Return of Title IV Funds (R2T4)
A student earns aid solely based on the length of time he/she attends. Until a student has passed the 60% point in the semester (term), only a portion of the student’s disbursed aid has been earned. If a student completely withdraws or is expelled prior to the 60% point, then the Return of Title IV funds policy applies.
For students taking classes that are less than 16 weeks in length (referred to as a module), it is possible that withdrawing after completing a less than 16 weeks class will trigger this refund policy. For students who are enrolled in modules, a Return of Title IV funds must be completed if the student does not meet one of the conditions below.
Examples of Return of Title IV Funds Calculations
These examples are for illustration purposes only. Actual charges and refund amounts may vary.
Example 1: Official Withdrawal—Attending Less than 60% of the Semester
The student is enrolled full-time for courses that span the entire 16 weeks. The student, after attending all courses, officially withdraws from all courses on day 42. The original charges for tuition, fees, and books for the term were $2,596. The funds disbursed (credited) to the student’s account were: $1,732 Federal Direct Subsidized Loan and $990 Federal Direct Unsubsidized Loan. The credit balance of $126 (($1732 + $990) - $2,596) was paid to the student after attendance verification.
- There are 113 days in the payment period.
- 42 divided by 113 = 0.3716. This is how much aid the student earned.
- 100% - 37.16% = 62.84%. This is how much aid the student did not earn.
Apply the percentage completed (earned), 37.16% to:
- Title IV (federal) aid disbursed: $2,722 x 37.16% = $1,011.50 earned aid
- $2,722 - $1,011.50 = $1,710.50 unearned aid.
Apply the unearned percentage, 62.84%, to:
- Total charges for the term: $2,596 * 62.84% = $1,631.33 unearned charges.
Hawkeye Community College is responsible for returning the lesser of the unearned charges ($1,631.33) or unearned aid ($1,011.50) to the lender. $1,011.50 would be returned to the lender because is it the lesser of the two amounts.
Example 2: Official Withdrawal—Attended At Least 60% of the Term
The student enrolled half-time (6 credits) for courses that span only the first 8 weeks of the term. Student, after attending all courses, officially withdrew from all courses on day 39. The original charges for the term (tuition, fees, and books) were $1,298. The funds disbursed (credited) to the student’s account were $2,250 Federal Direct Subsidized Loan. The credit balance of $952 ($2,250 – $1,298) was paid to the student after attendance verification.
- There are 56 days in the payment period (8 weeks x 7 days/week = 56). There were no scheduled breaks of 5 days or more.
- 39 divided by 56 = .6964 or 69.64%
- As 69.64% is over 60%, no return of funds is required.
Example 3: Unofficial Withdrawal
The student was enrolled full-time in courses that spanned the full 16 weeks. The student began attendance in all courses. The original charges for tuition, fees, and books for the term were $2,596. The funds disbursed (credited) to the student’s account were: $1,732 Federal Direct Subsidized Loan and $990 Federal Direct Unsubsidized Loan. The credit balance of $126 (($1732 + $990) - $2,596) was paid to the student after attendance verification. After the term was completed, it was determined that the student unofficially withdrew during the term. The student’s last date of attendance, as reported by his instructors, was day 42 of the term.
- There are 113 days in the payment period (term).
- 42 divided by 113 = .3716. However, because this is an unofficial withdrawal, Hawkeye Community College is allowed to utilize the mid-point of the payment period to determine the unearned aid percentage, or 50%.
- 100% - 50% = 50%
Apply the percentage completed (earned), 50.00% to:
- Title IV (federal) aid disbursed): $2,722 x 50% = $1,361 earned aid
- $2,722 - $1,361 = $1,361 unearned aid.
Apply the unearned percentage, 50%, to:
- Total charges for the term: $2,596 x 50% = $1,298 unearned charges.
Hawkeye Community College is responsible for returning the lesser of unearned charges ($1,298) or unearned aid ($1,361); $1,298 would be returned to the lender because it is less than the $1,361 of unearned aid.
Example 4: Post-Withdrawal Disbursement
The student was enrolled full-time for courses that spanned the full 16 weeks. The original charges for the tuition, fees, and books for the term were $2,596. The student began attendance in each course, but officially withdrew on day 8 and received a 100% refund of institutional charges. The funds disbursed (credited) to the students account were: $0 Pell. However, the student could have received $3,023 from the Pell Grant if he had continued to be enrolled.
- There are 113 days in the payment period.
- 8 divided by 113 = .0707 or 7.07%.
Apply the percentage completed (earned), 7.07% to:
- Title IV (federal) aid that could have been disbursed: $3,023 x 7.07% = $213.72 earned aid.
- Total charges for the term: $0. (The student was provided a full refund.)
The student earned more federal financial aid than was disbursed. The post-withdrawal disbursement for Title IV funds would be processed for the student and a refund would be issued within 14 days of the credit balance.
For more information on determining your earned/unearned financial aid, see the Financial Aid Handbook: Withdrawing—The Impact on Financial Aid to view the full Return of Financial Aid Funds Policy.