5HWXUQRI7LWOH,9)XQGV &RPPRQ4XHVWLRQVDQG … · NASFAA’s Webinar Series Return of Title IV Funds:...

Return of Title IV Funds: Common Questions and Common Audit Findings

April 12, 2017

© 2010–2017 by National Association of Student Financial Aid Administrators (NASFAA). All rights reserved. NASFAA has prepared this document for use only by personnel, licensees, and members. The information contained herein is protected by copyright. No part of this document may be reproduced, translated, or transmitted in any form or by any means, electronically or mechanically, without prior written permission from NASFAA. NASFAA SHALL NOT BE LIABLE FOR TECHNICAL OR EDITORIAL ERRORS OR OMISSIONS CONTAINED HEREIN; NOR FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES RESULTING FROM THE FURNISHING, PERFORMANCE, OR USE OF THIS MATERIAL. This publication contains material related to the federal student aid programs under Title IV of the Higher Education Act and/or Title VII or Title VIII of the Public Health Service Act. While we believe that the information contained herein is accurate and factual, this publication has not been reviewed or approved by the U.S. Department of Education, the Department of Health and Human Services, or the Department of the Interior. The Free Application for Federal Student Aid (FAFSA®) is a registered trademark of the U.S. Department of Education. NASFAA reserves the right to revise this document and/or change product features or specifications without advance notice. April 2017

© 2017 NASFAA i Return of Title IV Funds Webinar 4/12/2017

NASFAA Webinar Return of Title IV Funds: Common Questions and Common Audit Findings

Table of Contents

Slides .................................................................................................................................................................... 1

Determining Whether a Student Has Withdrawn from a Program Offered in Modules ....................................... 27

Return of Title IV Funds: Formula Overview ....................................................................................................... 29

AskRegs Knowledgebase Q & A ........................................................................................................................ 31

Return of Title IV Funds Webinar 4/12/2017 ii © 2017 NASFAA

This page intentionally left blank.

NASFAA’s Webinar SeriesReturn of Title IV Funds:

Common Questions and Common Audit FindingsPresented April 12, 2017

National Association of Student Financial Aid Administrators

NASFAA’s 2016–17 Webinar Series

Return of Title IV Funds:Common Questions and Common Audit Findings

April 12, 2017

Slide 1 © 2017 NASFAA

Introduction: NASFAA Staff


Debra La GroneCompliance Products Specialist

Eunice PowellRegulatory Specialist

NASFAA Training and Regulatory Assistance

Handouts

For today’s handouts, clickHandouts button

at the bottom of your screenor

visit Webinar Event Lobby


© 2017 NASFAA 1 Return of Title IV Funds Webinar 4/12/2017



Technical Assistance

For technical assistance, clickHelp button at the bottom of

your screen to view FAQsor contact

[email protected]


Technical Assistance: Sound

REMINDER!Turn the Speaker Volume UP

Please adjust the volume on your personal computer in order to better

hear the presentation.


Questions and Answers

Submit your questions

throughout the broadcast!


Return of Title IV Funds Webinar 4/12/2017 2 © 2017 NASFAA



Goals

• Provide a brief overview of the Return ofTitle IV Funds

• Review the most common audit findings bythe Department of Education

• Review frequently asked Return of Title IVquestions by the NASFAA membership


Overview of Return of Title IV Funds


Introduction: Return of Title IV Funds

• What is Return of Title IV?– The process of reviewing

how to handle Title IVfunds when the studentwithdraws from school orceases attendance beforecompleting the paymentperiod or period ofenrollment





Key Concepts of Return of Title IV Funds

• Withdrawal– When a student ceases

attendance in all classesduring a payment period orperiod of enrollment

• Title IV recipient– Student who has received a

Title IV grant or loan; or– Student who meets the

requirement to receive a latedisbursement


General Principles Regarding Withdrawals

• A partial withdrawal does not necessitate aR2T4 calculation

• Students must establish eligibility for Title IVaid in order for the R2T4 requirements toapply

• Different rules apply for determining when astudent is considered to have withdrawndepending on whether the student isenrolled in a program offered in modules


Withdrawals From a Program Not Offered in Modules


Credit-Hour Program

• Student does not completeall days scheduled to complete in the payment period or period of enrollment

Clock-Hour Program

• Student does not complete all of the clock hours and weeks of instructional time scheduled to complete in the payment period or period of enrollment

Nonterm or Nonstandard-Term

Programs Offered in Credit or Clock Hours

• Student is not scheduled to begin another course within payment period or period of enrollment for more than 45 calendar days after end of module student ceased attending

• Exception for student on a Title IV leave of absence




After beginning attendance in the payment period or period of

enrollment, did the student cease to attend or fail to begin

attendance in a course he or she was scheduled to attend?




Withdrawals From a Program Offered in Modules








When the student ceased to attend or failed to begin

attendance in a course he or she was scheduled to attend, was the student still attending any

other courses?



other courses?

YES











other courses?



other courses?



other courses?



other courses?

YES

NO













attendance in a course he or she was scheduled to attend,

was the student still attending any other courses?










This is a withdrawal and return of Title IV funds

requirements apply

This is a withdrawal and return of Title IV funds

requirements apply

YES

NO

NO




• Schools are expected to begin the returnof Title IV funds process immediatelyupon its determination that a student haswithdrawn in order to perform requiredactions in a timely manner

• Schools may not delay the return of TitleIV funds process in case a student mightreturn


General Principles: Withdrawal Date

• Different rules applyfor determining thewithdrawal datedepending uponwhether or not schoolis required to takeattendance





Required to Take Attendance• A school is required to take attendance if:

– Requirement imposed by outside entity– Voluntarily takes attendance– Required by the program

• Includes taking attendance for:– A limited period of time– Certain populations


Required to Take Attendance• For a school that is required to take attendance,

withdrawal date is the last date of student’sattendance in an academically-related activity, asdocumented by school’s attendance records– Regulations do not specify the type(s) of attendance

records school must keep, nor the procedure forroutinely monitoring those academic records todetermine when a student withdraws

• School must determine which:– Institutional records most accurately support its

determination of student’s withdrawal date; and– Date to use if there is conflicting information regarding

student’s last date of academic attendance


Not Required to Take Attendance• Withdrawal date depends on whether the

student is an:– Official withdrawal– Unofficial withdrawal





Determining the Withdrawal Date• Regardless of whether a school is required

to take attendance, when a studentwithdraws, the school must:– Establish student’s withdrawal date according

to return of Title IV funds regulatoryrequirements;

– Document date it determined the studentwithdrew; and

– Maintain documentation of student’swithdrawal and school’s determination studentwithdrew


Determining the Withdrawal Date• Academic attendance and academically-related

activity includes, but is not limited to:– Physically attending a class where there is an

opportunity for direct interaction between instructorand students;

– Submitting academic assignment;– Taking an exam, interactive tutorial, or computer-

assisted instruction;– Attending study group assigned by school;– Participating in online discussion about academic

matters; and– Initiating contact with faculty member to ask a

question about subject studied in course


Determining the Withdrawal Date• Academic attendance and academically-

related activity does not include activitieswhere a student may be present, but notacademically engaged, such as:– Living in institutional housing;– Participating in school’s meal plan;– Participating in student-organized study group;– Logging into online class without active

participation; or– Participating in academic counseling or

advising.





Not Required to Take Attendance• Official withdrawals

– Withdrawal date is date student began school’sofficial withdrawal process or officially notifiedschool of his or her intent to withdraw

• “Officially notifies” means student contactsan office designated by school for thispurpose– An institution must designate at least one

campus office for this purpose (e.g., registrar’s,dean’s, financial aid office, or any combination ofthese offices)


Not Required to Take Attendance• Official withdrawals

– Student’s official notification can be written ororal

• If student both begins official withdrawalprocess and notifies school, but on differentdates, withdrawal date is earlier date thestudent:– First notified school of his or her intention to

withdraw; or– Actually began withdrawal process


Unofficial Withdrawals• Occurs when a student drops out without

notifying the school• Schools may choose:

– Midpoint of the payment period– Last date of attendance in an academically

related activity that is earlier• Time frame for determination





Unofficial Withdrawals: Failure to Earn Passing Grade• A school must treat a student as having

unofficially withdrawn if:– Student fails to earn passing grade in any

course in payment period or period ofenrollment; and

– School cannot document student actuallycompleted requirements for at least onecourse in payment period


Other Types of Withdrawals• Administrative Withdrawals

– If a school administratively withdraws (e.g., expels,suspends, or cancels the student’s registration) astudent, the last possible withdrawal date theschool may use for return of Title IV funds purposesis the date the school terminated the student’senrollment

• Leave of Absence– Leave of absence or LOA is a temporary

interruption in a student’s studies when student isnot in attendance during a period for whichacademic attendance is a scheduled part ofstudent’s program


Overview: Return of Title IV Formula






Return of Title IV Funds Formula


• Determine percentage of aidearned by Title IV recipient bycalculating percentage of theperiod student completed– The percentage of the period

completed determinespercentage of aid earned


step1


• Determine the amount of aidearned by applying percentagecompleted to the total Title IV aidthat was or could have beendisbursed to student


Total aid x %

completed = Earnedaid

step2





R2T4 When Disbursed Aid Exceeds Earned Aid



• Determine the amount ofunearned aid by subtractingearned aid from disbursed aid

– Unearned Title IV funds must bereturned to the Title IV programs


step3


• Distribute responsibilities forreturning unearned aid between the school and the student

• Return of Title IV funds formula isdesigned so:– All of unearned funds are returned

by the school if student’s institutionalcharges equal or exceed amount ofTitle IV funds disbursed; or

– School and student each return ashare of funds if the amount of TitleIV funds disbursed exceedsstudent’s institutional charges


step4





Allocate unearned funds to the Title IV programs from which student received assistance in the following order:• Direct Unsubsidized Loan• Direct Subsidized Loan• Federal Perkins Loan• Direct PLUS• Federal Pell Grant• FSEOG• TEACH Grant; and then• IASG

step5

Allocate Unearned Aid


R2T4When Earned Aid Exceeds

Disbursed Aid


Title IV Funds Formula: Earned Aid Exceeds Disbursed Aid

• Determine the Amount of thePost-Withdrawal Disbursement– Amount of the post-withdrawal

disbursement is the differencebetween the amount of Title IVfunds disbursed and the amountearned


step3





• Crediting student account– May credit grant funds– May not credit loan funds without

borrower confirmation• Requirements

– Disbursement notification– Authorization requirements– Other cash management

restrictions


step4


Offer Any Portion Not Credited to Institutional Charges• If no outstanding school balance, or

post-withdrawal disbursement is greaterthan school balance, school must:– Directly deliver any grant portion of a

post-withdrawal disbursement to thestudent; and

– Send, within 30 days of the date ofschool’s determination student withdrew,written notification to student or parentPLUS borrower: Offering to make post-withdrawal

disbursement of the loan funds, and Requesting borrower confirm he or she still

wants loan proceedsSlide 41 © 2017 NASFAA

step5

ED Audit andProgram Review Findings





R2T4 Funds Made Late• Returns not made within 45-day allowable

timeframe• Inadequate system in place to identify/track

official and unofficial withdrawals• School’s policy and procedures not followed• No system in place to track number of days

remaining to return funds

Regulations: 34 CFR 668.22(j) and 668.173(b)


R2T4 Calculation Errors• Institutional charges incorrect• Actual clock-hours used instead of scheduled hours• Incorrect number of days used in term/payment

period• Incorrect withdrawal date• Incorrect aid used as “could have been disbursed”

Regulation: 34 CFR 668.22(e) and (f)


Repeat Finding –Failure to Take Corrective Action• Failure to implement Corrective Action Plan

(CAP)• CAP did not remedy the instances of

noncompliance• Ineffective CAP used from previous year(s)• Internal controls not sufficient to ensure

compliance with FSA guidelines

Regulations: 34 CFR 668.16 and 668.174(a)





AskRegs Knowledgebase Questions and Answers


Question #1

Is a return of Title IV funds calculation necessary when student withdraws from one class?A graduate student enrolled in two classes and drops one halfway through the quarter. She is currently less than half time. She completed half of the second class, so we charged her half of the tuition for the dropped class.


Poll #1

• Is a R2T4 calculation necessary when astudent withdraws from one class?– Yes– No





Question #2

Is a return calculation required if a student completely withdraws during an add/drop period and we refund all charges?A student attends classes during our six-day add/drop period and does a complete withdrawal prior to the end of the add/drop period.

Under our institutional refund policy, we cancel the student’s registration and refund 100% of tuition and fees if a student withdraws before the end of the add/drop period.


Poll #2

• Is an R2T4 calculation required in thissituation?– Yes– No


Question #3

Do we need to perform a return calculation if aid was not disbursed before a student withdrew?We have a student who dropped all her classes before her federal aid was disbursed due to a previous term debt hold. She did have a valid Institutional Student Information Record (ISIR), and she had a Federal Pell Grant and Federal Supplemental Educational Opportunity Grant (FSEOG) award.





Poll #3

• Do we need to perform an R2T4calculation if aid was not disbursedbefore a student withdrew?– Yes– No


Question #4

Can we wait until the next module begins to process a return of Title IV funds calculation?The university has a program with standard terms, containing five nine-day modules within a quarter term. We require our faculty to take attendance, but only within each module. The attendance tracking is in faculty grade books, and we are notified within 14 days of the student's last day of attendance. Faculty can withdraw a student from a module after two absences within the module. During terms with modules, the student is only enrolled in the module; there are no umbrella courses spanning the entire term.


Poll #4

• Can we wait until the next module beginsto process an R2T4 calculation?– Yes– No





Question #5

When counting the days a student attended in the semester, do you count the day a scheduled break begins?


Poll #5

• We are unsure how to calculate ourSpring break period for Return of Title IV.Should we include the days during thebreak or exclude them?– Yes– No– It depends


Question #6If a student must return loan funds as a result of a return calculation, must the funds be repaid immediately? The R2T4 calculation states that an institution’s return for a Direct Unsubsidized Loan is $2,166.00 and the student’s return for a Direct Unsubsidized Loan is $1,182.25. Does this mean that the student is required to immediately repay the $1,182.25? I understand that the institution’s portion is required to be returned within the 45-day timeframe; however, I am unclear what the student’s return means.





Poll #6

• If a student must return loan funds as aresult of a return calculation, must thefunds be repaid immediately?– Yes– No


Question #7

I have heard that an institution can use, for institutional charges, the amount calculated in the student’s cost of attendance for tuition and fees, books and supplies, and room and board. Is this correct?


Poll #7

• I have heard that an institution can use,for institutional charges, the amountcalculated in the student’s cost ofattendance for tuition and fees, books andsupplies, and room and board. Is thiscorrect?– Yes– No





Question# 8

Do we adjust the institutional charges for a return calculation if we recalculated a student’s Pell prior to him or her withdrawing?


Poll #8

• Do we adjust the institutional charges fora return calculation if we recalculated astudent’s Pell prior to him or herwithdrawing?– Yes– No


Question #9Do post-withdrawal disbursement and late disbursement rules apply when correcting an R2T4 calculation error?An R2T4 calculation was performed and the funds were returned. Later we realized there was an error in the R2T4 calculation, so we corrected the calculation. The loan funds that we originally returned included a larger amount of graduate PLUS than on the corrected calculation. For example, in the initial (incorrect) calculation the school was required to return $1,955.00 in Direct Unsubsidized Loan and $5,028.90 in PLUS funds. In the corrected calculation, the school is only required to return $1,955.00 in Direct Unsubsidized Loan and $629.95 in PLUS funds. This means we now owe the student $4,398.95.





Poll #9

• Do post-withdrawal disbursement and latedisbursement rules apply whencorrecting an R2T4 calculation error?– Yes– No– It depends


Question #10

What is the timeframe for completing an R2T4 calculation for students who withdraw without providing notice?


Poll #10

• What is the timeframe for completing anR2T4 calculation for students whowithdraw without providing notice?– 30 days after the end of the payment or enrollment

period– 45 days after the end of the payment or enrollment

period– 30 days after the day the student unofficially

withdrew– I’m not sure





Question and Answer Segment

Your questions, please!


Survey!

• Please complete the survey thatappears on your screen

• The survey will automatically launchafter the webcast ends


NASFAA’s Webinar Series

Cash Management:Moving Beyond the Tiers

May 10, 2017





NASFAA’s Webinar Series

Using NASFAA Tools:Standards of Excellence Review

ProgramMay 17, 2017


2016 – 17 Course Schedule

Overview of the Financial Aid Programs – 9/12/16

Student Eligibility – 10/3/16

Cash Management – 10/18/16

Verification – 11/17/16

Return of Title IV Funds – 1/30/17

Consumer Information – 2/27/17

Gainful Employment – 3/27/17

Professional Judgment – 4/25/17

Overview of the Financial Aid Programs – 7/10/17






Thank you for joining us!




Determining Whether or Not a Student Has Withdrawn From a Program

Offered in Modules

After beginning attendance, did the student stop attending or fail to begin attendance in a course

he or she was scheduled to attend?

Student has not withdrawn. No action required.

When the student stopped attending or failed to begin attendance in a scheduled course, was he or she still attending any

other courses?

Student has had a change in enrollment status. Recalculate aid

per applicable program regulations and school policies.

Did the student confirm attendance in writing in a course in a module

later in the payment period or period of enrollment?

Student has withdrawn. Perform return of Title IV funds calculation.

Student has not withdrawn. No return of Title IV funds calculation required unless student fails to begin attendance in later

module. It may be necessary to recalculate aid per applicable program regulations and

school policies.

No

Yes

Yes

No

YesNo


Return of Title IV Funds: Formula Overview

• Key concepts related to the return of Title IV funds formula: Earned aid: The amount of Title IV aid a student is entitled to based upon the payment period or period

of enrollment completed as of the date the student withdrew. Earned aid may be either disbursed or undisbursed.

Unearned aid: If the amount of Title IV aid earned is less than the amount disbursed as of the date the student withdrew, the difference is the amount of unearned aid that must be returned to the Title IV programs by the school, the student, or both.

Post-withdrawal disbursement: If the amount of Title IV funds earned by a student is more than the amount disbursed as of the date of withdrawal, the school must disburse, or offer to disburse, the difference in a post-withdrawal disbursement.

Step 1 Determine the percentage of the period the student completed. Step 2 Determine the amount of earned aid by applying the percentage completed to the total Title IV

aid that was or could have been disbursed to the student.

DISBURSED AID EXCEEDS EARNED AID: EARNED AID EXCEEDS DISBURSED AID: Step 3 Determine the amount of unearned

aid by subtracting earned aid from disbursed aid.

Step 3 Determine the amount of the post-withdrawal disbursement by subtracting disbursed aid from earned aid.

Step 4 Distribute responsibilities for

returning unearned aid between the school and student.

Step 4 Credit any grant portion and offer to credit any loan portion of a post-withdrawal disbursement toward unpaid allowable and authorized institutional charges.

Step 5 Allocate unearned aid back to the

Title IV programs.

Step 5 Pay the student any grant portion and offer the student borrower or parent PLUS borrower any portion of a post-withdrawal disbursement not credited toward unpaid allowable and authorized institutional charges.


AskRegs Knowledgebase Q & A Return of Title IV Funds:

Common Questions and Audit Findings The following are questions and answers to the AskRegs questions presented during the webinar.

Question Answer 1. Is a return of Title IV funds calculation

necessary when student withdraws from one class? A graduate student enrolled in two classes and drops one halfway through the quarter. She is currently less than half time. She completed half of the second class, so we charged her half of the tuition for the dropped class.

No. Assuming that both courses span the entire quarter, the student is still considered to be enrolled, and a return of Title IV funds (R2T4) calculation is not necessary. If the student met all the Title IV eligibility requirements and was enrolled at least half time at the time of disbursement, you don’t have to adjust the student’s aid or return any funds unless you have a Federal Pell Grant census date which comes after the student dropped the second course. If you have a census date and you adjust for the change in enrollment status, you must also adjust the student’s cost of attendance (COA) accordingly. Reference: The 2016–17 FSA Handbook, page 3-67

2. Is a return calculation required if a student completely withdraws during an add/drop period and we refund all charges? A student attends classes during our six-day add/drop period and does a complete withdrawal prior to the end of the add/drop period. Under our institutional refund policy, we cancel the student’s registration and refund 100% of tuition and fees if a student withdraws before the end of the add/drop period.

Yes. As long as a student begins attendance in a payment period or period of enrollment, the student begins earning Title IV funds and return of Title IV funds (R2T4) rules in 34 CFR 668.22 apply. The school must perform the R2T4 calculation if the student completely withdraws at any point prior to the 60 percent point of the payment period/period of enrollment. An R2T4 calculation is required even if the student only attends classes for one day or receives a full refund of institutional charges under institutional refund policies.

3. Do we need to perform a return calculation if aid was not disbursed before a student withdrew? We have a student who dropped all her classes before her federal aid was disbursed due to a previous term debt hold. She did have a valid Institutional Student Information Record (ISIR), and she had a Federal Pell Grant and Federal Supplemental Educational Opportunity Grant (FSEOG) award.

Yes. The student was eligible for and may have earned a percentage of the Title IV aid at the time that she withdrew. Her outstanding debt to the university does not disqualify her from this. You must perform the R2T4 calculation to include the amount of aid that could have been disbursed. If the student meets the conditions for a late disbursement as listed in 34 CFR 668.164(j)(2) of the cash management regulations, then the student would be eligible for a late disbursement and you would be required to make the late disbursement. Reference: The 2016–17 FSA Handbook, pages 5-39 and 5-87


Question Answer 4. Can we wait until the next module begins to

process a return of Title IV funds calculation? The university has a program with standard terms, containing five nine-day modules within a quarter term. We require our faculty to take attendance, but only within each module. The attendance tracking is in faculty grade books, and we are notified within 14 days of the student’s last day of attendance. Faculty can withdraw a student from a module after two absences within the module. During terms with modules, the student is only enrolled in the module; there are no umbrella courses spanning the entire term.

No. There are no circumstances where the school can wait until the next module begins to process the withdrawal and return of Title IV funds (R2T4) calculation. Written confirmation of future attendance must be obtained prior the beginning of the module in which the student is confirming attendance. The school is expected to begin the return of Title IV funds calculation immediately upon its determination that a student has withdrawn; it cannot delay that process in case a student might return. References: 34 CFR 668.22(a)(2)(ii)(B), IFAP Program Integrity Q & A, Return of Title IV Funds, MOD Q-2/A-2

5. When counting the days a student attended in the semester, do you count the day a scheduled break begins?

It depends. The answer depends on the length of the scheduled break. If the scheduled break is shorter than five days, you would include all days, including the first day of the break in the length of the period.

If the scheduled break is five days or longer, you would exclude all the days in the break, including the first day, from the length of the period.

Reference: 2016–17 FSA Handbook, p.5-74


Question Answer 6. If a student must return loan funds as a result

of a return calculation, must the funds be repaid immediately? The R2T4 calculation states that an institution’s return for a Direct Unsubsidized Loan is $2,166.00 and the student’s return for a Direct Unsubsidized Loan is $1,182.25. Does this mean that the student is required to immediately repay the $1,182.25? I understand that the institution’s portion is required to be returned within the 45-day timeframe; however, I am unclear what the student’s return means.

No. The student may choose to, but is not required to, repay those funds immediately. Instead, the student must repay those funds in accordance with the terms of the promissory note when he or she enters repayment on the loan. According to 34 CFR 668.22(h)(3)(i): “Return of unearned aid, responsibility of the student. (3) The student (or parent in the case of funds due to a parent PLUS Loan) must return or repay, as appropriate, the amount determined under paragraph (h)(1) of this section to-- Any title IV loan program in accordance with the terms of the loan;”

7. I have heard that an institution can use, for institutional charges, the amount calculated in the student’s cost of attendance for tuition and fees, books and supplies, and room and board. Is this correct?

No. An institution cannot use estimated charges when determining the amount of institutional charges for the return of Title IV funds (R2T4) calculation. GEN-00-24 defines institutional charges as “the...charges that were initially assessed the student for the payment period or period of enrollment, unless the institution adjusted the student’s institutional charges prior to the student’s withdrawal”. Regulations also refer to “total institutional charges incurred by the student for the payment period or period of enrollment” References: 34 CFR 668.22(g)(1)(ii),(2), 2016–17 FSA Handbook, p. 5-96

8. Do we adjust the institutional charges for a return calculation if we recalculated a student’s Pell prior to him or her withdrawing?

No. The charges used in a R2T4 calculation are always the charges initially assessed by the school adjusted only for changes the institution made prior to the student’s withdrawal (for example, for a change in enrollment status unrelated to the withdrawal). If, after a student withdraws, the institution changes the amount of institutional charges it is assessing a student or decides to eliminate all institutional charges, those changes affect neither the charges nor aid earned in the calculation. Reference: 2016–17 FSA Handbook, p. 5-15


Question Answer 9. Do post-withdrawal disbursement and late

disbursement rules apply when correcting an R2T4 calculation error? An R2T4 calculation was performed and the funds were returned. Later we realized there was an error in the R2T4 calculation, so we corrected the calculation. The loan funds that we originally returned included a larger amount of graduate PLUS than on the corrected calculation. For example, in the initial (incorrect) calculation the school was required to return $1,955.00 in Direct Unsubsidized Loan and $5,028.90 in PLUS funds. In the corrected calculation, the school is only required to return $1,955.00 in Direct Unsubsidized Loan and $629.95 in PLUS funds. This means we now owe the student $4,398.95.

Yes. Based on our understanding of informal guidance we previously received from the U.S. Department of Education (ED), yes, you must follow the all post-withdrawal disbursement procedures in 34 CFR 668.22(a)(6) and late disbursement rules in 668.164(j), even when correcting an error in an R2T4 calculation. This includes any disbursement notification and confirmation requirements. This is true even if doing so places the institution out of compliance with associated regulatory timeframes and deadlines. If it is a late post-withdrawal disbursement which falls outside of the 180-day requirement, the disbursement cannot be made, but the student (or parent for parent PLUS) must still be paid by the school. Note: A school is required to recalculate R2T4 anytime it discovers that an error was made in the calculation, even if the recalculation places the institution out of compliance with R2T4 deadlines. Changes that are not corrections are not required. Changes that are not corrections are allowed only if the change can be made in time for the institution to meet any applicable R2T4 deadline.

10. What is the timeframe for completing an R2T4 calculation for students who withdraw without providing notice?

30 days. You have 30 days after the end of the payment or enrollment period, the academic year, or the educational program in which the student withdrew. You would be out of compliance if you did not identify these students within 30 days after the end of the earlier of one of those deadlines. Once identified (assuming within the 30 days), you will have no later than 45 days to return the unearned Title IV funds. For example, if a student is identified 20 days after the unofficial withdrawal, you will still have 45 days from that point (not 25 remaining days). Please note that the phrase “as soon as possible” is injected as a caveat to the expectation of return deadlines. Reference: 2016–17 FSA Handbook, pages 5-56 and 5-98

1101 CONNECTICUT AVENUE NW, SUITE 1100WASHINGTON, DC 20036-4303

202.785.0453 FAX. 202.785.1487 WWW.NASFAA.ORG

The National Association of Student Financial Aid Administrators (NASFAA)

provides professional development for financial aid administrators;

advocates for public policies that increase student access and

success; serves as a forum on student financial aid issues;

and is committed to diversity throughout all activities.

© 2017 National Association of Student Financial Aid Administrators

5HWXUQRI7LWOH,9)XQGV &RPPRQ4XHVWLRQVDQG … · NASFAA’s Webinar Series Return of Title IV Funds:...

Documents

Transcript of 5HWXUQRI7LWOH,9)XQGV &RPPRQ4XHVWLRQVDQG … · NASFAA’s Webinar Series Return of Title IV Funds:...