Return of Federal Title IV Funds
Federal law specifies how an institution must determine the amount of Federal Title IV program assistance that students earn if they withdraw from school. A Return of Title IV (R2T4) calculation must be completed for students who withdrawal. The following questions and answers below outline(s) the policies and procedures of R2T4.
What Federal Title IV aid programs are covered by this regulation?
Federal Pell Grants, Iraq and Afghanistan Service Grants, Federal TEACH Grants, Federal Direct Loans, Federal Direct PLUS Loans, Federal Supplemental Educational Opportunity Grants, and Federal Perkins Loans.
As a Goucher student what would constitute a withdrawal status for R2T4 purposes?
A withdrawal can be official or unofficial.
An official withdraw is completed by following the procedures outlined here.
An unofficial withdrawal occurs when a student earns all F grades for a given semester. For those students who receive all F grades, contact will be made with each professor to determine when the student stopped attending or otherwise discontinued participation in an academically related activity.
How does a student earn Title IV funds?
Though financial aid is posted to accounts at the start of the semester (or period of enrollment), students earn the funds as they complete the period of enrollment. If a student withdraws during the period of enrollment, the amount of Title IV program assistance that they have earned up to that point is determined by a specific formula.
What is the R2T4 formula?
The amount of assistance that a student earned is determined on a pro rata basis.
For example, if a student completed 30% of their period of enrollment, he/she earned 30% of the assistance originally scheduled.
Once more than 60% of the period of enrollment has been completed; the student has earned all aid for that period. The percentage of Title IV aid to be returned is equal to the number of calendar days the student was enrolled (minus scheduled breaks) divided by the number of calendar days in the period of enrollment.
What happens if a student did not receive all the funds they earned?
If a student did not receive all of the Federal funds that have been earned, they may be due a post-withdrawal disbursement. If the post-withdrawal disbursement includes loan funds, Goucher must get the student's written permission before disbursing them. A student may choose to decline some or all of the loan funds in order to reduce additional debt. Goucher may automatically use all or a portion of the post-withdrawal disbursement of grant funds for tuition, fees, and room and board charges. Goucher requires the student's written permission to use the post-withdrawal grant disbursement for all other school charges. If the student does not grant permission, the funds will still be offered.
What if a student received excess funds?
If a student (or parent on the student's behalf) received excess Federal Title IV program funds that must be returned, Goucher must return a portion of the excess equal to the lesser of:
- the student's institutional charges multiplied by the unearned percentage of your funds, or
- the entire amount of excess funds.
Goucher is required to return this amount even if it didn't keep this amount of your Title IV program funds. If Goucher is not required to return all of the excess funds, the student must return the remaining amount to the Department of Education. Any loan funds that the student must return, the student (or parent for a Direct PLUS Loan) must repay in accordance with the terms of the promissory note.
What is an overpayment?
Any amount of unearned grant funds returned is called an overpayment. The maximum amount of a grant overpayment that the student must repay is half of the grant funds received or were scheduled to receive. Students do not have to repay a grant overpayment if the original amount of the overpayment is $50 or less. The student must make arrangements with Goucher or the Department of Education to return the unearned grant funds.
Is the R2T4 policy the same as Goucher's refund policy?
The requirements for Title IV program funds when a student withdraws are separate from the refund policy that Goucher has. Therefore, a student may still owe funds to Goucher to cover unpaid institutional charges. Goucher may also charge a student for any Title IV program funds that the school was required to return. More information regarding Goucher's refund policy may be found here.