Return of Federal Funds (R2T4)
If a student withdraws from all courses during a semester, regardless of the reason, federal regulations require Northwest Nazarene University (NNU) to determine the amount of Title IV Federal Aid the student has earned. The Title IV aid programs covered by this law are: Federal Pell Grants, Direct Loans (both subsidized and unsubsidized), Direct PLUS Loans, Federal Supplemental Educational Opportunity Grants (FSEOGs), Federal Perkins Loans, TEACH Grants, and Iraq and Afghanistan Service Grants.
Though a student's aid is posted to his or her account at the start of each period, funds are earned as the student completes the period. If a student withdraws during his or her expected term of enrollment, the amount of Title IV aid that the student has earned up to that point is determined by a specific formula. If the student received more assistance than has been earned at the time of withdrawal, the excess funds must be returned by the school and/or by the student to the federal government. This is referred to as a Return to Title IV (R2T4).
Federal regulations require a recalculation of financial aid eligibility if a student:
- officially withdraws from all courses for the semester;
- stops attending before the semester ends without officially withdrawing;
- fails all classes; and/or,
- does not complete all the sessions for which they were originally registered for in a period of enrollment.
Students who do not begin attendance in classes are not eligible for federal financial aid and must repay any federal assistance originally received.
The R2T4 calculation may result in the student and/or parents being responsible for directly returning additional loan amounts to the U.S. Department of Education.
Any amount of unearned grant funds that must be returned is called an overpayment. The maximum amount of a grant overpayment that must be repaid is half of the grant funds received or that were scheduled to be received. Grant overpayments of $50 or less do not need to be repaid. Arrangements can be made through NNU or the U.S. Department of Education to return the unearned grant funds.
Determing the Withdrawal Date
The withdrawal date to be used in the return to Title IV calculation will be the date the student begins the official withdrawal process or the student notifies a designated campus official acting in his or her official capacity in writing or orally of his or her intent to withdraw. If the official notification of withdrawal by the student is received more than 7 days after the last documented academically related activity, the date of the last academically related activity will be used as the withdrawal date." (FSA Handbook 5-58)
Determining the Amount of Federal Aid Earned
Students earn the Title IV aid they originally received by remaining enrolled in and participating in all classes for which they are registered. Participation may be through physical attendance or active participation such as submission of homework or participation in course discussions for online courses.
The amount of federal aid that has been earned is determined on a pro rata basis. For example, if 30% of the period of enrollment has been completed prior to withdrawal, the student has earned 30% of his or her aid, but has not earned the remaining 70%. Return of Title IV funds are based on this 70% unearned percentage.
Once a student has attended 60% of the semester for which he or she is registered, the student is considered to have earned all the financial aid originally awarded and will not be required to return any funds.
If the student received (or the student's parents received on the student's behalf) excess Title IV program funds that must be returned, NNU must return an amount equal to the lesser of:
- the student's institutional charges multiplied by the unearned percentage, or
- the student's Title IV program assistance multiplied by the unearned percentage.
Post-Withdrawal Disbursement of Title IV Funds
If a student does not receive all of the funds earned, the student may be due a post-withdrawal disbursement. Prior to disbursal of a post-withdrawal disbursement, the student must provide NNU with permission to do so. The student may choose to decline some or all of the loan funds so that no additional debt is incurred.
NNU is entitled to use all or a portion of the student's post-withdrawal disbursement of grant funds for tuition, fees, and room and board charges. The student must provide NNU with permission to use the post-withdrawal grant disbursement for all other school charges. If the student does not give NNU the requisite permission, the student will be offered the funds; however, this will result in a balance due to NNU.
For Students Enrolled in Modules
A student is considered withdrawn if the student does not complete all of the days in each session that the student was originally scheduled to complete. NNU tracks enrollment in each session that does not span the entire fall, spring, or summer semester and combines the sessions to determine the student's expected period of enrollment.
NNU determines if a student enrolled in a series of modules is a withdrawal and subject to recalculation of federal financial aid eligibility based on the following questions:
- After beginning attendance in the period of enrollment, did the student cease to attend or fail to begin attendance in a course he or she was scheduled to attend? If the answer is no, this is not a withdrawal.
If the answer is yes, then:
- Was the student still attending any other courses when the student ceased to attend or failed to begin attendance in a course? If the answer is yes, this is not a withdrawal.
If the answer is no, then:
- After ceasing to attend or failing to begin attendance in a course did the student confirm with NNU that he or she will be attending a course in a session beginning later in the enrollment period? If the answer is yes, this is not a withdrawal.
If the answer is no, this is a withdrawal and the R2T4 calculation will be performed.
The requirements for Title IV program funds when a student withdraws are separate from the NNU refund policy. Therefore, a student who withdraws may still owe funds to NNU to pay for outstanding institutional charges. NNU may also charge a student for any Title IV program funds that the school was required to return.