Return of Title IV Funds Case Studies - Part 2

A student officially withdraws, returns, and withdraws again while receiving Title IV grants at a school that uses a term-based modular course structure, measures academic progress in credit hours, and performs its return calculations on a payment period basis.

A student officially withdraws and is receiving Title IV grants at a school that uses a nonterm program structure, measures academic progress in credit hours, and performs its return calculations on a payment period basis.

Here is an example of when a student receives Title IV grants at a school and officially withdraws. The school utilizes a term-based modular course structure, measures academic progress in credit hours and performs its Title IV return calculations on a payment period basis.

Learn to complete Steps 1–10 of the Treatment of Title IV Funds When a Student Withdraws from a Credit-Hour Program worksheet and be able to:

On the first day of the period, August 22, Thompson received the following disbursements to his student account (school uses the aggregate method to match FSEOG):

On October 17, Thompson comes to see you. Even though he fully attended his first two modules, he struggled with his coursework and earned Fs in both modules and is unsure if this is the correct career path for him. He needs some time to think about his future and feels it is best if he withdraws from the first semester now.

When a student withdraws from one of a series of modules in a term-based program, a school must first determine whether or not the student must be treated as a withdrawal. In order to do so, the school should review the following five questions:

Because Thompson does not meet any of the R2T4 withdrawal exemptions and did not provide any written confirmation of future attendance, LSDJ must treat him as a withdrawn student.

Because Thompson failed to begin attendance in all of the classes on which his Pell Grant was based, before performing the required Return calculation, LSDJ must recalculate Thompson’s Pell based on his enrollment in just the two modules he began—six credits or half time. Thompson’s scheduled annual Pell award as a half-time student is $2,775. His revised first semester award is $1,388.00. LSDJ must return $1,387.00 (the difference between Thompson’s initial Pell disbursement of $2,775.00 and his new award of $1,388.00), and include only his new award of $1,388.00 in the Title IV return calculation. The school returns the $1,387.00 through G5 and reduces Thompson’s Pell Grant in COD to $1,388.00.

In addition, since Thompson was receiving Campus-Based aid (FSEOG), the school has to recalculate his eligibility for Campus-Based funds, eliminating the costs attributable to the modules that he did not begin attending to see whether a reduction of the Campus-Based aid is necessary. Based on a revised COA of $3,600.00 for the fall semester and revised Pell Grant of $1,388.00, Thompson’s remaining firstsemester need is $2,212.00. That is more than his FSEOG of $1,825.00. Therefore, LSDJ does not need to reduce Thompson’s FSEOG award before performing the Title IV return calculation.

LSDJ performed an R2T4 calculation using Thompson’s last day of attendance of October 14 as his withdrawal date (as per school policy); $1,388.00 as the amount of Pell Grant disbursed; and $1,825.00 as the amount of FSEOG funds disbursed. On October 24, LSDJ returned the funds for which it was responsible to the appropriate programs, and made the appropriate adjustments in COD.

Per school policy, Thompson’s withdrawal date is his last day of attendance at an academically related activity as determined from the school’s attendance records, October 14.

At the beginning of the semester, the following awards were posted to Thompson’s account at LSDJ.

After recalculating and returning the Pell Grant funds for which Thompson was ineligible, the Title IV grant aid disbursed was

Net Title IV loans that could have been disbursed = $ 0.00.

Title IV grants that could have been disbursed = $ 0.00.

Title IV loans that could have been disbursed = $ 0.00.

Total Title IV aid disbursed for the payment period = A + B = 3,213.00 + 0.00 = $ 3,213.00.

Total Title IV grant aid disbursed and could have been disbursed for the payment period = A + C = 3,213.00 + 0.00 = $ 3,213.00.

Total Title IV aid disbursed and could have been disbursed for the payment period = A + B + C + D = 3,213.00 + 0.00 + 0.00 + 0.00 = $3,213.00.

LSDJ has an institutional policy of using the last date of attendance in an academically related activity as determined from its attendance records as the withdrawal date for students who cease attendance before completing more than 60 percent of the payment period. Thompson’s last date of attendance was October 14.

Because this percentage is 60% or less, the percentage of Title IV aid earned = 50.0%.

50.0% (percentage of Title IV aid earned from Box H) × $3,213.00 (Total of the Title IV aid disbursed and could have been disbursed for the payment period or period of enrollment from Box G) = $1,606.50. Amount of Title IV aid earned by the student = $1,606.50.

Because the total Title IV aid earned (Box I) is less than the total Title IV aid disbursed (Box E), no post-withdrawal disbursement is due, and we proceed to Box K.

Post-withdrawal disbursement = N/A.

Because the total Title IV aid disbursed (Box E) is greater than the total Title IV aid earned (Box I), Title IV aid must be returned.

$3,213.00 (Box E) – $1,606.50 (Box I) = $1,606.50. Title IV Aid to be returned = $1,606.50.

The institutional charges on Thompson’s account are the charges initially assessed for the payment period. Note that books and supplies are not included because Thompson had an opportunity to purchase them elsewhere, and did.

Subtract the percentage of Title IV earned from Box H (50.0%) from 100.0%. 100% – 50.0% = 50.0%. percentage of Title IV aid unearned = 50.0%.

Calculate the amount of unearned charges. $3,400.00 (institutional charges from Box L) × 50.0% (% of Title IV aid unearned from Box M) = $1,700.00.

Amount of unearned institutional charges = $1,700.00.

Compare the amount of Title IV aid to be returned (Box K) to unearned institutional charges (Box N), and enter the lesser amount in Box O.

Amount of unearned Title IV aid due from the school = $1,606.50.

The student had no loans, so the total loans the school must return = $0.00

Thompson received a recalculated Pell Grant disbursement of $1,388.00. Since $1,388.00 is less than the $1,606.50 (Box O), the school must return the $1,388.00 to the Pell Grant Program and an additional $218.50 (1,606.50 – 1,388.00) to the FSEOG program through the G5 system. The school must also reduce Thompson’s Pell Grant in COD to $0.00.

The school must return any unearned funds within 45 days from the date of the school’s determination that Thompson withdrew.

Subtract the amount of Title IV aid the school must return ($1,606.50 from Box O) from the total amount of Title IV aid that is to be returned ($1,606.50 from Box K) to find the initial amount of Title IV aid due from the student. $1,606.50 – $1,606.50 = $0.00.

Because Box Q is $0.00, no further calculation is needed.

Here is an example of when a student receiving Title IV grants officially withdraws, but returns within the payment period and withdraws again. The school utilizes a term-based modular course structure, measures academic progress in credit hours and performs its Title IV return calculations on a payment period basis.

Learn to complete Steps 1–10 of the Treatment of Title IV Funds When a Student Withdraws from a Credit-Hour Program worksheet, and be able to:

On November 11, Thompson Hunter (the student from Case Study 6) walks into your office with the news that his wife Barbara Ann has quit her acting job in LA and moved back to Las Vegas. Realizing having a career is important for him to take care of his family, Thompson would like to re-enter the program when the fourth module begins on November 14.

When Thompson returns for module four, 34 CFR 668.22(a)(2)(iii)(A) applies. That regulation provides that, if a student withdraws from a term-based credit-hour program offered in modules and re-enters the same program prior to the end of the payment period, the student is treated as if he or she did not cease attendance for purposes of determining the student’s aid awards for the period. The student is considered to be in the same payment period he or she was in at the time of the withdrawal and retains his or her original Title IV eligibility for that payment period, provided the student’s enrollment status continues to support the same amount of those funds. To do this, the school must:

When Thompson returns in module four, the three credits for that module are added to the six credits that Thompson completed previously. Nine credits at LSDJ are the minimum number required for three-quarter-time enrollment status. Therefore, the school must recalculate Thompson’s eligibility for Title IV assistance as a three-quarter time student. Thompson’s scheduled annual Pell award as a three-quarter-time student is $4,163.00, and his one-semester award is $2,081.50.

After recalculating Thompson’s eligibility from full time to half time when he withdrew previously, the school returned $1,387.00 (the difference between Thompson’s initial Pell disbursement of $2,775.00 and his halftime award of $1,388.00). The school then included only his new award of $1,388.00 in the Return calculation and returned the entire amount as a result of the calculation. The school also reduced his Pell award in COD to $0.00. When Thompson returns, the school must once again adjust his award in COD (this time to his three-quarter-time award of $2,081.50) and draw down and disburse $2,081.50 to his account.

In addition, the school has to recalculate Thompson’s eligibility for Campus-Based funds, adding the costs attributable to the additional module that he has begun attending, to see whether a modification of his Campus-Based aid is necessary. Based on a revised COA of $4,100.00 for the fall semester and revised Pell Grant of $2,081.50, Thompson’s remaining first-semester need is $2,018.50. That is greater than his initial FSEOG award of $1,825.00. Therefore, since it has not already awarded the $218.50 that it returned previously to another eligible student, the school re-awards and disburses the $218.50 in FSEOG funds to Thompson.

When the aid officer reviews the results of the previous Title IV return calculation, he finds that Thompson had not been required to return any Title IV funds; therefore, there are no student overpayments to cancel.

On the first day of module four, November 14, LSDJ made the following disbursements to his student account (school uses the aggregate method to match FSEOG):

After class on December 5, Thompson once again comes to see you. He says that his uncle Raoul (born in England under mysterious circumstances) has just discovered that he is in line to be the Duke of Marlboro. Raoul must go to England immediately to claim the title, and he’s willing to cover the cost of Thompson’s traveling with him to the investiture. Therefore, Thompson has decided to withdraw immediately.

When a student withdraws from one of a series of modules in a term-based program, a school must first determine whether or not the student must be treated as a withdrawal. In order to do so, the school should review the following five questions:

Thompson began attendance in all of the classes on which his Pell Grant was based (modules 1,2, and 4). Therefore, the school did not need to recalculate Thompson’s revised Pell Grant. In addition, since Thompson began attendance in all of the classes on which his Campus-Based aid (FSEOG) was based, the school did not have to recalculate his eligibility for Campus-Based funds.

Per school policy, Thompson’s withdrawal date is his last day of attendance at an academically related activity as determined from the school’s attendance records, December 5.

Since Thompson had begun all modules (classes) on which his Pell and Campus-Based aid was based, the Title IV grant aid disbursed was –

Net Title IV loans that could have been disbursed = $ 0.00.

Title IV grants that could have been disbursed = $ 0.00.

Title IV loans that could have been disbursed = $ 0.00.

Total Title IV aid disbursed for the payment period = A + B = 3,906.50 + 0.00 = $ 3,906.50.

Total Title IV grant aid disbursed and could have been disbursed for the payment period = A + C = 3,906.50 + 0.00 = $ 3,906.50.

Total Title IV aid disbursed and could have been disbursed for the payment period = A + B + C + D = 3,906.50 + 0.00 + 0.00 + 0.00 = $3,906.50

Though it is not a school that is required to take attendance, LSDJ has a school policy of using a student’s last date of attendance at an academically related activity as the withdrawal date when a student withdraws from a program offered in modules.

The total number of days in the payment period is the original 108 days. While the student did not begin module three, since Thompson was enrolled in module three as of LSDJ’s R2T4 Freeze Date (September 10), module three is considered to have been used to determine the amount of Thompson’s eligibility for Title IV, HEA funds, and therefore, the days from module three are also included in the denominator.

The total number of completed calendar days in the period reflects the completed days in modules one, two, and four. From the previous Title IV return calculation, we know that Thompson completed 54 days in modules one and two. He completed 13 days in module 4 (22 days less the 9-day scheduled break). The total number of days completed (the days completed in modules one, two, and four) are the sum of the days completed during each period or 67 days (54 + 13).

Because this percentage is greater than 60%, the percentage of Title IV aid earned = 100.0%. Note that although no return is required, the school must complete Step 3 in order to determine whether 100% of his aid has been disbursed or Thompson was due a post-withdrawal disbursement.

Percentage of Title IV aid earned = 100.00%

100.0% (percentage of Title IV aid earned from Box H) X $3,906.50. (Total of the Title IV aid disbursed and could have been disbursed for the payment period or period of enrollment from Box G) = $3,906.50.

Amount of Title IV aid earned by the student = $3,906.50.

No further action is necessary.

Here is an example of when a student receiving Title IV grants and loans officially withdraws and is not scheduled to return within 60 days. The school utilizes a nonterm program structure, measures academic progress in credit hours and performs its Title IV return calculations on a payment period basis.

Learn to complete Steps 1–10 of the Treatment of Title IV Funds When a Student Withdraws from a Credit-Hour Program worksheet, and be able to:

On the first day of the period, August 1, Eli received the following disbursements to his student account (school uses the aggregate method to match FSEOG):

On August 25, Eli comes to see you. He tells you that his twin brother, Jake, has just won an all-expenses paid Mediterranean cruise for two and has invited Eli to accompany him on the cruise. Eli has decided not to miss this chance of a lifetime. He intends to drop courses two and three, and return for the original fourth course on October 26. On August 26, Eli completes his first course and withdraws.

Under 34 CFR 668.22(l)(6), a program is ‘‘offered in modules’’ if the program uses a standard term or nonstandard-term academic calendar, is not a subscription-based program, and a course or courses in the program do not span the entire length of the payment period or period of enrollment. Based upon the Department’s new definition of a program offered in modules established in the September 2, 2020 final regulations, GSSM’s nonterm program is NOT considered a program offered in modules. Therefore, none of the R2T4 module requirements apply, including the withdrawal exemptions associated with modules.

Note: CFR 34 668.22(a)(2)(i)(D) provides that a student in a nonterm or subscription-based program is considered to have withdrawn for Title IV purposes if the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence. 34 CFR 668.22(a)(2)(ii)(A)(5) provides that, for a nonterm program, a student is not considered to have withdrawn if the institution obtains written confirmation from the student at the time that would have been a withdrawal of the date that he or she will resume attendance, and that date is no later than 60 calendar days after the student ceased attendance.

The course in which Eli will be returning does not start until October 26. That is 61 days from August 26, the end of the first course. Therefore, in Eli’s case, since he is unable to provide written confirmation to return within 60 days after ceasing attendance, GSSM must treat Eli as a withdrawal.

Because Eli failed to begin attendance in all of the classes on which his Title IV aid was based, before performing the required Return calculation GSSM must recalculate Eli’s eligibility for Title IV funds based on his enrollment in just the one course he began— three credits, or less than half time.

Note: Pell Grant awards for students in clock-hour programs and programs without terms are always based on the Payment Schedule for Determining Full-Time Awards. Therefore, a school does not have to recalculate a Pell Grant when a student attending a nonterm program or clock-hour program withdraws.

The school does have to recalculate Eli’s eligibility for Campus-Based aid (FSEOG and FWS), eliminating the costs attributable to the courses that he did not begin attending, to see whether a reduction of the Campus-Based aid was necessary. After eliminating the expenses associated with the period of non-attendance, the school determined that the COA (for Campus-Based purposes) associated with Eli’s enrollment in the first course was $2,600.00. The loan funds that Eli had already received (and for which his eligibility does not have to be recalculated—$2,700.00) plus his Pell Grant ($2,775.00), plus the $500.00 in FWS Eli has earned to date equal $5,975.00. Since $5,975.00 exceeds Eli’s revised COA of $2,600.00, the aid officer determined that Eli was not eligible for any FSEOG funds, so the school had to reduce Eli’s FSEOG award to $0.00 and either award the $2,000.00 in FSEOG funds to another eligible student or return them to ED. Note that Pell Grants and earned FWS funds are never reduced to address an overpayment.

Note: Any time a student changes his or her enrollment status, the school must recalculate the student’s COA to determine if the student’s eligibility for Campus -Based funds has changed. The school may not include in the COA costs associated with any classes the student failed to begin. Moreover, when a student enrolled in a clock-hour or nonterm program withdraws, a school that calculates Returns on a period of enrollment basis may not include costs associated with any future payment period for which the student has not confirmed attendance at the time of withdrawal and that does not start within 60 days in the student’s COA.

GSSM performed an R2T4 calculation using Eli’s last day of attendance of August 26 as his withdrawal date; $2,775.00 as the amount of Pell Grant disbursed; $0.00 as the amount of FSEOG funds disbursed; and $2,700.00 as the amount of Subsidized Direct Loan funds disbursed. On September 4, GSSM returned the funds for which it was responsible to the appropriate programs.

Eli’s withdrawal date is his last day of attendance at an academically related activity as determined from the school’s attendance records, August 26.

At the beginning of the payment period, the following awards were posted to Eli’s account at GSSM.

After recalculation, the Title IV grant aid disbursed was

Net Title IV loans disbursed

Title IV grants that could have been disbursed = $ 0.00.

Title IV loans that could have been disbursed = $ 0.00.

Total Title IV aid disbursed for the payment period = A + B = 2,775.00 + 2,700.00 = $ 5,475.00.

Total Title IV grant aid disbursed and could have been disbursed for the payment period = A + C = 2,775.00 + 0.00 = $ 2,775.00.

Total Title IV aid disbursed and could have been disbursed for the payment period = A + B + C + D = 2,775.00 + 2,700.00 + 0.00 + 0.00 = $5,475.00.

For Title IV purposes, Eli’s withdrawal date is August 26, the day he dropped his second and third courses and notified the school that he would not be returning until the start of his fourth course (61 days after ceasing attendance).

Because this percentage is less than or equal to 60%, the percentage of Title IV aid earned in Box H = 23.6%.

23.6% (percentage of Title IV aid earned from Box H) X $5,475.00 (Total of the Title IV aid disbursed and could have been disbursed for the payment period or period of enrollment from Box G) = $1,292.10. Amount of Title IV aid earned by the student = $1,292.10.

Because the total Title IV aid earned (Box I) is less than the total Title IV aid disbursed (Box E), no post-withdrawal disbursement is due, and we proceed to Box K.

Post-withdrawal disbursement = N/A.

Because the total Title IV aid disbursed (Box E) is greater than the total Title IV aid earned (Box I) Title IV aid must be returned.

$5,475.00 (Box E) – $1,292.10 (Box I) = $4182.90. Title IV Aid to be returned = $4182.90.

The institutional charges on Eli’s account are the charges initially assessed for the payment period. Note that books and supplies are not included because Eli had an opportunity to purchase them elsewhere, and did.

Subtract the percentage of Title IV earned from Box H (23.6%) from 100.0%. 100% – 23.6% = 76.4%. Percentage of Title IV aid unearned = 76.4%.

Calculate the amount of unearned charges. $6,400.00 (institutional charges from Box L) X 76.4% (% of Title IV aid unearned from Box M) = $4,889.60. Amount of unearned institutional charges = $4,889.60.

Compare the amount of Title IV aid to be returned (Box K) to unearned institutional charges (Box N), and enter the lesser amount in Box O.

Amount of unearned Title IV aid due from the school = $4182.90.

The amount of unearned Title IV aid due from the school is $4182.90 (Box O), and Title IV loans are returned before Title IV grants. Since Eli received a Net Subsidized Direct Loan of $2,700.00, the school returns the entire $2,700.00 to the Direct Loan Program.

The school also returns $1,482.90 ($4182.90 [from Box O] – $2,700.00 [from Box P]) to the Pell Grant Program.

The school must return any unearned funds within 45 days from the date of the institution’s determination that Eli withdrew.

Subtract the amount of Title IV aid the school must return ($4,182.90 from Box O) from the total amount of Title IV aid that is to be returned ($4,182.90 from Box K) to find the initial amount of Title IV aid due from the student. $4,182.90 – $4,182.90 = $0.00.

There is no unearned aid due from the student, so the Title IV return calculation ends here.