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Return of Title IV Funds

Federal statute requires a financial aid office to recalculate federal financial aid eligibility for Title IV funds for students who cease enrollment in all classes prior to completing 60 percent of a payment period or period of enrollment.

At Loyola, this means the Office of Graduate Financial Aid must recalculate federal financial aid eligibility for enrolled students who begin attendance and withdraw (stop attending) from all their classes before completing 60 percent of the semester. This requirement does not apply to a student who begins attendance but withdraws from some but not all their classes in the semester.

Official or Unofficial Withdrawal

For R2T4 purposes, a withdrawal can be official or unofficial.

An official withdrawal occurs when a student who has begun attendance decides to withdraw (stop attending) all their classes before the semester ends. Students are required to submit a Change of Registration Form to the Office of the Registrar or contact the appropriate graduate academic department office.  The Change of Registration Form can be found on Loyola Self-Service, select Academics on the left menu bar, then select the GR Change of Registration Form.  If you are taking a Leave of Absence or withdrawing from the University completely with no intention of returning, please select the proper form, GR Leave of Absence or GR Withdrawal from the University, respectively.  The effective date of the withdrawal is the date the student submits the required form(s). Please contact the appropriate graduate academic department for additional information.  

An unofficial withdrawal occurs if a student drops out without notifying the University. The withdrawal date is the midpoint of the semester or a documented last date of participation in an academically related activity. An unofficial withdrawal is considered to have occurred when a student has been assigned an initial grade of FW for all classes which is recorded officially as an F after verification that the student did not officially withdraw.

For additional information on withdrawing from classes, leaves of absence and withdrawal from the university please visit the Office of the Registrar website.

Withdrawal from programs offered in Modules

Generally, a student has withdrawn from a program offered in modules if he is enrolled in one or more modules, does not complete all the scheduled days in a module during the payment period or period of enrollment and does not meet the conditions for an R2T4 exemption.

Withdrawal Exemption for all programs

A student who completes all the requirements for graduation from his or her program before completing the days or hours in the period that he or she was scheduled to complete is not considered to have withdrawn. This applies to all programs (with or without modules)

Withdrawal Exemption for students enrolled in 8-week I and 8-week II Sessions (Modules)

A student is not considered withdrawn if:

  • The student successfully completed one module or a combination of modules with a combined length of at least 49 percent of the number of countable days in the payment period or period or enrollment;
    • When determining the total number of countable days in the payment period or period of enrollment for the purpose of this exception, the school must exclude scheduled breaks of five or more consecutive days, all days between the modules, and days associated with non-module courses, if the student is enrolled in a course or courses spans the entire length of the payment period or period of enrollment. When determining whether a module or combination of modules includes at least 49 percent of the countable days in the payment period for programs offered in modules, if the percentage is not a whole number, the decimal is not rounded up or down. Note that this is different calculation from the process used to determine the number of days in the payment period or period of enrollment in the R2T4 calculation itself.
  • The student successfully completed coursework comprising at least half-time status, according to the school’s definition of half-time status; or
  • The student provided written confirmation of attendance in a later module that begins later in the payment period and within 45 days of the end of the module from which the student withdrew. This written confirmation must be provided as close as possible to the date that the student ceased attendance and before the time when the school is required to perform the return Title IV funds calculation, offer a post- withdrawal disbursement of loan funds, or take any other action under R2T4 requirements. A school cannot assume a student will attend a future module based simply on the existing registration in a later module.
  • Successfully completes is defined as the student earning a passing grade.

Title IV Funds

The Title IV aid programs subject to the return of Title IV funds requirement include the Federal TEACH Grant, Federal Direct Unsubsidized Loans, and Federal Direct Graduate PLUS Loans.

R2T4 Formula

Though financial aid is typically posted to a student’s account at the beginning of the semester, students earn the funds as they complete the semester. If a student withdraws during the semester, the amount of Title IV aid they earned up to that point is determined by the federal R2T4 formula.

Earned Aid

Earned aid is the amount of Title IV aid the student is entitled to based upon the amount of the semester completed as of the date the student withdrew. A student’s earned aid may be either disbursed or undisbursed at the time of withdrawal. The amount earned is proportionate to the percentage of the semester the student had completed at the time they withdrew, excluding breaks of five days or more. In other words,

(Number of days the student is enrolled) divided by (Total number of days in the semester including weekends and holidays and excluding Thanksgiving break or spring break, if applicable)
= Percentage of semester completed (also the percentage of earned aid)

For example, if a student completes 40% of the semester, they earned 40% of the Title IV aid originally scheduled.

Post-Withdrawal Disbursement

A student may be due a post-withdrawal disbursement if the amount of Title IV funds earned is more than the amount disbursed at the time they withdrew.

If a student has an outstanding balance on their account for current award year charges for tuition, and prior award year charges of $200 or less for tuition, Loyola may automatically credit a post-withdrawal disbursement of grant funds to the student’s account. Otherwise, Loyola must obtain the student’s written authorization before crediting the post-withdrawal disbursement for other current award year educationally related institutional charges and prior award year educationally related institutional charges up to $200.

If a student does not have an outstanding balance on their account or the amount of the post-withdrawal disbursement is greater than the balance, Loyola must directly deliver any grant portion of the post-withdrawal disbursement to the student within 45 days of the date of the school’s determination the student withdrew.

If the post-withdrawal disbursement includes loan funds, Loyola may not credit the student’s account and the borrower may not receive the proceeds as a direct disbursement without first notifying the borrower and confirming they still wish to receive the loan disbursement. Loyola must send the notification within 30 days of the school’s determination that the student withdrew and allow the borrower at least 14 days to respond. A student may choose to decline some or all the loan proceeds to reduce indebtedness. If no response is received within 14 days of notification, the award will be cancelled.

Unearned Aid

If the amount of Title IV aid earned is less than the amount disbursed as of the date the student withdrew, the difference is the amount of unearned aid that must be returned to the Title IV programs by Loyola, the student, or both.

The R2T4 formula is designed so all the unearned funds are returned by the school if the student’s institutional charges equal or exceed the amount of Title IV funds disbursed. It is also designed so the institution and the student must each return a share of the funds if the amount of Title IV funds disbursed exceeds the student’s institutional charges.

School Share

Loyola’s share is determined first and is the lesser of the total amount of unearned aid or an amount equal to institutional charges multiplied by the percentage unearned. The percentage unearned is the complement of the percentage earned.

Loyola must return the Title IV funds for which it is responsible no later than 45 days after the date of the determination of the date of the student's withdrawal.

Loyola is responsible for allocating unearned funds to the Title IV programs from which the student received assistance in the following order, up to the net amount:

  • Direct Unsubsidized Loan
  • Direct Graduate PLUS Loan
  • TEACH Grant

Student Share

The student’s share is the difference between the total unearned aid and Loyola’s share. Loyola must notify the student of any unearned funds for which they are responsible for repaying within 30 days of the date the school determined the student withdrew.

If unearned grant funds are to be returned it is referred to as an overpayment. The maximum amount of grant aid a student must repay is 50 percent of the total federal grant funds received or scheduled to receive. Loyola’s notification must include the student has 45 days in which to repay the overpayment in full or to enter into a satisfactory repayment agreement with Loyola or the Department of Education. Students are not required to return unearned grant funds of $50 or less.

If direct loan funds must be returned, the student must repay the funds according to the terms of the promissory note.

Loyola Refund Policies

The R2T4 refund policy is distinct and separate from Loyola’s other refund policies. The amount of unearned Title IV funds that must be returned because of applying the R2T4 formula is independent of institutional charges assessed the student under the school’s refund policy. Title IV regulations do not govern how much Loyola may charge its students. It is possible that a student may still be responsible for unpaid institutional charges resulting from the University having to return unearned Title IV funds.