On September 2, 2020, the Department published in the Federal Register final regulations on distance education and innovation issues (85 FR 54742). These final regulations make a number of changes to the regulations governing the programs authorized by the Higher Education Act of 1965, as amended (HEA).
These regulations, including changes to the Return of Title IV Funds (R2T4) requirements, are effective July 1, 2021, unless early implemented by institutions. For any institutions that do not early-implement, the new R2T4 regulations will apply to students who withdraw or otherwise cease attendance (including by graduating) on or after July 1, 2021.
The September 2, 2020 final rule amended the R2T4 regulations at 34 CFR §668.22 in several areas. The regulations:
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Updated the order of return (for both institution and student returns) to require returns of Iraq-Afghanistan Service Grants prior to returns of Federal Supplemental Educational Opportunity Grant (FSEOG) and Teacher Education Assistance for College and Higher Education (TEACH) Grant funds;
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Expanded the approved leave of absence (LOA) definition to incorporate subscription-based programs;
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Expanded the definitions of “academic attendance” and “attendance at an academically-related activity” to refer to the new definition of “academic engagement” found under 34 CFR 600.2;
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Updated the definition of a “program offered in modules” to apply only to standard and nonstandard term programs that are not subscription-based;
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Amended the timeframe associated with when a student is considered withdrawn if not scheduled to begin a new course in a non-term or subscription-based program;
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Amended the written confirmation timeframe associated with when a student is scheduled to resume attendance later in the period for students in non-term or subscription-based programs;
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Exempted students who graduate or complete all requirements for graduation from the R2T4 requirements;
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Exempted students in term-based programs that do not use subscription periods from R2T4 requirements if they cease attendance after successfully completing a module or combination of modules that include 49 percent or more of the number of days in the payment period;
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Exempted students in term-based programs that do not use subscription periods from R2T4 requirements if they cease attendance after successfully completing coursework equal to or greater than the coursework required for the institution’s definition of a half-time student under 34 CFR 668.2;
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Amended the requirements for establishing the total number of days in the payment period or period of enrollment (denominator) of the R2T4 calculation to only include the days in a module if the student attended the module or the student’s coursework in that module was used to determine the amount of the student’s eligibility for Title IV, HEA funds for the payment period or period of enrollment; and
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Allowed institutions to use an “R2T4 Freeze Date” to establish the number of days in the denominator of the R2T4 calculation based on the student’s enrollment on a specific date.
To reflect these changes, and to respond to other questions we have received from the community, we have updated the Q & As under the “Return of Title IV Funds” topic on the Department’s Program Integrity Questions and Answers Information page. Affected parties are responsible for taking the steps necessary to comply by the effective date established by the final regulations.
We encourage you to review the preamble to the April 2, 2020 notice of proposed rulemaking (85 FR 18638) and the preamble and final regulations in the September 2, 2020 final federal register notice (85 FR 54742). In addition, we recommend institutions review the Department’s recent webinar on Satisfactory Academic Progress and Return of Title IV Funds for more information regarding the new R2T4 regulations. The link to the webinar recording, transcripts and presentation materials can be found in ANN-21-07.
Any questions related to the new R2T4 regulations should be sent through the Customer Support form in the FSA Partner Connect Help Center. When submitting a question through our Contact Customer Support form, please enter your name, email address, topic and question. When selecting a topic, please select “FSA Ask-A-Fed/Policy.”
We thank you for your continued cooperation as we work to implement these regulations.