Clock Hour Programs · 2018. 10. 26. · FASFAA Clock Hour Workshop October 30-November 1, 2018 3 R2T4 Clock Hours For discussion purposes only Basic Principles • Student earns

FASFAA Clock Hour Workshop October 30-November 1, 2018

1

R2T4 Clock Hours

For discussion purposes only

Return of Title IV Funds

Clock Hour Programs

David Bartnicki | October 30-November 1, 2018

FASFAA Clock Hour Workshop

Topics

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• Concepts and Definitions

• Attendance

• R2T4 Calculation

• Post-Calculation Actions

• R2T4 on the Web

• Resources/References

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R2T4 Clock Hours


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Basic Principles

• Title IV funds are awarded under the

assumption that the student will attend school

for entire period for which assistance is awarded

• When a student withdraws, student may not be

eligible for the full amount of Title IV funds the

student was scheduled to receive

• In clock hour programs, student is a withdrawal

if she/he does not complete all scheduled clock

hours/weeks of instructional time

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R2T4 Clock Hours


Basic Principles

• Student earns Title IV aid through attendance

• Percentage of aid earned is equal to the percentage of

the payment period or period of enrollment completed

• If attend one day, R2T4 applies

• If a school has disbursed more aid than the student

has earned, money is returned to the programs

• If a school has disbursed less aid than the student has

earned, a post-withdrawal disbursement will be

calculated and may, depending on the circumstances,

be disbursed

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Basic Principles

• When the student completes more than 60% of

the payment period or period of enrollment, the

student has earned 100% of the scheduled Title

IV funds

• Institutional or other refund policies (state,

accreditor) do not impact the amount of Title IV

aid earned under an R2T4 calculation

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R2T4 Clock Hours


Applicability

• R2T4 requirements apply to any

recipient who withdraws during a

payment period or period of

enrollment in which the student

began attendance

• See 34 C.F.R. 668.22

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Eligible Title IV Recipient

• If student never commences attendance for the

period, the student is not an eligible Title IV

recipient

• R2T4 does not apply

• Provisions of 668.21 apply

• All Pell, FSEOG, Perkins, TEACH funds must be

returned

• DL funds credited to student’s account must be returned

• Notify servicer of DL funds disbursed directly to student

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R2T4 Clock Hours


Consumer Information

• Any refund policy with which school must

comply

• School’s tuition refund policy

• Requirements for treatment of Title IV

funds after withdrawal

• Procedures for official withdrawal

• Office(s) accepting official withdrawal notices

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Payment Period/Period of Enrollment

• Clock hour programs may choose

either payment period or period of

enrollment

• May choose on a program-by-program

basis

• Must treat all students within program

consistently

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R2T4 Clock Hours


Payment Period or Period of Enrollment

• Payment Period

• Period of Enrollment

450 Clock Hours

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450 Clock Hours 450 Clock Hours

Academic Year

How the R2T4 Calculation Works

• Step One: The institution determines the precise

amounts of Title IV aid for which a student was eligible

at the time of the withdrawal, including amounts

disbursed and amounts that could have been

disbursed

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R2T4 Clock Hours


Aid That Could Have Been Disbursed

• To include aid, must meet late disbursement

requirements in 668.164(g)(2)

• Student meets requirements if before

withdrawal:

• ED processed ISIR/SAR with official EFC

• Perkins/FSEOG – school made award

• DL – school originated loan

• TEACH – school originated grant

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Aid That Could Have Been Disbursed

• Aid listed in the “could have been disbursed”

section cannot actually be disbursed if

• First-time, first-year borrower withdraws before

the 30th day (default rate waivers apply)

• 2nd and subsequent DL disbursements unless

the student graduated or completed the loan

period

• Valid ISIR requirements not met

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R2T4 Clock Hours


How the R2T4 Works – Clock Hour • Step Two: The institution calculates the percentage of

the period that the student was scheduled to complete

upon withdrawal

• If greater than 60%, the student earned 100% for the period

• Numerator: Number of hours the student was

scheduled to complete

• Denominator: Total hours

in the period

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Percentage of Title IV Aid Earned (Clock Hour Programs)

• Numerator is clock hours scheduled to be

completed as of student’s LDA

• Denominator is clock hours scheduled to be

completed in payment period/period of enrollment

Student must actually start a payment period to be

considered in that payment period

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R2T4 Clock Hours


Percentage of Title IV Aid Earned

• Student withdraws when scheduled to have

completed 500 hours, but only actually

completed 400 hours

• student still considered in first payment period

• regulations require the use of 500 hours in the

R2T4 calculation for the 1st payment period

• calculation is 500/450--rounded down to 100%

• a student may never earn more than 100% of his or

her aid

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Required to Take Attendance

• Under our rules, schools that are required

to measure the clock hours that a student

completes in a program are considered to

be institutions that are required to take

attendance for R2T4 purposes

• See preamble page 66898 of October 29, 2010

Federal Register

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R2T4 Clock Hours


Withdrawal Date (Required to Take Attendance)

• Last date of

attendance must be

withdrawal date

• Date of determination

of withdrawal cannot

be more than 14

calendar days after

withdrawal date

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Importance of Dates

• Withdrawal date – determines the

percentage of TIV aid earned

• Date of determination – starts the clock

ticking for doing the calculation, returning

funds, and providing timely notifications to

the student

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R2T4 Clock Hours


Approved Leave of Absence (LOA)

• An LOA is only considered an approved LOA for Title

IV purposes if –

• School has formal written LOA policy

• Student must follow policy in requesting LOA

• Student must request LOA in writing

• School has reasonable expectation student will return

• No additional charges are imposed during or because of

the leave

• If the student is a Title IV loan recipient, school must

explain effect of failure to return from leave on loan

repayment

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Approved Leave of Absence (LOA)

• An LOA is only considered an approved LOA for

Title IV purposes if –

• Leaves of absence cannot exceed 180 days in any

12-month period

• School approved the LOA

• Upon completion of leave, student is allowed to

complete coursework started prior to leave

• Approved LOA is not considered a withdrawal

unless student fails to return from leave

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R2T4 Clock Hours


Failure to Return From Approved LOA

• Withdrawal date is last

date of academic

attendance prior to LOA

• Grace period starts

retroactively to

withdrawal date

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• Steps Three and Four: The percentage completed is

multiplied by the total amount of Title IV aid for which

the student was eligible

• If the amount earned is less than the amount disbursed, a

return to the Department is required

• If the amount earned is greater than the amount disbursed, a

PWD is required

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R2T4 Clock Hours


Rounding Rules for Percentages

• Calculate out to four decimal places

• 45 days/101 days = .4455

• 199 hours/450 hours = .4422

• Round to third decimal place

• .4455 = .446 = 44.6%

• .4422 = .442 = 44.2%

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Rounding Rules for Dollar Amounts

• Round to the nearest penny

–$2,346.00 X 44.6% = 1,046.316 - $1,046.32

–$2,346 X 44.4% = 1,041.624 or $1,041.62

• Disbursement or refund may be rounded to

nearest dollar

• $1,046.32 = $1,046

• $1,041.62 = $1,042

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R2T4 Clock Hours



• Step Five: If a return is required, the institution

determines the amount of unearned Title IV funds that it is

required to return

• The amount of funds due from

the institution is calculated by

adding all the institutional

charges incurred by the

withdrawal date, then

multiplying that total by the

percentage of the period the

student did not complete

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Institutional Charges

• Institutional charges include:

• Tuition and fees

• Room and board if contracted with school

• Course materials if no real and reasonable opportunity to

purchase elsewhere

• Based on charges initially assessed to student

• Only adjusted by changes to charges prior to withdrawal

• If AFTER a student withdraws, the school changes the

amount of charges (for time present, etc.), those changes

do NOT affect the initial charges used in R2T4

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R2T4 Clock Hours



• Assumption that TIV funds are used to pay

institutional charges ahead of ALL other aid

• Charges may NOT be reduced even if other

sources of aid pay those charges

• Example

• Charges = $2,000

• VA benefit covers all $2,000

• Charges used in R2T4 is still $2,000

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• Proration of charges

• Used if school charges for a period longer than

a payment period

•Example – charges for 540 hours but has a

450 hour payment period

• Usually the charges used in R2T4 are the pro-

rated amount of charges for the longer period

(540 hours prorated down to the cost for 450

hours) BUT

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R2T4 Clock Hours


Institutional Charges • Proration of charges

• However, if school retained TIV funds in excess of prorated

charges then charges for the period are the amount retained

• Example

– Charges - $5,000 for program (900 hours)

– R2T4 uses payment period (450 hours)

– Prorated charge for payment period is $2,500

– School retained $3,000 for payment period

– Charges to be used in R2T4 is $3,000

Please note - Only when the student has provided authorization for the

institution to retain a credit balance would institutional charges for a retained

amount exceed the prorated amount

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• Returning equipment

• School may exclude documented costs for

nonreturnable equipment and returnable equipment if

not returned in good condition within 20 days of

withdrawal if –

• School can substantiate that its return policies are

reasonable, consistent, and fair to all students, and students

are notified in writing of those policies when they enroll

• The school can exclude the total amount the school paid for

the materials NOT what the school charged the student

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R2T4 Clock Hours



• Step Six: Once the

institution determines the

total amount of unearned

Title IV aid that must be

returned to the

Department, the

institution must return

funds in the statutory

order (i.e. loans, then

grants)

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Timeframe to Return Funds

• Calculation must be completed within 30 calendar days of the date of determination of

withdrawal

• Return funds to Direct Loan program as

soon as possible, but no later than 45

calendar days after the date of

determination of withdrawal


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R2T4 Clock Hours


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Step 8: Repayment of

Student’s Loans

• Student is responsible to

repay any loan funds not

returned by the school

• Loans are repaid in

accordance with terms of

the promissory note

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Steps 9 &10: Return of Funds

by Student

• Any grant repayment due from student is considered an overpayment

• Student is responsible for repayment

• Amounts of $50 or less in any program are set aside

• Grant 50% protection

• Law specifies order of Title IV programs to which funds must be returned


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R2T4 Clock Hours


Example—50% Grant Protection • Initial amount of

grants to be returned: $1,440

• Total Title IV grants aid x 50% = $1,300

• Subtract 50% grant protection from $1,440 to determine the amount student is responsible to repay.

Grant Overpayment

• School must notify student of

overpayment within 30 days

of date of determination of

withdrawal

• Student retains Title IV

eligibility for 45 days following

notification by school

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R2T4 Clock Hours


Grant Overpayment

• During 45 day period, student must:

• Repay in full to school; or

• Make satisfactory arrangements to repay with

school (school option); or

• Make satisfactory arrangements to repay with ED

• School must report and refer overpayment to

ED (NSLDS) if not paid in full or no repayment

arrangements made within 45 days

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Post-Withdrawal Disbursements (PWD)

• Box J in Step 4 of worksheet

• Must meet late disbursement

requirements

• Must be made from available

grant funds before available

loan funds

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R2T4 Clock Hours


PWD – Notification Requirements

• Within 30 days of date of determination, school

must notify student/parent of any loan PWD:

• Explain student/parent may decline all or a portion of

the disbursement

• Request confirmation of any amount to be credited to

the student’s account, or disbursed directly to

borrower

• Explain obligation to repay loan funds

• Specify deadline of at least 14 days for response

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PWD - Loans

• Must receive confirmation prior to disbursement

• If timely response, disbursement must be made

within 180 days of date of determination

• If response is late, school may or may not

disburse

• If school chooses not to disburse, must notify

borrower in writing of outcome

• If no response from borrower, no disbursement

can be made

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R2T4 Clock Hours


PWD – Grant Funds

• No student confirmation required to pay

current outstanding charges

• If disbursed directly to student, must be

disbursed within 45 days of date of

determination

• Must be disbursed to student account within

180 days after date of determination

• Must obtain authorization to pay for other

allowable charges on account

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R2T4 Example


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R2T4 Clock Hours


Example Profile

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• Max was enrolled in a 1500 hour cosmetology program

• He started the program on December 3, 2018 in the first

450 hour payment period (school performs R2T4 by

payment period)

• Max withdrew from classes on January 18, 2019

• At the time of withdrawal, he was scheduled to have

completed 196 hours within the 1st 450 hour payment

period

• Disbursements made during 1st payment period – Pell

($1872), Sub DL ($1732), and Unsub DL ($990)

• Max was charged $4,500 for costs associated with 1st

payment period

R2T4 Clock-Hour Hand Calculation


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R2T4 Clock Hours


Clock-Hour Step 1

Clock-Hour Steps 2 & 3


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R2T4 Clock Hours


Clock-Hour Step 4

Clock-Hour Step 5


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R2T4 Clock Hours


Clock-Hour Step 6

Clock-Hour Steps 7 & 8


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R2T4 Clock Hours


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Special Circumstances

• Credit Balances

• Verification

• Death of a Student

• Inadvertent overpayments

• Failing to earn a passing grade

• Terms with modules

• Prorating charges

• Student returning within 180 days or transferring into a new program in clock hour and nonterm credit hour programs

Verification and R2T4

• If verification not complete within timeframe

to meet R2T4 deadlines, school excludes

aid subject to verification from calculation

• If verification is then completed after R2T4

deadlines but before verification deadlines,

school must recalculate R2T4 including

verified amounts as aid that could have

been disbursed

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R2T4 Clock Hours


• Hold all Title IV Credit Balances until R2T4

• Credit Balance is “Aid Disbursed”

• Determine if Credit Balance changes because of a Refund Policy or R2T4

• Use Credit Balance to repay Grant Overpayment on behalf of student

• Release Credit Balance within 14 days

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Title IV Credit Balances

Return After Withdrawal

• Clock hour programs

• If the student returns to the same

program within 180 days –

• the student is treated as if he/she

never left and returns to the same

payment period

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R2T4 Clock Hours


Return After Withdrawal

• Clock hour programs

• If withdrawn student re-enters same program of

study after 180 days, or transfers into new

program at any time

• Student begins new payment period upon re-

entry or transfer

• Remaining portion of program treated as length

of entire program for awarding Title IV funds

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R2T4 Clock Hours


What is R2T4 on the Web?

• Free web-based software that calculates

and manages the return of Title IV funds

• Available through FAA Access to CPS

Online

• Must be enrolled on SAIG Enrollment web

site – https://www.fsawebenroll.ed.gov/

• Once enrolled, R2T4OW can be accessed

at www.fafsa.ed.gov/FOTWWeb/faa/faa/jsp

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R2T4 Clock Hours


Resources and References

• FSA Handbook, Volume 5

• 34 CFR 668.22

• DCL GEN-00-24, GEN-04-03, GEN-11-14

• FSA Assessments

• http://www.ifap.ed.gov/qahome/qaassessments/ret

urntivfunds.html

• Federal Register – October 29, 2010

• R2T4 Demo Site

• http://fafsademo.test.ed.gov/

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Contacts

• Atlanta School Participation Team

– Main Number: 404-974-9303

• Point-of-Contacts

– Arva Thomas (IIS) – 404-974-9412

– Cassandra Weems (IIS) 404-974-9305

• Atlanta Training Officer

– David Bartnicki – 404-974-9312

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Email: [email protected]

http://www.ifap.ed.gov/qahome/qaassessments/returntivfunds.htmlhttp://www.ifap.ed.gov/qahome/qaassessments/returntivfunds.htmlhttp://fafsademo.test.ed.gov/


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R2T4 Clock Hours


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QUESTIONS?

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David Bartnicki

[email protected]

404-974-9312
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Documents

Clock Hour Programs · 2018. 10. 26. · FASFAA Clock Hour Workshop October 30-November 1, 2018 3 R2T4 Clock Hours For discussion purposes only Basic Principles • Student earns