RETURN OF TITLE IV FINANCIAL AID POLICY (R2T4 POLICY)
The US Department of Education requires institutions to apply the Return to Title IV Funds policy for students withdrawing from a university who receive Title IV financial aid. The Title IV programs include: Federal Pell Grants, TEACH Grants, Direct Loans, and Direct Plus Loans.
The requirements for Title IV program funds when you withdraw are separate from any refund policy that the school may have. Therefore, you may still owe funds to the school to cover unpaid institutional charges. BYU–Hawaii will charge the student’s account for any Title IV program funds that BYU–Hawaii was required to return.
A student who withdraws after the 60% point of a semester is entitled to retain all Title IV aid for that semester. However, if the student withdraws prior to the 60% point of the term, unearned Title IV funds as determined by the federal policy must be returned to the various programs. These funds must be returned even if the University provides no refund to the student. This means the student could owe the University and/or the U.S. Department of Education a significant amount of money.
The return of Title IV aid is in the following order:
- Unsubsidized Direct Loans
- Subsidized Direct Loans
- Direct Parent PLUS Loans
- Federal Pell Grants
- TEACH Grants
34 CFR §668.22(b), 34 CFR §668.22(c), 34 CFR §668.22(i), 34 CFR §668.22(b), 34 CFR §668.22(h), 34 CFR §668.22(a) (5) and (6), 34 CFR §668.164(j).
If the student did not receive all of the funds that were earned prior to withdrawing, a post-withdrawal disbursement may be due. If the student is eligible for a post-withdrawal disbursement of a grant, it must be disbursed within 45 days. If the post-withdrawal disbursement includes loan funds, the student must give permission before the funds can be disbursed. Students will be notified within 30 days of the date of the withdrawal determination of any direct loan eligibility, or a parent for a Direct Parent PLUS Loan eligibility. Permission is required to use the post-withdrawal grant disbursement for all other school charges. If a post-withdrawal disbursement from a loan results in a credit balance, the credit balance will be refunded to the student and/or the parent in the case of a Direct Parent PLUS Loan as soon as possible, but no later than 14 days after the credit balance has occurred. The school must return the Title IV funds within 45 days of the date the school determines the student withdrew. 34 CFR §668.22(a) (5) (6), 34 CFR §164 (j).
Before processing a Return to Title IV Funds, the University must verify the student began attendance in all classes used to determine financial aid eligibility. The University will contact all instructors to verify class attendance. If a faculty member indicates that a student never attended, the University will first determine the student’s eligibility, calculate the Return of Title IV Funds, and then adjust the disbursed aid accordingly. As a result, the student may end up owing the institution for the amount of unearned aid initially disbursed to their student account. If the student never attended any classes, all aid will be canceled and the student billed for all outstanding charges.
Determining Earned Aid
Though your aid is posted to your student account at the start of each semester, funds are earned upon completion of the semester. Title IV financial aid is earned by the calendar day, not class day. This includes weekends, holidays, and breaks of less than five consecutive days. The University is required to determine the amount of Title IV aid the withdrawing student has earned and then either disburse any additional funds the student may be entitled to up to the amount earned, or return funds in excess of the amount earned which the student has already received.
When a student receiving Federal Title IV financial aid withdraws from BYU–Hawaii during the enrollment period, the amount of the Title IV funds that the student earned during the enrollment period is calculated as of the student's withdrawal date. Title IV funds are earned at a fixed rate on a per-day basis up to the 60 percent point in the enrollment period. Title IV funds are 100 percent earned if the withdrawal date is after the 60 percent point in that period. If the date a student withdraws from BYU–Hawaii is prior to or on the 60% point of the semester, BYU–Hawaii is required to determine the portion of the aid disbursed that was "earned" by the student before the withdrawal date. The "unearned" Title IV funds must be returned to the respective federal aid programs. Unearned aid is the amount of disbursed Title IV aid that exceeds the amount of Title IV aid earned based on attendance in the enrollment period.
Notification to Student
Once the Return to Title IV Funds calculation has occurred, Financial Aid & Scholarship will notify the student of the results of the calculation and the aid that was returned. The outstanding balance now due to the institution, as a result, is posted on the student’s account.
Credit Balances When a Student Withdraws
The school must determine the correct Title IV credit balance, taking into account the results from both the Return to Title IV calculation and the institutional refund calculation. If after the Return to Title IV funds and the institutional refund calculations are applied to the student’s account and a credit balance results, the credit balance will be disbursed as soon as possible but no later than 14 days after the date of the Return to Title IV calculation is performed.
Students submit a discontinuance form through the Office of the Registrar. The Office of the Registrar notifies all departments and declares the discontinuance as an official withdrawal. Official withdrawals are processed within 30 days of receiving the student was an official withdrawal. 34 CFR §668.22(b), 34 CFR §668.22(c).
Title IV aid recipients who fail to withdraw but stop attending class are considered unofficial withdraws. The Return to Title IV Funds policy requires BYU–Hawaii to calculate the "earned" amount based on the last day of attendance of the semester. If the student stopped attending prior to the 60% point of the term, the student will be billed for the outstanding charges as a result of the Return of Title IV funds. Unofficial withdrawals are processed within 30 days of determining the student was an unofficial withdrawal. 34 CFR §668.22(b), 34 CFR §668.22(c).