Who does this regulation apply to?
The Financial Aid Office is required by federal statute to recalculate federal financial aid eligibility for students who completely withdraw, stop attending, or take a medical leave prior to completing 60% of a payment period or term. The federal Title IV financial aid programs must be recalculated in these situations. This process is called Return of Title IV funds (R2T4).
For students only enrolled in modular courses, they are considered withdrawn if they began attending in a least one course and, withdrew from, or stopped attending courses, and was not attending other courses in the period of enrollment used to determine eligibility. Stark State College does not use an R2T4 Freeze Date.
If a student who is enrolled in a course offering that includes modules and meets one of the following conditions, a R2T4 calculation is not required:
- Has successfully completed, with passing grades, a module or combination of modules consisting of 49 percent or more of the payment period or period of enrollment (the period; whichever is used in the R2T4 calculation), excluding scheduled breaks of five or more consecutive days and all days between modules
- Has successfully completed, with passing grades, coursework equal to at least half-time enrollment
- Has fulfilled all requirements to complete the program of study
How is the withdraw date determined?
The withdraw date used in the recalculation of a student’s federal financial aid is the date that the student initiates the withdrawal process. If a student does not officially withdraw from all classes and fails to earn a passing grade in at least one course, federal student aid regulations require that we assume the student has “unofficially withdrawn” unless it can be documented that the student completed the enrollment period. Unofficial withdrawals require a R2T4 calculation. For unofficial withdrawals, the last date of attendance as reported by the Registrar will be used for the R2T4 calculation.
How is aid eligibility recalculated?
Recalculation is based on the percentage of earned aid using the following Federal R2T4 funds formula: Percentage of payment period or term completed (the number of days completed up to the withdrawal date) divided by the total days in the payment period or term. Any break of five days or more is not counted as part of the payment period or term. This percentage of completed days is equal to the percentage of earned aid.
- Example: If you complete 30% of the semester, you earn 30% of the aid you were originally scheduled to receive. This means that 70% of your scheduled awards remain unearned and must be returned to the federal government. Once you have completed more than 60% of the payment period, you earn all your federal financial aid.
Title IV Refund process
Funds are returned to the appropriate federal program based on the percentage of unearned aid. If a student earned less aid than was disbursed, the institution would be required to return a portion of the funds and the student would be required to return a portion of the funds. Keep in mind that when Title IV funds are returned, the student may owe a balance to the institution.
Refunds are allocated in the following order:
- Unsubsidized Federal Direct Loan
- Subsidized Federal Direct Loan
- Federal Direct Parent (PLUS) Loan
- Federal Pell Grant
- Iran and Afghanistan Service Grants
- Federal Supplemental Educational Opportunity Grant
If the calculation results in a credit balance for the student, the student will be refunded as soon as possible, but no later than 14 days after the calculation of the R2T4.
If a student earned more aid than was disbursed to him/her, the institution would owe the student a Post-Withdrawal Disbursement (PWD) which must be paid within 180 days of the date of the school’s determination that the student withdrew. If the calculation results in a PWD, any disbursements will first be applied to the student’s account.
If the PWD is from a grant, after all allowable charges have been paid, the disbursement will be made no later than 45 days after the date of the school’s determination that the student withdrew. No confirmation is required. If the PWD is for Title IV loans, the student (or parent) will be notified via a letter of the option to accept or decline the disbursement. The notification of the offer will be made within 30 days of the R2T4 calculation. The student (or parent) will be given 30 days to respond to accept or decline the disbursement. If no response is received within 30 days, it will be assumed that the student (parent) has declined the disbursement. Any PWD that results in a credit balance will be paid 14 days after the R2T4 calculation.
What happens if I do not repay the funds?
If there is a Pell grant overpayment and a student does not repay the funds within 45 days, the account will be turned over to the Department of Education as an overpayment of federal funds. Students who owe an overpayment of Title IV grant funds are ineligible for further disbursements from all federal student aid programs at any institution until the overpayment is paid in full or payment arrangements are made with the Department of Education.
If a student does not pay funds due to the College to cover a tuition and fees balance that resulted from the college returning unearned federal funds, a hold will be placed on the student’s account. This means that you will not be permitted to register for classes or receive transcripts until your balance is paid in full.
*Medical appeals granted through the Business office do not negate the R2T4 policy. Even if the student has a medical appeal granted the Title IV calculation is still done. Any forgiveness of tuition the student gains can help offset the debt the Title IV refund might create.