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Return to Title IV MASFAP Spring Conference March For Discussion Purposes Only 1. Return of Title IV Funds. Theory of the Calculation

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(1)

David A. Bartlett

Federal Student Aid

U.S. Department of Education

MASFAP Spring 2013

Return to Title IV

Return of Title IV Funds

Applies only to Title IV eligible students who begin attendance and then completely withdraw, or otherwise cease attending

If student enrolled but never attended any classes:

Student did not establish eligibility for any funds Student did not establish eligibility for any funds

All Title IV aid disbursed must be returned to the programs

All Title IV aid disbursed must be returned to the programs

Theory of the Calculation

• Percentage of aid earned is equal to the percentage of payment period or enrollment period completed • If school has disbursed more aid

than the student has earned, money is returned to the programs, or

• If school has disbursed less aid than the student has earned, a post-withdrawal disbursement will be calculated and if applicable funds disbursed to the student

(2)

Institutional Refund Policy

Your institutional refund policy has no

impact on the Return of Title IV funds

calculation

Student still earns Title IV Aid for period

attended even if school removes the

charged tuition and fees

R2T4 calculation supersedes your

institutional refund policy

Consumer Information

•School must provide to prospective students and current students

•Any refund policy with which the school must comply

•School’s tuition refund policy

•Requirements of treatment of Title IV funds after withdrawal

•Procedures for official withdrawal

R2T4 Calculation Timeframes

• Institutions are required to return

funds to the applicable program within 45 days of the date of determination

• Institutions are required to notify a student of the need for

authorization to make a Post-Withdrawal Disbursement (PWD) of Title IV loan funds within 30 days of the date of determination (DOD).

• FSA Handbook Volume 5

(3)

Rounding Rules

Dollar Amounts and Percentages

Calculation -round to the nearest penny • $2,346.00 x 44.6% = $1,046.316 or $1,046.32 • $2,346.00 x 44.4% = $1,041.624 or $1,041.62 Disbursement or refund may be rounded to the nearest dollar • $1,046.32 = $1,046 • $1,041.62 = $1,042 Calculate out to 4 decimal places • 45 days / 101 days = .4455 • 199 hours / 450 hours = .4422 Round to third decimal place • .4455 = .446 = 44.6% • .4422 = .442 = 44.2%

Payment Period or Period of Enrollment

Standard term-based program must use payment period

• May choose on a program-by-program basis • Must be consistent with application of

method used

• Use consistently for each category of students who withdraw from same program of study and

• Attended from the beginning • Re-enter during period • Transfer into school during period

Nonstandard term or nonterm program may choose either payment period or period of enrollment

Complete Top of Worksheet First

HARRY SPRINGER

1 26 1 26

(4)

Aid That Could Have Been Disbursed

(ATCHBD)

Student met conditions for a late disbursement (668.164(g)(2)) –

•At time student withdrew, ED had processed a SAR or ISIR with official EFC

•Pell – ISIR with eligible EFC

•DL – loan had been originated

•Promissory Note must be signed to be included as ATCHBD* •TEACH – grant had been originated

•Perkins/FSEOG – funds had been awarded

•Perkins Loan – Promissory Note must be signed to be included as ATCHBD*

* The Promissory Note must be signed prior to the R2T4 Calculation being completed as described in GEN-05-16

Step 1

Title IV Aid Information

DL Second/Subsequent Disbursements

Include as aid that

could have been

disbursed if student

met the “conditions

for a late

disbursement”

(5)

Date of Institution’s Determination

that Student Withdrew

•Schools required to take attendance should have a DOD no later than 14 calendar days after student’s last date of attendance

•When did the school know of the student’s withdrawal?

•If unofficial withdrawal, determine withdrawal date no later than 30 days after the end of the earlier of the

1. Payment period / period of enrollment, or

2. Academic year, or

3. Educational program

Step

2

Withdrawal Date –

School Not Required to Take Attendance

•Use the earlier of

date student began school’s withdrawal process; or

date student otherwise provided “official” notice; or

midpoint in period (if student didn’t notify school); or

•if student didn’t notify due to circumstances beyond student’s control, the date related to that circumstance; or

•Date school determines leave began (if student didn’t return from approved leave of absence), or

•Use the last date of attendance at an academically related activity as documented by the school

•Written policy, publicized to students

•Student followed school’s policy and was approved

•The leave does not involve additional charges

•LOA may not include more than 180 days in any 12-month period

•Must be a reasonable expectation of return

•Student allowed to complete coursework begun prior to leave at the same point they left

§34 CFR 668.22(d)

Approved Leave

(6)

July 1, 2011 Regulatory Change

•If the institution requires faculty to take attendance in certain circumstances, then the institution is considered “required to take attendance”, for example:

•School requires faculty to take attendance for all of a particular major, then for that major any student that withdraws from the school would be considered “required to take attendance” •School requires faculty to take attendance

during the add/drop period, then school is considered “required to take attendance” during add/drop period Ju ly 1, 201 1

•Institutions not required to take attendance

Regulatory Change: Credit Hour Program with Modules

•A program is “offered in modules” if a course or courses in the program do not span the entire length of the payment period or period of enrollment

•Student may provide intent to attend a future module in writing

•R2T4 calculation not required if the student attends future module

•Future module must begin within 45 calendar days in a standard or non-term program Jul y 1, 201 1

•Modules are defined in 668.22(l)(6)

Regulatory Change: R2T4 Calculation

•Non-Standard terms not substantially equal in length and student has Pell and Loans

•Possible that student(s) withdraw during overlapping payment periods

•Standard terms with modules

(7)

IF… school is required to take attendance by outside entity (such as state or accrediting agency)

THEN... withdrawal date is taken from attendance records

NOTE: Requirement might apply only to specific groups of students

Step 2

Withdrawal Date –

School Required to Take Attendance

Counting Calendar Days or Scheduled Clock Hours

Count every day, including weekends and

holidays, except:

Scheduled break of five or more

consecutive days when no classes are

offered

Days of leave of absence are not included

in total days

Special rule for schools that offer

coursework in modules

Clock Hour Calculation

• Scheduled hours per day times number of days of scheduled class from first day of payment period/period of enrollment to last date of attendance 6 hrs X 9 Days = 54 Numerator is clock

hours scheduled to be completed as of the student’s last date of attendance

• Payment Period = 450 clock hrs. Denominator is clock

hours scheduled to be completed in the payment period/period of enrollment

• School must complete R2T4 calculation in clock hours

New regulation July 1, 2011 for program measured/reported to state/accrediting body in clock hours

(8)

Step 2 - Clock Hour

54.00 450 12 0

12 0 1 17

Step 3

Amount of Title IV Aid Earned by Student

(9)

Post-Withdrawal Disbursements (PWD)

•When Title IV aid disbursed is less than Title IV aid earned

•Step 4, Box J on R2T4 Worksheet

•Must be made from available grant funds before available loan funds

•Funds that could have been disbursed

PWD of Loan Funds: Notifications & Confirmations

•Schools Must:

•Notify a student, or parent (parent PLUS loan), in writing prior to making any PWD

•Receive confirmation from the student or parent borrower prior to disbursement

•Provide written notification within 30 days of date of determination of withdrawal

•Identifying type and amount of funds

•Explaining options to accept or decline some or all of funds

•Obligation to repay any loan funds disbursed

•Provide a deadline for response

Post-Withdrawal Disbursement

of Grant Funds

No student confirmation required to credit student’s account

Disbursed as credit to account – within 180 days after date of determination

(10)

Step 4 (cont.)

Step 5

Amount of

Unearned

Title IV Aid

Due from the

School

Books and Supplies

Institutional Charges

• Title IV funds provided under assumption that they are used to pay institutional charges ahead of all other aid

• Are always charges assessed for entire payment period or period of enrollment prior to withdrawal

(11)

Institutional Charges

• Include tuition, fees, room and board (if contracted with school) and other educationally-related expenses assessed • For nonterm, credit hour programs use costs

associated with number of courses student is expected to complete in period for which aid is awarded

– If student withdraws, institutional charges must include all courses student was initially expected to complete

Institutional Charges –

When to Prorate: 34 CFR 668.22(g)(3)

For nonterm-based programs where return calculation based on payment period but school charges for period of enrollment

• Institutional charges for payment period are prorated down from longer period

If school has retained Title IV in excess of prorated amount, including allocating costs for equipment and supplies to the beginning of the program, funds retained are attributed to that payment period

Step 5

(12)

Step 6

Return of Funds by School

Law specifies order of Title IV

programs to which funds must be

returned

Never return more money than was

received from a Title IV program

Return of Funds by School

Return funds to program(s) as soon

as possible, but no later than 45

calendar days after the date of

determination of withdrawal

Calculation must be completed

within 30 calendar days of the date

of determination of withdrawal

(13)

Step 7

Return of Funds by Student

1000.00

Step 8

Repayment of Student’s Loans

Repayment of Student’s Loans

Student is responsible to repay any

loan funds not returned by the

school

(14)

Step 9

Calculating Grant Overpayment - Example

3,200

215.25 0 215 25

215.25 1,600 -1384 75

1,600 00

Step 10

Return of Funds by Student

Law specifies order of Title IV programs

to which funds must be returned

Student is obligated to return any Title

IV overpayment in the same order that

is required for schools

(15)

Grant Overpayment and Notifications

Within 30 days of determining that a

student who withdrew must repay all or

part of a Title IV grant, school must

provide notification that:

student owes an overpayment

eligibility for Title IV funds will end after

45 day period

student must repay using one of the

positive action steps

Positive Action Steps

to Retain Eligibility

Student retains Title IV eligibility for 45 days

• During that time, student must either:

• repay in full to school

• make satisfactory arrangements to repay

with school (school’s option-not required)

• make satisfactory arrangements to repay

with Department of Education

Receipt of Additional TIV Funds During the 45-day Period of Extended Eligibility

If student fails to return the overpayment or comply with action steps:

• student becomes ineligible for Title IV funds following 45 day period

• funds received during this period do not have to be returned unless student withdrew

(16)

R2T4 Reporting Processes for Grant

Overpayments

For payments received on a

current-year overpayment make appropriate

COD entry

For payments received on previous

year’s grants, make same entry in

COD, and electronic refund function

in G5

R2T4 Reporting Processes for Direct

Loan Program: Payments and Reductions

If student has received an overpayment of

Direct Loan funds

• school should reduce student’s award/disbursements by making a downward adjustment in COD

• school then returns funds to the Department using the Electronic Refund function in G5

Reporting Overpayments to NSLDS

A school may report an overpayment to NSLDS

• any time after student has had the opportunity to pay off overpayment in full to the school, OR • indicate their intent to negotiate

repayment arrangements with Debt Resolution Services

(17)

Referring overpayments for collection vs. reporting overpayments to NSLDS • referring is the process of turning over a

student’s debt to Debt Resolution Services • reporting is the process of creating within

NSLDS a record of a student’s overpayment.

Referring Overpayments

to the Department

Resources

•FSA Handbook, Volume 5

•34 CFR 668.22

•Program Integrity Information – Questions and Answers

http://www2.ed.gov/policy/highered/reg/hearulemaking/2009/return.html •Preamble to the Final Regulations 10/29/2010

http://www.gpo.gov/fdsys/pkg/FR-2010-10-29/pdf/2010-26531.pdf •GEN -11-14 July 20, 2011: Implementation of Program

Integrity Regulations

•FSA Coach

http://www2.ed.gov/offices/OSFAP/fsacoach/index.html

Additional Resources

•Dear Colleague Letter GEN-04-03 (February 2004)

•Dear Colleague Letter GEN-04-12 (November 2004)

•R2T4 Demo Site available at

•http://fafsademo.test.ed.gov

•R2T4 website available via FAA Access to CPS Online

•http://www.faaaccess.ed.gov/

•FSA Assessments

(18)

QUESTIONS?

David Bartlett U.S. Department of Education Federal Student Aid 816‐268‐0434 david.bartlett@ed.gov 

Presentation Evaluation

I would appreciate if you would take the time to submit an evaluation of this presentation. A paper evaluation

is attached. Thanks much!

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