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Withdrawal and Return of Title IV Funds (R2T4) Policy


PURPOSE

Federal regulations require Title IV financial aid funds (grant or loan) be awarded under the assumption that a student will attend the institution for the entire period in which federal assistance was awarded. When a student withdraws from all courses for any reason, including medical withdrawals, he/she may no longer be eligible for the full amount of Title IV funds that he/she was originally scheduled to receive. The return of funds is based upon the premise that students earn their financial aid in proportion to the amount of time in which they are enrolled. A pro-rated schedule is used to determine the amount of federal student aid funds he/she will have earned at the time of the withdrawal. Once a student completes over 60% of the semester they are considered to have earned all of their financial aid and will not be required to return any funds.

WKU is required to determine the earned and unearned portions of Title IV aid as of the date the student ceased attendance based on the amount of time the student spent in attendance.

Federal law requires schools to review and calculate how much federal financial aid a student has earned if that student:

  • completely withdraws, or        
  • stops attending before completing the semester and earns grade of "FN", or        
  • does not complete all modules (courses which are not scheduled for the entire semester or payment period for which he/she has registered at the time those modules began).

Based on this calculation, Western Kentucky University (WKU) students who receive federal financial aid and do not complete their classes during a semester or term could be responsible for repaying a portion of the aid they received. If a student withdraws from courses, the school, student, or both parties may be required to return some or all of the federal funds awarded for the semester.

Further, academic policies on leaving WKU are available in the on-line Catalog.  It is also important to note that Western Kentucky University's tuition/fee refund policy is separate from the federal regulations to repay unearned aid. Whether or not a student receives a tuition/fee refund has no bearing on the amount he/she must repay to the federal aid programs.


POLICY

Students who receive federal financial aid must "earn" the aid they receive by completing the courses for which aid was awarded. The amount of federal financial assistance the student earns is on a pro-rated basis based upon days attended. Students who withdraw or do not complete all registered WKU classes during the semester may be required to return a portion of the financial aid they were awarded.

WKU is required to determine the percentage of Title IV aid ''earned" by the student and to return the unearned portion to the appropriate aid programs. Regulations require schools to perform calculations within 30 days from the date the school determines a student's complete withdrawal. The school must return the funds within 45 days from the date the school determines a student’s complete withdrawal. The R2T4 calculation process and return of funds is completed by the Department of Student Financial Assistance hereafter referred to as SFA.

The following formula is used to determine the percentage of unearned aid that has to be returned to the federal government:

  • The percent earned is equal to the number of calendar days completed up to the withdrawal date, divided by the total calendar days in the payment period (less any scheduled breaks that of five days or longer).         
  • The payment period for most students is the entire semester. However, for students enrolled in modules (courses which are not scheduled for the entire semester or term), the payment period only includes those days for the module(s) in which the student is registered.         
  • The percent unearned is equal to 100 percent minus the percent earned.

For Students Enrolled in Modules

A student is considered withdrawn if the student does not complete all of the days in the payment period that the student was scheduled to complete.  SFA will track enrollment in each module (a group of courses in a program that do not span the entire length of the payment period combined to form a term, for example, summer sessions) to determine if a student began enrollment in all scheduled courses. If a student officially drops courses in a later module while still attending a current module, the student is not considered as withdrawn based on not attending the later module. However, the student has experienced a change in enrollment status and a recalculation of aid may be required based upon applicable program regulations and school policies.

Students who are not presently attending courses at the time of a change in enrollment are given the opportunity to provide written confirmation to SFA of their intentions for further attendance later in the term.  If the student confirms in writing that they plan to attend another course later in the same payment period, they are not considered to have withdrawn from the term.  If the student does not provide written confirmation of plans to return to school later in the same payment period or term, SFA considers the student to have withdrawn and begins the R2T4 process immediately.  It may be necessary to first recalculate aid for courses that the student failed to attend based upon applicable program regulations.  However, if the student does return to WKU in the same term, even if they did not provide written confirmation of plans to do so, the student is not considered to have withdrawn and regains eligibility for Title IV funds for which the student was eligible before ceasing attendance.  SFA will then reverse the R2T4 process and award funds that the student is eligible to receive at the time of return.

Program integrity principles
  • Title IV funds are awarded to a student to attend an entire payment period or period of enrollment, and the funds are intended to cover the student's educational and living expenses for the entire period.         
  • Federal law specifies that a student earns Title IV funds on a pro-rated basis through 60 percent of a period based on the actual days completed. For the purposes of federal aid programs, WKU must be able to document a student's active participation in an academic activity.
Regulatory requirements
  • A student is considered to have withdrawn from a payment period or period of enrollment in which the student began enrollment if the student ceased attendance in all scheduled courses without completing all of the days the student was scheduled to complete in the period.
  • However, if a student provides written confirmation to WKU before ceasing attendance that the student plans to attend another course later in the same period, the student is not considered to have withdrawn. For a nonstandard-term or non-term program, the next course the student plans to attend during the period must begin within 45 days after the end of the course the student ceased or failed to attend in order for the student not to be considered withdrawn. If a student does not resume attendance within the scheduled timeframe, the student is considered to have withdrawn as of the date on which attendance ceased.
  • If a student does not provide written confirmation of plans to return to school later in the same period, a school considers the student to have withdrawn and performs a return of Title IV funds (R2T4) calculation to determine if any funds must be returned. However, if the student does return to school in the same period — even if the student did not provide written confirmation of plans to do so — the student is not considered to have withdrawn and is eligible to receive Title IV funds for which the student was eligible before ceasing attendance. WKU must reverse the R2T4 process and provide any additional funds the student is eligible to receive at the time of return.
  • If a student enrolled in a term-based, credit hour program offered in modules who withdrew without confirming intent to return to a module later in the period of enrollment re-enters the same program prior to the end of the period of enrollment, the student is treated as he/she did not cease enrollment.
  • This new rule replaces prior guidance provided in Dear Colleague Letter GEN-00-24 regarding student withdrawals in term-based programs that include courses shorter than the length of an entire term.
  • The rule impacts all programs offering courses shorter than an entire term, including semester-based programs with a summer term consisting of two consecutive six-week summer sessions.

Determining institutional Charges

Institutional charges are used as a component in the calculation to determine the portion of unearned Federal Student Aid that WKU is responsible for returning. Title IV program funds are used to pay institutional charges ahead of all other sources of aid. The institutional charges used in the calculation are always the charges that were assessed the student for the entire period of enrollment prior to the student's withdrawal. Application fees are excluded from institutional charges because they are not an educational cost. Student's institutional charges are generally defined as charges for tuition and fees, room and board and other educational expenses that are paid to the school directly.

 WKU does not include books, supplies, equipment, and materials as institutional charges because students are able to purchase these materials at convenient locations not affiliated with WKU.  Students are provided options for acquiring books, etc using financial aid funds in a way and at a time that makes it possible for students to purchase the materials in a timely manner.

Generally, it may be found in most situations that the higher the total of institutional charges, the greater the amount of unearned aid that is to be returned by the school.


Performing Return of Title IV Funds Calculation

Step 1 - Student's Title IV Information:

SFA will determine:

  • The total amount of Title IV aid disbursed for the semester in which the student withdrew. A student's Title IV aid is counted as aid disbursed in the calculation if it has been applied to the student's account on or before the date the student withdrew.
  • The total amount of Title IV aid disbursed plus the Title IV aid that could have been disbursed for the semester in which the student withdrew.
 
Step 2 - Determination of Withdrawal Date and Percentage of Title IV aid earned:

The withdrawal date used in the return calculation of a student's federal financial aid is the actual date indicated on the official drop form or through our electronic records system TOPNET as the date they officially withdrew themselves from a course. If a student unofficially withdrawals and stops attending classes without notifying WKU, the withdrawal date will be the latest date of academic activity reported by the instructor.

Types of withdrawals

For financial aid purposes there are two types of withdrawals: Official and Unofficial.  WKU is not required, nor does it require instructors to take attendance throughout an entire semester, therefore it is considered an institution that is not required to take attendance.

Official

  • A student who ceases attendance at WKU as of the date the institution determines
    • The student began the withdrawal process prescribed by the institution
    • The student otherwise provided official notification to the institution in writing or orally of their intent to withdrawal

Unofficial

  • A student who ceases attendance at WKU without notifying the institution
    • The student receives all failure due to non-attendance (FN) grades and/or withdraw (W) grades for the term (must be determined no later than 30 days after the end of the period of enrollment).
    • The student failed to notify WKU of withdrawal or non-attendance due to circumstances beyond the student’s control (in such case the date related to the circumstance would be considered the withdrawal date).

In order to document attendance for example in a distance education course, simply logging into an online class is not sufficient. The student must demonstrate he/she participated in class or was otherwise engaged in an academically related activity (contributing to an online discussion or initiating contact with a faculty member to ask a course-related question).

Defining academically related activity

Examples of academic-related activities include but are not limited to physically attending class where there is an opportunity for direct interaction between the instructor and students.

 Proof of participation (but not limited too)

  • Physically attending a class where there is opportunity for direct interactions between students and instructor;
  • Submitting academic assignments
  • Taking an exam, interactive tutorial or computer-assisted instruction
  • Attending a required study group
  • Participating in an online discussion about academic matters
  • Initiating contact with a faculty member to ask a question about the academic subject studied in the course

 Documentation not acceptable as proof of participation

  • Student's self-certification of attendance that is not supported by school documentation
  • Logging into an online class without active participation
  • Living in campus housing
  • Participating in the school's meal plan
  • Participating in academic counseling or advising

Calculating percentage of Title IV Aid earned

SFA will calculate the percentage of Title IV aid earned as follows:

The number of calendar days completed by the student divided by the total number of calendar days in the semester in which the student withdrew. The total number of calendar days in a semester shall exclude any scheduled breaks of more than five days.

Days Attended ÷ Days in Enrollment Period = Percentage Completed

If the calculated percentage completed exceeds 60%, then the student has "earned" all the Title IV aid for the enrollment period.

 

Step 3 - Amount of Title IV aid earned by the student:

SFA will calculate the amount of Title IV aid earned as follows:

The percentage of Title IV aid earned (Step 2) multiplied by the total amount of Title IV aid disbursed or that could have been disbursed for the term in which the student withdrew (Step 1).

Percentage of Period Completed X Total Aid Disbursed = Earned Aid

 

Step 4 - Amount of Title IV aid to be disbursed or returned:
  • If the aid already disbursed equals the earned aid, no further action is required.         
  • If the aid already disbursed is greater than the earned aid, the difference must be returned to the appropriate Title IV aid program.

 Total Disbursed Aid – Earned Aid = Unearned Aid to be Returned

  • If the aid already disbursed is less than the earned aid, then SFA will calculate a post-withdrawal disbursement.

 

Step 5 – Amount of Unearned Title IV aid due from the school:
  • Institutional charges are calculated and totaled based upon policy and federal requirements listed previously in the policy section.
  • Percentage of unearned aid is calculated by subtracting the percentage of earned aid (Step 2) from 100.

100% - Percentage of Earned Aid = Percentage of Unearned Aid

  • Unearned charges are calculated based upon multiplying the total institutional charges by the percentage of unearned aid.

Total of Institutional Charges X Percentage of Unearned Aid = Unearned Charges

  • The amount of aid for which the school is responsible to return is calculated by comparing the amount previously calculated as aid to be returned (Step 4), to the amount of unearned charges. The lesser of the two is the amount for the school to return.

 

Step 6 – Return of Funds by School:

Federal regulations and Institutional policy require that the following aid programs be subject to the repayment calculation if the student did not attend in excess of 60% of the term.  The school must return unearned aid for which the school is responsible (Step 5) by repaying funds to the following sources, in order, up to the total net amount disbursed from each source:

  • Federal Direct Unsubsidized Loans
  • Federal Direct Subsidized Loans
  • Federal Perkins Loans
  • Federal Direct Grad PLUS Loans
  • Federal Direct Parent PLUS Loans
  • Federal Pell Grant
  • Academic Competitiveness Grant
  • National SMART Grant
  • Federal Supplemental Educational Opportunity Grant (FSEOG)
  • TEACH Grant
  • Iraq and Afghanistan Service Grant

 FWS funds are not included

School and student responsibility for return of unearned federal funds

SFA is responsible for returning unearned federal financial aid to the federal government via COD. The student will be billed for any amount due as a result of the return of federal aid funds (R2T4) calculation. If the student owes any money to WKU resulting from the return of federal or institutional funds, the student will be billed by the WKU Bursar's Office.  SFA will mail a notification letter with the repayment amount(s) to the student's permanent address.

If a student does not pay funds due to WKU to cover their Bursar balance, the student's records will have a Bursar's Office hold placed on his/her account. This means they will not be permitted to register for classes, receive transcripts or submit a financial aid appeal for Title IV until the balance is paid.  

 

Step 7 – Amount of Unearned Title IV Aid Due from Student:
  • Calculated by subtracting the amount of funds to be returned (Step 4) from the amount calculated for the school to return (Step 5).
  • If the amount calculated is less than or equal to zero no further action is required past this step.
  • If the amount calculated is greater than zero further action is required.

 

Step 8 – Repayment of Student Loans:
  • Calculated by subtracting total of loans the school must return (Step 6) from the net amount of loans disbursed (Step 1).
  • If the amount of unearned aid due from the student (Step 7) is less than or equal to the amount calculated as the amount for repayment of student loans (Step 8), then no further action is required past this step.
  • If the amount of unearned aid due from the student (Step 7) is greater than the amount for repayment of student loans (Step 8) then further action is required.

 

Step 9 – Grant Funds to be Returned:
  • Initial amount of Title IV grants for student to return is calculated by subtracting the amount of loans to be repaid by the student (Step 8) from the initial amount of unearned Title IV aid due from the student (Step 7).
  • The amount of Title IV grant protection is calculated by multiplying the total of Title IV grant aid that was disbursed (Step 1) by the amount of 50%.
  • The Title IV grant funds for the student to return is finally calculated by subtracting the amount of Title IV grant protection (Step 9) from the initial amount of Title IV grants for the student to return (Step 9). If this amount is less than or equal to zero, no further action is required past this step.  If this amount is not less than or equal to zero, then further action is required.

 

Step 10 – Return of Grant Funds by the Student:
  • Students must return unearned grant funds for which they are responsible (Step 9). The grant funds returned by the student up to the amount disbursed from the program minus any grant funds the school is responsible for returning to that program (Step 6) are applied in order as indicated:
    • Pell
    • Academic Competitiveness Grant
    • National SMART Grant
    • FSEOG
    • TEACH Grant
    • Iraq Afghanistan Service Grant

Steps in determining a Post-withdrawal disbursement

Any undisbursed Title IV aid for the period that WKU uses as the basis for the return calculation is counted as aid that could have been disbursed as long as the following were met before the date the student became ineligible-

  • For all programs, the Department processed a SAR or ISIR with an official EFC for the student
  • For an FSEOG award, WKU made the award to the student
  • For a DL, WKU certified or originated the loan
  • For Perkins loan, WKU made the award to the student

A promissory note must be signed for a loan to be included as "Aid that could have been disbursed" in the return calculation.

WKU is required to make Post-withdrawal disbursements in consideration of R2T4 regulations and requirements as well as late disbursement rules considering the 180 day late disbursement rules when applicable. The disbursement must be made from available grant funds before available loan funds. WKU cannot require a student who has withdrawn to pick up a Post withdrawal disbursement in person. WKU must obtain confirmation from a student or parent for PLUS before making any disbursement of loan funds from a post-withdrawal disbursement. Without obtaining students' permission, Title IV grant funds from post-withdrawal disbursement are credited to their account to pay for tuition, fees, room and board or disbursed directly to the student. This is allowed up to the amount of outstanding charges.

WKU must notify a student or parent for PLUS loan, in writing before making any post-withdrawal disbursements within 30 days of the date WKU determines a student withdrew. (See FSA HB June 2012 5-85 for information WKU must provide). The response does not have to be in writing, but WKU must document the response.

WKU may not disburse the proceeds of a PLUS loan taken out by a parent who has died, even though student for whose benefit the loan was intended remains alive and otherwise eligible.

WKU must maintain written records of post withdrawal disbursements. 


Withdrawing prior to completing 60% of a term

Unless a student completes more than 60 percent of the term in which federal aid was disbursed, the student will be required to return all or part of the financial aid disbursed in the term. This applies to students who have officially (including medical), or unofficially withdrawn.


When a student fails to begin attendance

If a student receives financial aid, but never begins attendance in classes, SFA must return all disbursed funds to the respective federal and institutional aid programs if funds were in fact disbursed.


Students who receive all FN grades at the end of the term

Financial aid is awarded under the assumption that the student will attend WKU for the entire term for which federal assistance was disbursed. When the student has earned a grade of FN in each class for the term, the student is considered to have unofficially withdrawn and a return will be processed based on the latest date reported by an instructor with regard to academically related activity. WKU will return the calculated amount to the federal program and the student's bursar account will be charged the amount and the student will be responsible for any balance due.

If the student can prove to have participated in a WKU class or academic-related activity past the 60% date, the student will not be required to return any disbursed financial aid. The student's bursar account will be updated and the student will be responsible for any other charges that may have been applied to their account.

Students who are able to verify attendance beyond WKU's records may submit supporting documentation to SFA. The student must submit supporting documentation within 30 days from the last date of the term. Recalculations for aid eligibility will not be performed for documentation received after that date.

Students who receive all F grades, but are not reported by the instructor as failures for non-attendance and therefore not issued a grade of FN, are considered to have actually attended the courses and in fact earned the failing grades.


Student notification of repayment

A notification letter outlining the amount returned to the federal and institutional program(s) will be mailed to the student's permanent address from SFA in coordination with the Office of the Bursar. WKU will return funds on the student's behalf to the appropriate federal and institutional aid program(s) and subsequently will bill the student's bursar account. A statement reflecting these charges will be sent to the student. The Bursar's office will send an email notification to the student's University account if the semester has not ended and will send a letter to the student's permanent address if the semester has ended. The student is responsible for all charges and overpayments resulting from a Return of Title IV calculation.


Responsibilities in Regard to R2T4 Policy & Processes

 WKU's responsibilities in regard to the Return of Title IV funds:

  1. Providing each student with the information given in this policy;
  2. Identifying students affected by this policy and completing the Return of Title IV Funds (R2T4) calculation;
  3. Informing the student of the result of the R2T4 calculation and any balance owed to WKU as a result of a required return of funds;
  4. Returning any unearned Title IV aid that is due to the Title IV programs and, if applicable, notifying the borrower's holder of federal loan funds of the student's withdrawal date;
  5. Notifying student and/or Plus borrower of eligibility for a Post-Withdraw Disbursement, if applicable.

Student's responsibilities in regard to the Return of Title IV funds:

  1. Becoming familiar with the Return of Title IV Funds (R2T4) policy and how withdrawing from all courses effects eligibility for Title IV aid;
  2. Resolving any outstanding balance owed to the WKU resulting from a required return of unearned Title IV aid;
  3. Resolving any repayment to the U.S. Department of Education as a result of an overpayment of Title IV grant funds.

Consumer Information

WKU must include a statement of:        

  • WKU refund policy
  • Requirements for the treatment of Title IV funds when a student withdraws
  • Requirements and procedures for officially withdrawing from WKU         

How institutional grant aid is affected by a withdrawal

All institutional aid provided by WKU is based on need and/or academic achievement. Any change in enrollment status may cause the amount of the award to be recalculated.

Student Financial Assistance
317 Potter Hall
Western Kentucky University
1906 College Heights Blvd. #11018
Bowling Green, KY 42101-1018

Phone: 270-745-2755

Fax: 270-745-6586

Email: fa.help@wku.edu


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 Last Modified 5/8/18