RETURN OF TITLE IV US FEDERAL STUDENT LOAN FUNDS (R2T4)
If a student (undergraduate or graduate) withdraws from AUR and has received financial aid, the student will be expected to pay back the amount of the financial aid that was not earned. The amount that students must return is determined on a proportional basis up to 60% of the entire term. If the student completed 20% of the term, the student has earned 20% of the total aid scheduled to be received. If a student completed more than 60% of the term, all federal loan funding disbursed for the semester in question has been earned and therefore no return is required.
The Financial Aid office will conduct the R2T4 calculation and notify the student via email of the amount to be returned and by whom (school or student) as soon as possible but no later than 45 days after the withdrawal determination date. Please note that the student must return funds according to the terms of the promissory note (MPN).
For a student who does not begin attendance, the school must return any Title IV funds no later than 30 days after the date the school became aware that a student will not begin or has not begun attendance.
The withdrawal date is the date you inform the University you have chosen to withdraw. The Registrar’s Office records this date and notifies all necessary offices and/or individuals. This date is then used to calculate the amount of financial aid that must be returned.
Funds must be returned in the following order:
- Unsubsidized Federal Direct Stafford Loans
- Subsidized Federal Direct Stafford Loans
- Federal PLUS Loans received on behalf of the student or in the graduate student's name
Below are two examples of the calculations used to find the amount a student is expected to repay based on the date they withdrew:
Remus submits an official withdrawal form and ceases to attend class on January 30th. The term he withdrew from began on January 5th and lasted 70 days. Remus has attended 26 days and has therefore earned 37 percent of his financial aid (26 days divided by 70 days equals 37 percent).
Remus received in aid:
$1000 Unsubsidized Federal Direct Loans
$3500 Subsidized Federal Direct Loans
$4500 Total aid received
- The amount of aid earned is 37% x $4500 = $1665
- The amount of unearned aid is: $4500 - $1665 = $2835
- Remus was charged $2500 in tuition. Percentage of his unearned aid is: 100% - 37% = 63%. Therefore, $2500 in tuition x 63% = $1575.
- The amount Remus must return is the lesser amount of steps 2 and 3; therefore in this case it is $1575.
- Going by the order of funds to be returned, Remus would return first unsubsidized loans, and then subsidized, and finally Parent PLUS loans, until the total $1575 has been repaid.
Unsubsidized Federal Direct Stafford Loans: $1000 - $1000 = $0
Subsidized Federal Direct Stafford Loans: $3500 - $575 = $2925
Total Returned $1575
The total returned is the amount that will be billed to Remus’s student account from his aid.
The Registrar notified Financial Aid that Romulus was last recorded to have attended class on January 20th. The term he withdrew from began on January 5th and lasted 70 days. Romulus has attended 16 days and has therefore earned 23 percent of his financial aid (16 days divided by 70 days equals 23 percent).
Romulus received in aid:
$500 Unsubsidized Federal Direct Stafford Loans
$4500 Subsidized Federal Direct Stafford Loans
$5000 Total aid received
The amount of aid earned is 23% x $5000 = $1150.
- The amount of unearned aid is: $5000 - $1150 = $3850.
- Romulus was charged $1250 in tuition and $1000 in housing. Percentage of his unearned aid is: 100% - 23% = 77%. Therefore, $2250 x 77% = $1732.50.
- The amount Romulus must return is the lesser amount of steps 2 and 3; therefore in this case it is $1732.50.
- Going by the order of funds to be returned, Romulus would return first unsubsidized loans, and then subsidized, and finally Parent PLUS loans, until the total $1732.50 has been repaid.
Unsubsidized Federal Direct Stafford Loans: $500 - $500 = $0
Subsidized Federal Direct Stafford Loans: $4500 - $1232.50 = $3267.50
Total Returned $1732.50
The total returned is the amount that will be billed to Romulus’s student account from his aid.
If you did not receive all of the funds that you earned, you may be due a post-withdrawal disbursement. If your post-withdrawal disbursement includes loan funds, AUR must get your permission before it can disburse them. You may choose to decline some or all of the loan funds so that you don’t incur additional debt.
The student (or parent if a Parent PLUS loan) will be notified within 30 days of the date of determination of withdrawal of the opportunity to accept all or a part of the post-withdrawal disbursement. Upon receipt of a timely response from the student (or parent) (14 days from date of notification), AUR will disburse the loans and credit the student account within 180 days of the date of determination of the student's withdrawal date. If a response is not received within 14 from the date of notification, the post-withdrawal disbursement will not be made. Loans will be applied towards the outstanding semester charges on the student's account and may pay up to the amount of the allowable charges (i.e., tuition and fees). Any remainder will be paid directly to the student (or parent).
Some Title IV funds that were scheduled to be received cannot be disbursed once a student withdraws because of other eligibility requirements. For example, if a first-time, first-year undergraduate student and has not completed the first 30 days of your program before withdrawing, they will not receive any Direct Loan funds that would have been received had they remained enrolled past the 30th day. If a student receives (or AUR or a parent receives on the student’s behalf) excess Title IV program funds that must be returned, AUR must return a portion of the excess equal to the lesser of the following:
1. Your institutional charges multiplied by the unearned percentage of your funds, or
2. The entire amount of excess funds.
AUR must return this amount even if it didn’t keep this amount of your Title IV program funds. If AUR is not required to return all of the excess funds, you must return the remaining amount.
Any loan funds that you must return, you (or your parent for a Direct PLUS Loan) repay in accordance with the terms of the promissory note. That is, you make scheduled payments to the holder of the loan over a period of time. Any amount of unearned loan funds that you must return is called an overpayment.
The requirements for Title IV program funds when you withdraw are separate from the AUR Refund Policy. Therefore, you may still owe funds to AUR to cover unpaid institutional charges. AUR may also charge you for any Title IV program funds that the school was required to return. See the AUR Refund Policy on the website. AUR can also provide you with the requirements and procedures for officially withdrawing from school.
The Post-Withdrawal Disbursement notification will include the following information:
· notification of eligibility for a post-withdrawal disbursement
· amount of disbursement
· loan type
· your options to accept all or a portion of the disbursement
· instructions for accepting disbursement
· timing of disbursement
Approved Leave of Absence
An approved leave of absence for federal aid purposes is a temporary leave from the student’s program of study. It is a specific time period during a program when the student is not in attendance. This type of leave of absence must meet the specific requirements in order to be considered as a temporary interruption in a student’s education.
· Students must submit a written request to email@example.com. The request must include the reason for requesting an LOA, the student’s signature and date of the request.
· The LOA cannot exceed 180 days in any 12-month period. This is the maximum time frame allowed for an LOA, though students may return early from an LOA.
· Students must return to the same point in their program when they left AUR and began their LOA. Meaning, a student returning from the LOA must complete the semester they left to be eligible to receive subsequent disbursements. No additional charges or Title IV will be assessed for the completion of the semester.
· Students are expected to complete the required courses within reasonable time to receive credits and passing grades. If students are unable to complete the requirements of their classes, incomplete grades (INC) may be assigned and further conditions may apply.
- No Title IV loans will be disbursed to students while on LOA
- Title IV credit balances will be paid, according to Excess Funds Authorization, to student or parent when on LOA.
- No additional charges or Title IV assistance will be assessed for students on LOA.
If these requirements are met the student will be granted an LOA. If the student fails to meet the LOA requirements, the student will be treated as a withdrawal and AUR will be required to perform an R2T4 calculation. The student’s withdrawal date will be the date the student began the LOA. AUR may grant a student an LOA that does not meet the requirements to be on an approved for federal aid purposes. However, this will be considered a withdrawal for federal aid purposes.