The student has officially withdrawn from the school. It is after the 60 percent point of the term. Is a return of Title IV (R2T4) calculation necessary?
It depends. Regardless of when the student withdraws, a return of Title IV funds (R2T4) calculation must be performed if all Title IV aid was not already disbursed prior to the withdrawal. If all aid was already disbursed, the financial aid administrator can just note in the student's file that no R2T4 calculation is required after the 60 percent point (60%) and all aid was disbursed, so there cannot be a post-withdrawal disbursement (PWD).
If a student withdraws on or before the 60 percent point in the payment period or period of enrollment, the R2T4 calculation must be performed to determine whether the student has earned a portion of his Title IV aid for the period, as well as to determine if the student is due a PWD of Title IV aid. After the 60 percent point, the student has earned 100 percent of his aid, so there is no calculation to determine unearned aid and no aid must be returned. However, if all Title IV aid was not disbursed prior to withdrawal, the R2T4 calculation still must be performed after a student has reached the 60 percent point of the period to determine if the student or parent PLUS borrower would be eligible for a PWD. While the school is not required to complete the entire R2T4 calculation worksheet, it must complete through Step 3 of the R2T4 calculation worksheet for credit-hour programs and through Step 4 of the worksheet for clock-hour programs. It must then complete the Post-Withdrawal Disbursement Tracking Sheet if instructed by the R2T4 calculation that the student or parent is due a PWD.
For more on post-withdrawal disbursements, see 34 CFR 668.22(a)(5)-(6) and guidance starting in Volume 5, Chapter 2 of the FSA Handbook. See also Case Study 1 and the sample worksheets in Volume 5, Chapter 3 of the FSA Handbook.
For additional information, try the Student Aid Reference Desk. It is a central hub of all the important financial aid resources you need with direct links to legislation, regulation, Dear Colleague Letters, and other ED and NASFAA references. It is updated on a rolling basis with the latest news and changes. Search Return of Title IV Funds.
Publication Date: 10/11/2022