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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 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 withdraws from some but not all their classes in the semester. A student who completes all the requirements for graduation from their program before completing the semester is not considered to have withdrawn. This applies to all programs (with or without modules).

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 notify the Office of the Dean of Undergraduate Studies. The effective date of the withdrawal is the date the student submits the required form(s) to the Office of the Dean of Undergraduate Studies. If the required form(s) is submitted via email, the effective date is the email date. Students may only use their Loyola email account to submit required forms. Please contact the Office of the Dean of Undergraduate Studies to determine which form(s) must be completed and 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.

Please visit the Office of the Dean of Undergraduate Studies, the Academic Advising and Support Center, and the Office of the Registrar for additional information on dropping classes, leaves of absence and withdrawal from the University.

Title IV Funds

The Title IV aid programs subject to the return of Title IV funds requirement include the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), Federal TEACH Grant, Iraq and Afghanistan Service Grant, Federal Direct Subsidized and Unsubsidized Loans, Federal Direct Parent PLUS and 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, room, and meal plan charges, and prior award year charges of $200 or less for tuition, room, and meal plan charges, 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 (or parent for a Direct PLUS Loan) 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 canceled.

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:

  • Federal Direct Unsubsidized Loan
  • Federal Direct Subsidized Loan
  • Federal Direct PLUS Loan (Graduate PLUS Loan applies to graduate students only)
  • Federal Pell Grant
  • Federal Iraq & Afghanistan Service Grant
  • Federal Supplemental Educational Opportunity Grant (FSEOG)
  • Federal 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 (or parent for a Direct PLUS Loan) 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.