Return of Title IV Funds
Return of Title IV Funds (R2T4)
Students who have received (or who are eligible to receive) federal financial aid and who withdraw from all their classes prior to the 60% point in time of the semester, are subject to a recalculation of their awards based on the amount of aid earned.
The amount of aid earned is determined by the number of days the student enrolled prior to withdrawing from classes. Any financial aid the student received in excess of the earned amount must be repaid to the college. The college will return the fund to the appropriate source.
The student is required to pay the college any unearned aid they have received. The FAO will email the student a notification of change in eligibility. HCC will return all funds required by the school and those funds to be returned on behalf of the student.
The college will retain all tuition and fee charges if the student withdraws after the refund period. The college will adjust tuition and fee charges if the student withdraws during the refund period.
As a result of the required Return of Title IV Refund Calculation, there may be instances where students must decide if they want anticipated earned aid to be applied to their account. In such instances, the FAO will send a letter to the student. Students must reply to the FAO in writing by ten days to benefit from a post-withdrawal disbursement.
PRIORITY ORDER OF FUNDS ADVANCED
Funds to students will be advanced in the following order:
- HCC Employee/Dependent Tuition Waiver
- Third Party Billing
- Montgomery GI Bill/ Reserve Educational Assistance Program
- Alumni Discount
- Tuition Exchange
- Non-institutional Grants/Scholarships/Sponsorships (private)
- College non-need-based scholarships (merit)
- College non-need-based scholarships (departmental)
- Federal Scholarships
- State Scholarships
- Federal Pell Grant
- Federal Supplemental Opportunity Grant (FSEOG)
- Institutional Need-based Grants/Awards
- Federal Subsidized Stafford Loan
- Federal Unsubsidized Stafford Loan
- Federal PLUS Loan
- Alternative Loan (only at the request of the student)
- Federal Work-study or Texas Work-study
TYPES OF WITHDRAWALS
Never Attended – Financial aid is available to eligible students who enroll at HCC for the period for which the aid is awarded. Students who never attend classes after registering for a specific term are not eligible for financial aid for the term. During HCC’s refund period, students who never attend classes and are reported by the faculty as never attending will have their tuition, fees, and financial aid adjusted according to the refund policy. For financial aid purposes, students who never attend classes and are reported by the faculty as never attended are not eligible to receive scholarships or financial aid. The awarded financial aid or scholarships will be canceled for the term of non-attendance.
Official Withdrawals – Financial aid is available to eligible students who enroll at HCC for a specific period and for a specific number of courses. Financial aid will be calculated based upon the initial enrollment and will be adjusted to reflect a student’s adjustment to his/her schedule throughout the semester to reflect late start courses and non-attended courses. Students who drop or officially withdraw from all courses of an enrollment period will have their Title IV eligibility recalculated based on the date of withdrawal. The financial aid office will utilize the dates listed on PeopleSoft Customer Accounts to determine the dates of last academic activity when other college records of attendance are inaccessible.
Administrative Withdrawal (stopped attending) – Financial aid is available to eligible students who enroll at HCC for a specific period and for a specific number of courses. Students who stop attending class(es), as reported by faculty, may have financial aid adjusted to reflect the student’s last date of class or academically-related activity. Students who are reported by faculty as having stopped attending classes will have their financial aid adjusted. The college will retain the full tuition and fees of students who stop attending classes after the refund period. The date of the administrative withdrawal will be the last date attended as indicated by the faculty member. This procedure parallels the manner in which the college adjusts the aid of students who officially withdraw from classes. Students who are reported by faculty as having stopped attending classes after the college’s refund period will receive a ‘W’ grade for the class(es). Students who are reported by a faculty member with a grade of “FX” (stopped attending) but do not have a reported last date of attendance will be calculated using the 50% point of the semester. The college will retain full tuition and fees of these students.
If an instructor is unable to determine the last time a student attended the class, the date of the student’s last academically-related activity can be used. Examples of an academically-related activity include physically attending a class with direct interaction between the instructor and student; submitting an academic assignment; taking an exam’ interactive tutorial or computer-assisted instruction; attending study group assigned by the institution; participating in an online academic discussion; or initiating contact with a faculty member to ask question about the subject.
ORDER FOR RETURN OF FUNDS
Funds returned as a result of R2T4 will be refunded in the following order:
- Federal Unsubsidized Stafford Loan
• Federal Subsidized Stafford Loan
- Federal PLUS Loan
• Federal Pell Grant
- Iraq and Afghanistan Service Grant
- Federal Supplemental Opportunity Grant (FSEOG)
- TEACH Grant
Mary Johnson is receiving Title IV grants and loans for the fall semester. The start date is January 8 and end date is May 4. There is 7 days for scheduled spring break – no classes.
- Tuition and Fees = $1,000
- Pell Grant disbursed = $1400
- FSEOG disbursed = $1200
Mary withdrew from all classes on January 18. Mary attending a total of 11 days during a period of 110 calendar days, calculated at 10% of the semester. Because this percent is 60% or less, the Percentage of Title IV aid earned is 10%. Unearned is 90%.
- Mary was disbursed $2600 and earned 10% or $260.
- Mary’s tuition and fees is $1000.
- The amount of unearned charges is $900 (1000 x 90%). This amount is due from the school.
- Unearned aid is $2340 (2600 – 260).
Amount of unearned aid due from the student is $2340 - $900 = $1440. Part of this return is protected from return of Title IV, or 50% of the total grants or $1300. Student is responsible for returning the difference of $1440 - $1300 = $140.
The school will return the $900 and the $140 (on behalf of the student).
The school will reduce the Pell Grant by $1040, leaving the student with a Pell award of $360. The student will be billed for the $1040.
RETURN FROM MODULES WITHIN A SEMESTER
If a course does not span the entire payment period. If the student ceases attendance before the period for which aid was awarded, it is a withdrawal. For courses offered in modules, a student is not considered to have withdrawal if the institution obtains written confirmation that the student will return to complete a later module within the same payment period. If some courses in the program for a particular payment period span the entire length of the period but some do not, the program is considered to be offered in modules only for those students who are scheduled to attend at least one course that does not span the entire length of the period, and withdraw during the period. An institution is required to "undo" the R2T4 calculation if a student who has withdrawn returns to the institution within the same payment period or period of enrollment for a term-based credit hour program offered in modules.
In a program offered in modules, a student is not considered to have withdrawn if the student successfully completes a combination of modules that, when combined, include 49 percent or more of the number of days in the payment period, excluding scheduled breaks of five or more consecutive days and all days between modules. Which modules a student successfully completes, and in what order the modules are completed, does not impact an institution’s determination of whether the student qualifies for a withdrawal exemption.
To determine the denominator of the calculation for whether a student has successfully completed at least 49 percent of a payment period or period of enrollment, an institution performs three steps. The institution—
- Adds all the days between the start and end date of the regular term (or all the terms in the period of enrollment);
- Subtracts any scheduled breaks of five consecutive days or more that apply to all students who enroll in the term; and
- Subtracts all days between modules.
The number of days in the term for purposes of the withdrawal exemption will be the same for all students who enrolled in that term. It does not vary with an individual’s enrollment. Only the numerator of the withdrawal exemption calculation – the number of days in modules that the student successfully completed – may differ for each student.
LATE DISBURSEMENT AND POST-WITHDRAWAL DISBURSEMENT
When a withdrawn student has been disbursed federal student aid that is lower than the amount earned based on the R2T4 calculation, school must disburse or offer a disbursement of the earned aid that was not received. This is called a post-withdrawal disbursement (PWD).
All students who withdraw prior to the end of the payment period should have their records reviewed to determine if the student is eligible for a PWD.
If a student attends beyond the 60% point of the payment period, all federal student aid awarded for the payment period is considered as “earned” aid and FSA funds remain fully disbursed. If any FSA awards were not paid before the student withdrew, it is possible that some undisbursed aid that was earned would show up as a PWD calculation.
The school is responsible for ensuring that all potential PWD amounts are accurately calculated, grants disbursed, and PWD loan offers are communicated to the student.
STUDENT LOANS AID DISBURSED OR COULD HAVE BEEN DISBURSED
Loans repayment begins after a student completes his/her educational program or once he/she is no longer enrolled at least half-time, whichever occurs first. The Federal Direct Student Loans (Subsidized and Unsubsidized) and the Federal Parent Loan for Undergraduate Students (PLUS) or student loan programs offered by HCC.
Students will receive their loan disbursement 30 calendar days after attendance is verified for 6 or more credits. Students registered for classes with different start dates will affect how long it takes to verify attendance for 6-credit-hour requirement. For example, if you are taking 6 credit hours with one regular term class and one second start class, your loans will not disburse until attendance is verified for the second start class.
Loan requirements must be completed before loans can disburse and refund.
- Accept the loan(s)
- Be enrolled and attending 6 or more credit hours
- Complete the online Entrance Loan Counseling and Master Promissory Note (MPN)
R2T4 EXEMPTIONS AND WAIVERS DUE TO COVID-19
Return or Title IV (R2T4) Exemptions and Waivers are applicable for any student who begins attendance in a payment period that includes March 13, 2020, or begins between March 13 and the last date that the national emergency is in effect, and subsequently withdraws from the period as a result of COVID-19-related circumstances. For institutions basing R2T4 calculations on a period of enrollment, the waiver may apply to a student who begins attendance in a payment period that includes the last date that the national emergency is in effect and withdraws after the conclusion of that payment period but within the applicable period of enrollment.
Institutions must add the Coronavirus Indicator to disbursements qualifying for CARES Act relief by the following deadlines:
- For disbursements from award years prior to 2020–2021, no later than December 31, 2020
- For disbursements from the 2020– 2021 award year, no later than September 30, 2021 Institutions must report amounts not returned under R2T4 requirements due to CARES Act relief no later than September 30, 2021.
Section 3508 of the CARES Act directs the Secretary to waive the statutory requirement for institutions to return Title IV funds as the result of student withdrawals related to a qualifying emergency. For any student who begins attendance in a payment period or period of enrollment that includes March 13, 2020, or begins between March 13 and the later of December 31 or the last date that the national emergency is in effect, and subsequently withdraws from the period as a result of COVID-19-related circumstances, an institution is not required to return Title IV funds.
This includes students who withdrew during the applicable period for whom the institution has already performed an R2T4 calculation and returned funds. Where returns have already been made, the institution should re-disburse Title IV funds to those students, making required adjustments in COD, crediting students’ ledger accounts, and requesting any necessary funds from G5. In the case of withdrawn students for whom no returns have been made, the institution should:
- Perform an R2T4 calculation in order to determine the amount of Title IV funds that would otherwise have to be returned;
· Make no adjustments to COD as a result of the withdrawal;
- Make no adjustments (as the result of the withdrawal) to the amount of Title IV aid credited to the student’s ledger account.
If an affected student withdraws prior to some or all her Title IV aid having been disbursed (a situation that would normally result in a post-withdrawal disbursement), the institution should proceed with making any remaining disbursements for the payment period, and then follow steps one through three above. To determine whether a student has withdrawn from a payment period or period of enrollment, please refer to 34 CFR 668.22.
The CARES Act also directs the Secretary to waive student grant overpayments that result from the R2T4 process for students who withdraw as a result of COVID-19-related circumstances. If a student’s grant overpayment has been waived in accordance with this provision, an institution is not required to notify the student or the National Student Loan Data System (NSLDS) of the overpayment or refer any portion of the overpayment to the Department. In addition, an institution must not apply any Title IV credit balance to pay down the grant overpayment. An institution must document in the student’s file when it applies this waiver as a result of the CARES Act. If an institution has already returned the amount of a student overpayment on behalf of a student, it should re-request those funds in the same manner as described above for Title IV funds that the institution was otherwise required to return under normal R2T4 requirements.