Withdrawal and Return to Title IV (R2T4)
Federal student aid programs are authorized under Title IV of the Higher Education Act of 1965. Federal student aid programs include the PELL Grant, Supplemental Educational Opportunity Grant, Direct Stafford Loans, Direct PLUS Loans and Federal Work Study. These programs are also known as Title IV funds.
Title IV funds are 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, he/she may no longer be eligible for the full amount of Title IV funds that he/she was originally scheduled to receive or did receive. Federal regulations require that an institution perform a calculation for students who cease attendance to determine if Title IV funds should be returned to the U.S. Department of Education. 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 earned at the time of the withdrawal. Once a student has completed more than 60% of a payment period (typically a quarter) or period of enrollment, the student is considered to have earned all of the financial aid and will not be required to return any funds.
Federal law requires schools to calculate how much federal financial aid a student has earned if that student:
- ceases attending before completing the payment period or period of enrollment, or
- remains enrolled in only non-Title IV eligible courses, or
- does not complete all modules (courses that do not span the entire length of the payment period or period of enrollment), or
- completely withdraws
Students who receive financial aid but never attend class or establish eligibility for the aid they have received must return all disbursed funds. A student must first establish eligibility for Title IV funds before they can be considered as having "earned" a portion of those funds.
Types of Withdrawals
Official withdrawal – An official withdrawal is a withdrawal in which the students complete the official withdrawal process or notifies the school of their intent to withdrawal. To officially withdraw, a student may complete the online withdrawal form on the LLU website. Please refer to Official Withdrawals on University Records website for information on how to withdrawal. An official withdrawal also includes administrative withdrawals.
Unofficial withdrawal – An unofficial withdrawal is a withdrawal in which the student ceases attendance prior to the completion of a payment period or period of enrollment but does not begin the official withdrawal process or notify the school of their intent to withdrawal. Additionally, a student may be determined to have unofficially withdrawn from the institution if the student receives all fail grades or a combination of all failing grades and withdraw grades for the payment period or period of enrollment.
Earned and Unearned Title IV Funds
Students who receive federal financial aid must "earn" the aid by completing the payment period or period of enrollment for which the aid was received. Students who withdraw or do not complete all registered classes during the payment period or period of enrollment may have "unearned" aid that must be returned to the applicable federal student aid program. Institutions are required to perform a calculation, to determine the amount of earned and unearned aid, within 30 days from the date the school became aware of the student's withdrawal. That calculation, known as the Return to Title IV (R2T4) Calculation, is a federal formula which will determine the amount of earned aid in addition to the amount of unearned aid due from the institution and the student.
R2T4 Calculation Elements
The following elements will be used in an R2T4 Calculation:
- Net amount of aid disbursed from a Title IV Grant or Loan Program
- Net amount of aid that could have been disbursed from a Title IV Grant or Loan Program
- The number of days in the payment period or period of enrollment determined by:
- Determining the scheduled start date and end date of the payment period or period of enrollment.
- Calculating the number of calendar days in the payment period or period of enrollment.
- Excluding scheduled breaks of five days or more.
- The date of a student's withdrawal.
R2T4 Calculation Steps
Step 1: Determine the amount of Title IV aid that disbursed or could have been disbursed.
Step 2: Divide the number of eligible and completed days by the total number of eligible days in the payment period or period of enrollment.
Example: 38 completed days divided by 75 total days = 50.7%
The calculated percentage is the percentage of aid for which the student is eligible.
Important: If the percentage is greater than 60%, the student is eligible for all aid received.
Step 3: Multiply the percentage calculated in step 2 by the amount of aid in Step 1 to determine the amount of aid for which the student is eligible.
Example: 50.7% multiplied by $6,760 = $3,427.32
Step 4: Determine the amount of unearned aid by subtracting the earned aid from the aid in Step 1. The resulting amount is the unearned aid due from the school or the student.
Example: $6,760 - $3,427.32 = $3,332.68
If the aid already disbursed is less than the aid earned by the student, the Office of Financial Aid will determine if the student is eligible for a post-withdrawal disbursement of aid.
Step 5: Determine the amount of unearned Title IV aid (see Step 4) due from the school.
Step 6: The school must return the unearned aid for which the school is responsible within 45 days of completing the calculation.
Step 7: Determine the amount due from the student by subtracting the amount returned by the school from the amount of unearned Title IV aid (see Step 4).
Step 8: The student may repay the amount of unearned Title IV loans according to the terms of the borrower's promissory note. The school will notify the holders of the loans of the student's withdrawal date. The student must complete exit counseling. In addition, the student will be notified about the Title IV aid returned by the institution and be reminded of their obligation to pay any federal student loan they have received.
Step 9 and 10: If the student is determined to have received more grant aid than they were determined to have earned, the grants will be calculated to determine if the student must return unearned grant funds. Federal regulations allow for a 50% grant protection applied to any disbursed amount. If the student is determined to owe unearned grant funds, it is the policy of the institution to repay the applicable federal student aid program on the students behalf. This will prevent the student from being in an overaward situation with the U.S. Department of Education. The student will still owe any returned funds to the institution.
Determining the Date the Student Withdrew
The date of withdrawal is the date the student began Loma Linda University's official withdrawal process. If the student provides official notification of their intent to withdrawal to their Academic Dean's office or Program Director, the date the student provides notification is the date of the withdrawal. If a student notifies the designated office in writing, the date of withdrawal is the date that LLU receives the letter.
If the student is unable to provide notification of withdrawal due to circumstances beyond the student's control, the institution will determine the withdrawal date that most accurately reflects when the student ceased academic attendance due to the extenuating circumstance. For example, LLU may use the date of an accident if the accident is the catalyst for the student's withdrawal. The same procedure will be used if the institution is notified by a second party that the student is unable to attend the institution due to a situation beyond their control.
If the school administratively withdraws a student, the withdraw date is the last date of documented academically related attendance or the date of the action that led to the administrative withdrawal.
Important: The institution may also use the documented last date of attendance at an academically related activity as a student's withdrawal date. Academic related activities may include: physically attending a class, submitting an academic assignment, taking an exam, participating in an online discussion about academic matters, and initiating contact with a faculty member to discuss an academic subject related to the course being taught.
Date of Withdrawal for Clock Hour Students and Programs Required to Take Attendance
Withdrawals from clock hour programs and programs required to take attendance will always be based on the last date of attendance at an academically related activity. Additionally, a clock hour student is considered a withdrawal if he or she does not complete all scheduled clock hours and weeks of instructional time. The R2T4 formula will consider the number of clock hours scheduled to be completed during the period. Therefore, clock hour students are calculated on a pro rata basis of hours instead of days.
Return of Title IV Funds for Student Enrolled in Modules
Module courses are courses that do not span the entire length of the payment period or period of enrollment. Federal financial is based on your expected enrollment and anticipated costs for the entire payment period or period of enrollment.
A student is considered withdrawn from a module if the student ceases to attend all courses they were schedule to attend or fails to begin attendance in a course he or she was scheduled to begin attendance in while not attending any other course. Additionally, if a student ceases to attend a course but has a future course within the modular term, the student must provide written confirmation of future attendance to not have their federal student aid processed for withdrawal. If the student does not provide written confirmation of future attendance, their aid will be calculated using the R2T4 Calculation. The aid may be reinstated and the R2T4 reversed if the student begins documented attendance in the future course.
A student is not considered withdrawn if they drop future modules while in attendance; however, a recalculation of their federal student aid may be necessary.
Student Responsibility for Repayment of Unearned Funds
As noted above, the school will return any unearned grant funds for which the student is responsible. Therefore, the student should not owe a repayment of Title IV grant funds to the U.S. Department of Education; however, they may be billed for the amount of returned unearned grant funds by the institution (not considered a Title IV debt).
The student is responsible for paying any unearned loan funds they received for non-institutional charges. The student may repay the loans according to the terms and conditions of the promissory note. Failure to repay the loans may result in delinquency and/or default. For more information on the importance of repaying your loans, please visit https://www.home.llu.edu/campus-and-spiritual-life/student-services/financial-aid/repaying-your-student-loans.
Effect of Withdrawal on Other Forms of Financial Aid
State aid and other contract assistance will be handled by the terms and regulations governing the fund. Institutional aid is provided based on need. Any change in enrollment status may cause the amount of the award to be recalculated. A student is responsible for repaying aid for which they are considered ineligible.
Examples of How a R2T4 Calculation Affects a Students Federal Student Aid
Student A was enrolled in a standard term credit hour program for the Winter term that spans from January 6 to March 21. There are no institutionally scheduled breaks so the payment period has 75 days. The student submitted an official withdrawal form through myllu.edu on February 20. The date the student withdrew is February 20. The student had been charged $8,051 in tuition and fees and had received $13,285 in an Unsubsidized Stafford Loan.
The calculation to determine how much of the Federal Aid the student earned divides the total days in the payment period by the days the student completed. If the percentage is more than 60% the student is eligible to keep all of the aid.
Student A's withdrawal date (Feb 20) demonstrates that the student completed 46 days out of the 75 total days. Therefore, Student A earned 61.3% (46 /75 = 61.3%) and is eligible to keep all $13,285 of the Unsubsidized Stafford Loan.
Student B was enrolled in a standard term credit hour program for the Winter term that spans from January 6 to March 21. There are no institutionally scheduled breaks so the payment period has 75 days. The student submitted an official withdrawal form through myllu.edu on February 10 stating that he wanted to totally withdraw from the program. The student had been charged $5,600 in tuition and fees and had received $5,072 in an Unsubsidized Stafford Loan.
The calculation to determine how much of the Federal Aid the student earned divides the total days in the payment period by the days the student completed. If the percentage is more than 60% the student is eligible to keep all of the aid. If it is less than 60%, the amount of aid earned by the student is calculated using the percentage earned multiplied by the total aid received, rounded to the nearest dollar. The remaining amount of aid that has not been earned must be returned by the school.
Student B's date of withdrawal (Feb 10) demonstrates that the student completed 36 days out of the 75 total days. Therefore, Student B earned 48.0% (36 /75 = 48.0%) and is eligible to keep $2,435 (48.0% * $5,072 = $2,434.56) of the Unsubsidized Stafford Loan. The remaining unearned amount of $2,637 ($5,072 - $2,434.56 = $2,637.44) must be returned by the school and/or student.