in all classes in a term — If a student does not begin attendance in all of his or her classes, resulting in a change in the student’s enrollment status, your school must recalculate the student’s award based on the lower enrollment status — If a school learns a student did not begin attendance in all courses and an R2T4 calculation is required, FIRST perform the Pell recalculation and then include the adjusted Pell amount in the R2T4 calculation The Pell recalculation is a separate and distinct process from the R2T4 calculation

55. Did the Student Withdraw? 1.Did the student cease to attend before completing, or fail to begin attending, a course scheduled to attend? If yes, go to question 2 If no, student is not a withdrawal 2.When ceased to attend or failed to begin attendance in a scheduled course, was the student attending other courses? If yes, student is not a withdrawal If no, go to question 3 3.Did the student confirm attendance in a later module in the payment/enrollment period (45 day rule, if applicable)? If no, student is a withdrawal If not a withdrawal, Pell recalculations may apply 54

56. 55

57. R2T4 References 56 FSA Handbook, Volume 5 Program Integrity Q & A website –http://www2.ed.gov/policy/highered/reg/hearulemaking/2009/integrity-qa.htmlhttp://www2.ed.gov/policy/highered/reg/hearulemaking/2009/integrity-qa.html R2T4 website available through FAA Access to CPS Online –http://www.faaaccess.ed.gov/http://www.faaaccess.ed.gov/ Dear Colleague Letter GEN-11-14 (July, 2011) 34 CFR 668.22 (R2T4); Federal Register – October 29, 2010 34 CFR 690.80 (Pell recalculation) FSA Assessments –http://www.ifap.ed.gov/qahome/qaassessments/returntivfunds.htmlhttp://www.ifap.ed.gov/qahome/qaassessments/returntivfunds.html

58. Questions? 57

59. Region II Training Officer 58 Nautochia Webb 646-428-3758 nautochia.webb@ed.gov Region II: NJ, NY, PR, Virgin Islands

60. Region III Training Team 59 Amber Johnson 202-377-3369 amber.johnson@ed.gov Craig Rorie 215-656-5916 craig.rorie@ed.gov Region III: DC, DE, MD, PA, VA, WV

61. Training Feedback To ensure quality training we ask all participants to please fill out an online session evaluation Go to http://s.zoomerang.com/s/CraigRoriehttp://s.zoomerang.com/s/CraigRorie Evaluation form is specific to Craig Rorie This feedback tool will provide a means to educate and inform areas for improvement and support an effective process for “listening” to our customers Additional feedback about training can be directed to joann.borel@ed.gov joann.borel@ed.gov 60

62. R2T4 Examples & Case Studies: 61

63. Case Study – Richard Sherman School Profile: Academic Yr. = 30 weeks and 24 credit hours Payment Period = 15 weeks Withdrawal type = Unofficial WD Period Start Date: September 1 WD date = 50% Institutionally Schedule Breaks = none Date of Determination = Dec 16th Attendance taking = Not required Method for matching FSEOG = Fund specific Period used in the Return calculation = Payment Period COA Profile:Title IV Award Profile: Tuition & Fees:$4,000/semesterPell Grant:$2,750/semester Room:$1,000/semesterFSEOG$2,000/semester Board:$1,000/semesterNet Unsub DL $1,930/semester Books & supplies$ 500/semester 62

64. Case Study – Richard Sherman Other information Richard never officially withdraws At the end of the term, the institution discovers that he failed all of his courses On Dec 16 th after faculty are consulted the office responsible for R2T4 determined that the last time Richard was at an academically-related event was Oct 10 th Payment period start date = September 1 Payment period end date = December 9 50% point = October 20 Date of Determination = December 16th 63

65. Case Study – Step 1 64

66. Case Study – Steps 2 & 3 65

67. Case Study – Steps 4 & 5 66

68. Case Study– Step 6 67

69. Case Study – Steps 7 & 8 68 xxx-xx-xxxx

70. Case Study – Steps 9 & 10 69

71. Summer Module Example 70 Fall and Spring: standard terms All courses last for full 15 weeks and are not considered to be offered in modules Summer: three 5-week sessions (combined to be a standard term offered in modules) Students can enroll in any one, two or all three summer sessions Students in the 5-week summer sessions are considered enrolled in a program offered in modules since none of the sessions span the entire length of the 15-week term

72. Summer Module Example Session 1 5 weeks Session 2 5 weeks Session 3 5 weeks 33 days Student enrolls in all three summer sessions. Completes session 1, begins session 2, and stops attending on day 10. No notification of withdrawal provided, or confirmation of return. R2T4 calculation required, after recalculating Pell Grant Withdrawal date: day 10 of session 2 (if required to take attendance); 50% point of enrollment period or last known date of attendance (if not required to take attendance) Number of days in period = 103 days 2 days 71

73. R2T4 Studies University (RSU) Scenario 72 Module 1 33 days Module 2 33 days 15-week Full Term 103 days. 9/06 –10/08 10/11 – 11/12 11/15 – 12/17 9/06 – 12/17 Module 3 33 days Standard Term Semester Calendar Term is 15 weeks, 103 days Courses also offered in 5-week, 33-day modules 2 days

74. RSU Example 1 73 2 days 9/06 attends 6 credits in Full Term; enrolled in Modules 2 and 3 9/28 withdraws from 3 credits in Full Term 11/12 withdraws from 3 credits in Full Term 10/11 begins 3 credits, Module 2 11/12 completes 3 credits, Module 2 11/12 withdraws from 3 credits, Module 3 15-week Full Term (9/06 – 12/17): 103 days Module 1 33 days Module 2 33 days 9/06 –10/08 10/11 – 11/12 11/15 – 12/17 Module 3 33 days

75. RSU Example 1 74 Enrollment ends 11/12 with completed course and official withdrawal Was to attend until 12/17 Pell recalculation as necessary (module 3) R2T4 required Withdrawal date is 11/12, 68 days Enrollment period is 9/06 – 12/17, 103 days 68/103 =.6602 = 66.0%

76. RSU Example 2 75 9/06 attends 6 credits in Full Term; enrolled in Modules 1 and 3 9/22 withdraws from 3 credits in Full Term 12/17 completes 3 credits in Full Term 09/06-10/08 begins attendance in and completes 3 credits, Module 1 11/15 begins 3 credits, Module 3, and withdraws 12/07 15-week Full Term 103 days 2 days Module 1 33 days Module 2 33 days Module 3 33 days 9/06 –10/08 10/11 – 11/12 11/15 – 12/17 15-week Full Term (9/06 – 12/17): 103 days

77. RSU Example 2 76 Enrollment ends 12/17 with completed Full Term course No R2T4 required

78. RSU Example 3 77 9/06 attends 6 credits in Full Term; enrolled in Mod 1 9/14 withdraws 6 credits in Full Term 9/06 begins attendance in 3 credits, Module 1 9/24 withdraws from 3 credits, Module 1 15-week Full Term 103 days 2 days Module 1 33 days Module 2 33 days Module 3 33 days 9/06 –10/08 10/11 – 11/1211/15 – 12/17 15-week Full Term (9/06 – 12/17): 103 days

79. RSU Example 3 78 Enrollment ends 9/24 with official withdrawal Scheduled to attend until 10/08 R2T4 required Withdrawal date is 09/24, 19 days Enrollment period is 9/06 –10/08, 33 days 19/33 =.5757 = 57.6%

80. RSU Example 4: Roommates 79 9/06 begin attendance and complete 6 credits, Module 1 10/01 Zack withdraws, Module 2 10/11 Dave withdraws, Module 2 Not enrolled in Full Term; enrolled in Modules 1 and 2 Neither student attends Module 2 15-week Full Term 103 days 2 days Module 1 33 days Module 2 33 days Module 3 33 days 9/06 –10/0810/11 – 11/12 11/15 – 12/17 15-week Full Term (9/06 – 12/17): 103 days

81. RSU Example 4: Roommates 80 Zack No R2T4 required -- dropped Module 2 course before ceasing attendance in Module 1 Pell recalculation required if paid for Module 2 Dave R2T4 required since withdrew after ceasing attendance Withdrawal date is 10/11, 36 days Enrollment period is 9/06 – 11/12, 68 days Pell Recalculation if paid for Module 2