Return of Title IV Funds (R2T4)

Title IV funds are awarded to a student under the assumption that the student will attend school for the entire period for which assistance was awarded. Under the Return of Title IV (R2T4) regulations, a student is considered to have withdrawn from a payment period or period of enrollment if they do not attend all of the days in the payment period they were scheduled to complete. Students “earn” Title IV aid that has been awarded in direct proportion to the number of days of the payment period (semester) they remain enrolled, through the 60% point in the semester. A student who withdraws after the 60% point earns 100% of the aid awarded for that term.

 If a recipient of FSA grant or loan funds withdraws from school after beginning attendance during a semester, the college must calculate the amount of assistance the student earned. If the amount disbursed to the student is greater than the amount the student earned, the unearned funds must be returned (refer to the R2T4 manual for further details). If the amount disbursed to the student is less than the amount earned, then the student is eligible to receive a post-withdrawal disbursement (PWD).

If the student has received excess funds that must be returned to ED, the college shares the responsibility of returning those excess funds with the student. The college’s portion of the excess funds to be returned is equal to the lesser of the entire amount of the excess funds, or the student’s total tuition and fee charges multiplied by the percentage of unearned funds. If the college is not required to return all of the excess funds, the student may be required to return a portion of the remaining amount. The college must return its share of unearned funds to ED. The student may repay their share to the college or, if the overpayment has been referred to NSLDS, make arrangements to repay ED directly.
The order (of programs) in which aid is returned.

  • Unsubsidized Loan
  • Subsidized Loan
  • PLUS Loan
  • Pell
  • Iraq & Afghanistan Service Grant (IASG)

Eligible Student
The student must be eligible to receive federal funds prior to the date of withdrawal. The conditions that make a student eligible for a “late disbursement” of Title IV funds must be met in order for Title IV aid to be considered “aid that could have been disbursed” and included in the R2T4 calculation. It is prohibited to award additional Title IV aid after the student has withdrawn. The exception to this rule is when students are within the 120-day deadline to complete verification (except Direct Loans which cannot be awarded after the last day of enrollment).

 Determining Student’s Withdrawal Date
The R2T4 process cannot occur until the college learns that the student has completely withdrawn. The date the college determines the student withdrew (also referred to as the “date of determination”) captures the point in time when the college could reasonably have been expected to know that a student withdrew. 
For official withdrawals, this date is either the date the student began the withdrawal process or the date of their withdrawal notification.
 For unofficial withdrawal, student is no longer in attendance (usually after the end of the semester).

Note: For a student who withdraws without providing notification to the school, the school must determine the withdrawal date no later than 30 days after the end of the earlier of (1) the payment period or the period of enrollment (as applicable), (2) the academic year, or (3) the student’s educational program.  At CUNY, the institutional determination date for these calculations is 21 days from the end of the term.

  • The college must document a student’s withdrawal date and maintain the documentation.
  • The date of determination is used to determine the following R2T4 deadlines:
  • The college must perform an R2T4 calculation within 30 days.
  •  The college must disburse grant funds within 45 days to the student (written acceptance by the student is not required for post-withdrawal disbursements of grant funds).
  • The college must notify a student if a grant overpayment is due within 30 days.
  • A post-withdrawal disbursement of loan funds must be offered to the borrower within 30 days.
  •  The college may disburse loan funds no later than 180 days if the borrower accepts the offer of all or a portion of a post-withdrawal disbursement of loan funds (written acceptance by the borrower is required for post-withdrawal disbursements of loan funds).
  •  The college must return the amount of Title IV funds for which it is responsible no later than 45 days.
  • The types of withdrawal and the corresponding withdrawal trigger date are summarized in the Return of Title IV Funds – Determining Trigger Dates chart.

Official Withdrawals
When a student officially withdraws, the college may use any one of the following dates that best represents the student’s last date of attendance:

  • Date student began the withdrawal process prescribed by the college.
  • Date student provided official notification.
  • Last date of an academically related activity as documented by the college.

Unofficial Withdrawals
When a student leaves without notice, the college may use any one of the following dates that best represents the last of documentable date of attendance:

  • Date provided by an instructor
  • Date college determines illness, accident, or grievous personal loss occurred
  • Mid-point of the semester

Administrative Withdrawals
If a school administratively withdraws a student who has not notified the school of their intent to withdraw, the last possible date of withdrawal for the student is the date the school terminates the student’s enrollment. Other examples of administrative withdrawal may include:

  • Expulsion
  • Suspension
  • Cancellation of registration
  • Failure to comply with immunization requirement

Determine the Amount of Aid the Student Earned
The semester begins on the first day of class and ends on the last day of final exams. Any scheduled breaks of five consecutive days or more should be excluded from the count of days. The amount of aid a student has earned is determined by the number of days that the student attended by the number of days in the semester, then multiplying the result by the amount of federal aid the student “could have been disbursed”.  This amount is compared to the amount of aid the student actually was disbursed to determine whether FSA funds must be returned or whether the student will receive a post withdrawal disbursement.

Post-Withdrawal Disbursement
 If a student has received less Title IV funds than earned, the student must receive a postwithdrawal disbursement of any grant funds refunded to the student within 45 days from the date of determination. The school is not required to obtain written confirmation from the student for acceptance of a post-withdrawal disbursement of grant funds. The college must notify the student in writing within 30 days of the college’s determination of withdrawal prior to making a post-withdrawal disbursement of loan funds.
 The notification must:

  • Identify the type and amount of the loan funds.
  •  Ask whether those loan funds are to be credited to the student’s account or disbursed directly to the student (or parent)
  •  Include the information necessary for the student, or the student’s parent in the case of a PLUS Loan, to make an informed decision as to whether the student or parent would like to accept any disbursement of loan funds
  •  Request confirmation of any post-withdrawal disbursement that the student or parent, as applicable, wishes the school to make
  • The school must document the result of the notification process and the final determination made concerning the disbursement, and maintain that documentation in the student’s file. Once a school has received confirmation from a student, or the student’s parent in the case of a PLUS Loan, that they want to receive the post-withdrawal disbursement of loan funds, a school must make the post-withdrawal disbursement of Title IV loan proceeds as soon as possible, but no later than 180 days after the date of the school’s determination that the student withdrew.

For Further Guidance
For a more comprehensive treatment of the R2T4 regulations, readers should turn to the most recent FSA Handbook, Volume 5 “Over awards, Overpayments and Withdrawal Calculations”. Here you will find extended discussion of each element of the R2T4 calculation with definitions, examples, worksheets, case studies and regulatory citations to assist in a better understanding of this process. Additional guidance can be found in Dear Colleague Letters GEN-04-03 (February 2004), GEN-00-24 (December 2000), and GEN-98-28 (November 1998). This guidance is easily referenced at