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 ceases attendance from all courses, for any reason, they may no longer be eligible for the full amount of Title IV funds that they were 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 attended. A pro-rated schedule is used to determine the amount of federal student aid funds earned at the time of the withdrawal (ceased attendance). Once a student has completed more than 60% of a semester, the student is considered to have earned all of the financial aid and will not be required to return any funds. However, the school must still perform a R2T4 to verify the percentage of unearned aid each time a student withdraws.

As an attendance taking institution, the date of the school’s determination that the student withdrew will be no later than 14 days after the student’s last date of attendance, as determined by the school from its attendance records.  GLBBS monitors attendance daily and will verify missing days with the faculty members on a weekly basis.  Students who miss two consecutive days of attendance or four cumulative days of attendance per semester will be contacted by the Registrar and will be considered as an unofficial withdrawal, who will then notify the Financial Aid Office to place a hold on the student’s account until the attendance review is completed and the student has been determined to be an unofficial withdrawal.

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

• ceases attending (officially/unofficially) before completing the period of enrollment, or
• remains enrolled in only non-Title IV eligible courses, or
• does not complete all phases of instruction or periods of instruction (courses that do not span the entire length of the semester), or
• completely withdraws (ceases attendance for any reason)

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

Intent to Withdraw for a future period – An official withdrawal is a withdrawal in which the student completes the Official Withdrawal Request Form or notifies the school in writing of their intent to withdraw. To officially withdraw from GLBBS for a future semester, a student may complete the Official Withdrawal Request Form and submit it to the Operations Office.  An official withdrawal also includes administrative withdrawals and dismissals.

Unofficial withdrawal – An unofficial withdrawal is a withdrawal in which the student ceases attendance prior to the completion of a semester but does not begin the official withdrawal process or notify the school of their intent to withdraw. Additionally, a student may be determined to have unofficially withdrawn from the institution if the student receives all failing grades or a combination of all failing grades and withdraw grades for the semester.

DETERMINING THE DATE THE STUDENT WITHDREW

The date of withdrawal is the date the student began Great Lakes Boat Building School’s official withdrawal process or ceased attendance. If the student provides official notification of their intent to withdrawal to the Operations Office, the date the student provides notification is the date of the withdrawal. If a student notifies the office in writing, the date of withdrawal is the date that GLBBS receives the letter or Official Withdrawal Request Form.

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, GLBBS 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: GLBBS will use the documented last date of attendance at an academically related activity as a student’s withdrawal date for Title IV aid. 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.

EARNED AND UNEARNED TITLE IV FUNDS

Students who receive federal financial aid must “earn” the aid by completing the semester for which the aid was received. Students who withdraw or do not complete all registered classes during the semester 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.

Funds must be returned by Great Lakes Boat Building School in this order (if applicable):

• Unsubsidized Direct Loans (other than Direct Plus Loans),
• Subsidized Direct Loans,
• Direct PLUS Loans (parent or graduate),
• Federal Pell Grants for which a return of Title IV funds is required,
• Iraq and Afghanistan Service Grant, for which a return of Title IV funds is required,
• FSEOG for which a return of Title IV funds is required.

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 determined by:

1. Determining the scheduled start date and end date of the semester.
2. Calculating the number of days in the semester.
3. Excluding scheduled breaks of five days or more.

• The date of a student’s withdrawal (based on reported attendance).

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 semester.

Example: Student started class on Sept. 14 and attended through October 20, completing 37 days divided by 101 total days in the semester = 36.7%

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: 36.7% multiplied by $5,750 = $2,110

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: $5,750 – $2,110 = $3,640

If the aid already disbursed is less than the aid earned by the student, the Financial Aid Office 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 in writing about the Title IV aid returned (by types and amounts) by the institution and be reminded of their obligation to pay any federal student loan they have received.

Step 9: 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, the institution will typically* repay the applicable federal student aid program on the student’s behalf. This will prevent the student from being in an over-award situation with the U.S. Department of Education.  However, the student will still owe any returned funds to the institution.

Step 10:  If the R2T4 calculation results in a credit balance owed to the student, the student will receive the funds no later than 14 days after the refund calculation is completed (within the required timeframe).

STUDENT RESPONSIBILITY FOR REPAYMENT OF UNEARNED FUNDS

As noted above, the school will typically* return any unearned grant funds for which the student is responsible to the U.S. Department of Education on behalf of the student. Then the student would 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 Pell Overpayment Title IV debt).

*The school could determine that the student must return the unearned Pell Grant directly to the government, creating a Pell Overpayment of Title IV debt.  The student would be notified in writing within 30 days of the determination that the student is responsible to repay unearned funds within 45 days of notification. If it is not repaid within 45 days, the student will be reported as having received an overpayment and will not be eligible for federal Title IV funds at any school until this is repaid. You do not have to repay a grant overpayment if the original amount of the overpayment is $50 or less.

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 student loans, please click here.

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 and merit. Any change in enrollment status may cause the amount of the award to be recalculated.  For most institutional funds, the refund will follow the institutional refund rules.  A student is responsible for repaying aid for which they are considered ineligible.

POST WITHDRAWAL DISBURSEMENT

When a student withdraws from the school, he or she generally becomes ineligible for future disbursements of federal financial aid. In some cases, however, funds earned prior to withdrawal can be offered to the student through a post-withdrawal disbursement (PWD).  To explain what happens with a withdrawn student who is eligible to receive a PWD of federal financial aid, and the process for disbursing those funds, see PWD.

NOTICE OF FUND REPAYMENT FROM GLBBS AFTER WITHDRAWAL

GLBBS will notify a student whether they owe money back to the school or to the government within 30 days of determination of a withdrawal. Loan money owed to the government is repaid according to the terms of the promissory note.  Unearned Pell Grant funds will typically be returned by the school and must be repaid to the school.  However, if it is determined that there is unearned Pell Grant that is owed directly to the government, the student is responsible to repay those funds within 45 days. If it is not repaid within 45 days, the student will be reported as having received an overpayment and will not be eligible for federal Title IV funds at any school until this is repaid. The student does not have to repay a grant overpayment if the original amount of the overpayment is $50 or less.

Please note that the student must meet eligibility requirements of federal aid in order for the funds to be counted in the calculation. For example, first-time, first-year borrowers must complete 30 days of the semester in order to be eligible for any Direct Loan funds. If 30 days have not been completed, the student is not entitled to any portion of these funds.

If the student did not receive all of the funds that they earned, they may be due a post-withdrawal disbursement. See PWD for more information.  If a student’s post-withdrawal disbursement includes loan funds, GLBBS must get their permission before it can disburse the funds. The student may choose to decline some or all of the loan funds so that they don’t incur additional debt. GLBBS may automatically use all or a portion of the student’s post-withdrawal disbursement of grant funds for tuition, fees, and other charges (if contracted with GLBBS). GLBBS needs the student’s permission to use the post-withdrawal grant disbursement for all other school charges. If the student does not give their permission, they will be offered the funds. However, it may be in the student’s best interest to allow GLBBS to keep the funds to reduce their debt at the institution.

EXIT COUNSELING

The United States Department of Education requires all students who have received a Direct Loan from GLBBS to complete Exit Loan Counseling. A student must complete Exit Loan Counseling when they exit the school, drop to less than half time enrollment status or graduate. Exit Loan Counseling informs the student of their rights and responsibilities regarding the repayment process. See Exit Counseling for more information.