Volume 5

Withdrawals and the Return of Title IV Funds

Introduction

An overpayment occurs when the student receives more aid than he or she was eligible to receive. One kind of overpayment, traditionally called an over award, results from changes in the student’s aid package; a second occurs when a student withdraws. This volume covers how a school should respond when a student withdraws.


Throughout the Federal Student Aid Handbook we use “college,” “school,” and “institution” interchangeably unless a more specific use is given. Similarly, “student,” “applicant,” and “aid recipient” are synonyms. “Parents” in this volume refers to the parents of dependent students, and “you” refers to the primary audience of the Handbook: financial aid administrators at colleges. “We” indicates the U.S. Department of Education (the Department, ED), and “federal student aid” and “Title IV aid” are synonymous terms for the financial aid offered by the Department.

We appreciate any comments that you have on the Application and Verification Guide (AVG), as well as all the volumes of the FSA Handbook. We revise the text based on questions and feedback from the financial aid community, so please reach out to us about how to improve the Handbook through the “Contact Customer Support” feature in our Partner Connect Help Center and clicking on “FSA Handbook” under the Topic section.

COVID-19 Guidance and Waivers

The Department of Education recognizes that the ongoing COVID-19 pandemic has created many unique challenges for postsecondary institutions. The Department has provided a variety of special guidance and regulatory flexibilities due to the President’s declaration of the COVID- 19 national emergency on March 13, 2020. In addition, Congress has passed legislation offering relief from certain statutory requirements related to the Title IV, HEA programs.

For COVID-19 related guidance, including waivers and exemptions to Title IV rules, please see the following webpages:

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 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.

For more information about the Return of Title IV (R2T4) exceptions, examples, reporting requirements and qualifying students, please see the electronic announcement (EA) dated May 15, 2020 and the EA dated March 19, 2021.

Please also see the following operational announcements related to the implementation of the CARES Act and use of the Coronavirus Indicator:

Changes for 2022–2023

While there were no major changes or updates to Volume 5 in the 2022-2023 award year edition, the Department would like to remind our partners of the significant changes that occurred to the R2T4 regulations in the 2021-2022 award year edition as outlined in the Department’s final Federal Register notice published September 2, 2020 (85 FR 54742). For more information about the changes to the R2T4 regulations, please see the electronic announcement (EA) dated August 20, 2021.

We also updated the Q & As under the “Return of Title IV Funds” topic on the Department’s Program Integrity Questions and Answers Information page to respond to additional questions we have received from the community.

Last Modified: 07/14/2022 • Published: 03/28/2021