The HEA Amendments of 1998, Public Law 105-244 substantially changed the way FSA funds are handled when an FSA program recipient completely withdraws from school. The change in the law makes clear that Title IV funds are awarded to a student under the assumption that the student will attend school for the entire period for which assistance was awarded. Under the Return of Title IV (R2T4) regulations, a student “earns” the assistance s/he has been awarded in direct proportion to the number of days of the payment period (semester) s/he remains enrolled, through the 60% point in the semester. A student who withdraws after the 60% point earns 100% of the aid. If a recipient of FSA grant or loan funds withdraws from school after beginning attendance during a semester, the college must calculate the amount of assistance the student earned. If the amount disbursed to the student is greater than the amount the student earned, the unearned funds must be returned. If the amount disbursed to the student is less than the amount earned, then the student is eligible to receive a post-withdrawal disbursement. If the student has received excess funds that must be returned to the government, the college shares the responsibility of returning those excess funds with the student. The college’s portion of the excess funds to be returned is equal to the lesser of the entire amount of the excess funds, or the student’s total tuition and fee charges multiplied by the percentage of unearned funds. If the college is not required to return all of the excess funds, the student must return the remaining amount. The college must return its share of unearned funds to the Department of Education through the Office of University Controller (OUC). The student may repay his or her share to the college or, if the overpayment has been referred to the Debt Collection Service (DCS), make arrangements to repay the Department directly. Eligible Student The student must be fully eligible to receive federal funds prior to the date of withdrawal, that is, the conditions that make a student eligible for a “late disbursement” must be met before the student withdrew in order for Title IV aid to be considered “aid that could have been disbursed” and included in the R2T4 calculation. For example: The ISIR must have been processed with an official EFC The student must be in good academic standing and have met academic progress requirements A Direct Loan must have been certified and originated Federal Perkins/FSEOG was awarded The college can prove that the student has attended one class Determining the Amount of Aid the Student Earned The semester begins on the first day of class and ends on the last day of final exams. Any scheduled breaks of five consecutive days or more should be excluded from the count of days. This includes Spring Break. The amount of aid a student has earned is determined by dividing the number of days that the student attended by the number of days in the semester, then multiplying the result by the amount of federal aid the student was entitled to receive. This amount is compared to the amount of aid the student actually did receive to determine whether FSA funds must be returned or whether the student will receive a post-withdrawal disbursement. Post-Withdrawal Disbursement If a student has received less Title IV funds than s/he has earned, the student (or parent) must receive a post-withdrawal disbursement within 120 days from the date of withdrawal. The college must send a written notice to the student within 30 days of the college’s determination of withdrawal. The notification must: Identify earned Title IV funds not credited to the student’s account Explain the ability of the student to accept or decline payment Advise the student to respond within 14 calendar days The student (or parent) must be given at least 14 calendar days to accept the post-withdrawal disbursement. If the student (or parent) fails to make a timely response, the college may choose not to make the post-withdrawal disbursement upon due notification to the student or parent. However, the college may always opt to pay the student after this deadline upon receipt of the student or parent’s notice of acceptance. The college must have a formal published policy on post-withdrawal disbursements. Remember that all promissory notes must be signed by the borrower before loan payments may be made. For Further Guidance For a more comprehensive treatment of the R2T4 regulations, readers should turn to the 2004-05 FSA Handbook, Volume 2, Chapter 6. This chapter presents extended discussion of each element of the R2T4 calculation and provides examples, worksheets, case studies and regulatory citations to assist in a better understanding of this process. Additional guidance can be found in Dear Colleague Letters GEN-04-03 (February 2004); GEN-00-24 (December 2000); GEN-98-28 (November 1998). NOTE: The number of refunds that an individual student is allowed will be limited under conditions imposed by the college. All tuition and fee schedules are subject to change without prior notice, at any time, upon action of the Board of Trustees of The City University of New York. Should fees or tuition be increased, payments previously made to the college will be counted as partial payments. Notification of additional amounts due, dates due, and methods of payment, will be sent to the individuals involved.