R2T4 Post-withdrawal Disbursement - CCCSFAAA Post-withdrawal . Disbursement. ... if it is a PLUS...
20
R2T4 Post-withdrawal Disbursement
R2T4 Post-withdrawal Disbursement - CCCSFAAA Post-withdrawal . Disbursement. ... if it is a PLUS loan, ... may be beneficial to turn down all or a portion of the grant
Welcome to the EdFund webinar covering the topic of Post Withdrawal Disbursements. We have muted everyone upon entering into the meeting today. In order to ask questions during the presentation I want to draw your attention to the Q & A tab at the top right of your screen, please use this to ask any questions you may have. My lovely assistant ………….. Will be monitoring the Q&A box during the presentation itself & answering all your questions. Also, we will launch a short poll now so that we can track how many participants at our webinars. At the end of the presentation we will open up a short survey for you to evaluate the webinar today. I hope you will take the time to complete our survey. With that, let’s get started.
Agenda
■
Points to Ponder
■
Summary of Actions
■
Steps
■
Practice
■
Review
Presenter
Presentation Notes
The regs stat that “even if a students paid all institutional charges and ceased enrollment prior to Title IV funds being disbursed, if the Title IV could have been disbursed, the institution must determine the funds earned by the student and follow the procedures for making a post-withdrawal disbursement. 0809 FSA Handbook V5,Chap 2,p. 26 These are outlined in 0809,Vol.5,Chapter 2, p. 39. We will take you through all of the steps that are required in this process and we will close with some examples that will allow you to gain a practical understanding.
You many not be aware of this, but the requirements for a post-withdrawal disbursement are similar in many areas to the requirements under Subpart K- Cash Management of the Student Assistance General Provision regulations. So, it might be interesting for you to review the regulations; however, note that in some cases that PWD differ from the cash management requirements. As a reminder, a late disbursement for a student who has withdrawn during the payment period or period of enrollment is called a Post-withdrawal disbursement. Any PWD must meet the current required conditions for late disbursements. These conditions are listed in the FSA Handbook Vol.4-Chapter 1, Processing and Managing Federal Student Aid Funds, pg. 25 .The chart in this section clearly explains the FSA program and any conditions or limitations that must be met in order for a school to receive a late disbursement. We will look at this chart in detail in a moment. For students who withdraw after the 60% point-in time, even if return of funds is not required, a school will still have to complete a Return Calculation in order to determine when the student is eligible for a post-withdrawal disbursement.
Presenter
Presentation Notes
We split the chart from the handbook into two parts to make it easier to look at on the screen. The top part of the chart describes the Title IV aid program for which we are looking to make a late disbursement for and then for each program there are the conditions that must be met to before a student loses eligibility to receive the late disbursement. The bottom part of the chart lists the additional limitation that have to be satisfied before the school may make a late disbursement. This chart can be helpful for you if you are unsure of if and when you can make late disbursements in general for a student.
Summary of Actions
■
School must♦
Obtain confirmation
♦
Obtain authorization♦
Disburse grant funds
♦
45 days■
School may♦
Credit grant funds without permission
Reminder
Presenter
Presentation Notes
As a reminder, an institution must obtain a student’s authorization to credit their account with Title IV grant funds for charges other than current charges. A school is permitted to use a student’s or parent’s authorization for crediting a student’s account for educationally related expenses that the school obtained prior to the student’s withdrawal date. If the school did not obtain authorization prior to the student’s withdrawal, the school would have to obtain authorization in accordance with the cash management requirements before the school could credit the student’s account for other current charges or for educationally related activities. A school must disburse any amount of a post-withdrawal disbursement of grant funds that is not credited to the student’s account. Moreover, the school must make the disbursement as soon as possible, but no later than 45 days after the date of the school’s determination that the student withdrew. A school must disburse any amount of a PWD of grant funds that is not credited to the student’s account. Moreover, the school must make the disbursement as soon as possible, but no later than 45 days after the date of the school’s determination that the student withdrew. Grant Funds A school may credit grant funds from a PWD without a student’s permission, if it is to pay for tuition, fees, and room and board (if the student contracts with the school) or disbursed directly to a student.
Summary of Actions (cont.)
■
Notice requirements♦
Timely
♦
Informed decision
■
Actions between R2T4 & PWD
Presenter
Presentation Notes
A school must notify a student, or parent, if it is a PLUS loan, in writing prior to making any PWD of loan funds, whether those loan funds are to be credited to the student’s account or disbursed directly to the student (or parent). The information provided in the notification must include the information necessary for the student, or parent , to make an informed decision as to whether the student or parent would like to accept any disbursement of loan funds and must be provided within 30 days of the date of a school’s determination that a student has withdrawn. In addition, the notice must request confirmation of any PWD that the student or parent, wishes the school to make. The notice must identify the type and amount of the loan funds it wishes to credit or disburse directly, explain that a student, or parent , may accept or decline all or a portion of the funds. The notice must also explain to the student, or parent, the obligation to repay the loan funds whether they are disbursed to the student’s account or directly to the borrower. The notice must also make clear that a student, or parent , may not receive as a direct disbursement loan funds that the institution wishes to credit to the student’s account unless the institution agrees to do so. If the student, or parent , does not wish to accept some or all of the loan funds that the institution wishes to credit to the student’s account, the institution must not disburse those funds.
Summary Actions (cont.)An institution may not delay its disbursement processes in order to ascertain whether a student wishes to receive the grant funds the student is entitled to. However, while the institution is processing the disbursement or notifying the student about his or her eligibility for a post-withdrawal disbursement of loan funds the school may, at its discretion, notify the student that it may be beneficial to turn down all or a portion of the grant funds to preserve his or her grant eligibility for attendance at another institution.
Of course, if a student should independently contact the institution and state that he or she does not wish to receive a grant disbursement, the institution is not required to make
the
disbursement
Presenter
Presentation Notes
This is very important to remember... An institution may not delay its disbursement processes in order to ascertain whether a student wishes to receive the grant funds the student is entitled to. However, while the institution is processing the disbursement or notifying the student about his or her eligibility for a post-withdrawal disbursement of loan funds the school may, at its discretion, notify the student that it may be beneficial to turn down all or a portion of the grant funds to preserve his or her grant eligibility for attendance at another institution. Of course, if a student should independently contact the institution and state that he or she does not wish to receive a grant disbursement, the institution is not required to make the disbursement.
Step Four
5,575 2,875 2,700
Presenter
Presentation Notes
For PWD it all begins with Step 4. The regs stat that “even if a students paid all institutional charges and ceased enrollment prior to Title IV funds being disbursed, if they could have been disbursed, the institution must determine the Title IV funds earned by the student and follow the procedures for making a PWD. If the student receives less Federal Student Aid than the amount earned, the school must offer a disbursement of the earned aid that was not received. This is called a post-withdrawal disbursement. If the student receives more Federal Student Aid than the amount earned, the school, the student, or both, must return the unearned funds in a specified order. Remember, Box I includes both disbursed and aid that could have been disbursed, and Box E contains aid that was simply DISBURSED. Step 4, Letter J determines the amount of aid that will become the Post-Withdrawal Disbursement.
Post- Withdrawal Disbursement Tracking Sheet
Presenter
Presentation Notes
A school may use the Post-Withdrawal Disbursement Tracking Sheet to track the handling of the post-withdrawal disbursement, or it may use a form developed by someone other than ED. A school must maintain written records of its post withdrawal disbursements, regardless of which form or method you choose to use.
2,700
700
2,700 700 2,000
Stanley Student 12345678910 05 10
Presenter
Presentation Notes
A PWD must be made within 180 days of the date the institution determines that the student withdrew. Remember, a student/parent MUST be notified of post-withdrawal loan funds in writing prior to making any post-withdrawal disbursement. Take a look at the calculation provided on this screen. Box 1 collects the amount reported in Box J, Box 2 calculates outstanding charges Box 3 calculates the amount of direct disbursement to student/parent You can see that Box I lists the amount of Post-withdrawal disbursement, and that the school has assessed a $700 Charge in Box II, and that in Box III the student/parent is informed of the amount that will be directly disbursed to them, and the amount that will be posted to existing charges.
■
Item IV determines the allocation order and amount of the post-withdrawal disbursement
1,000 1,000
Presenter
Presentation Notes
Item IV helps determine the allocation order and amount of the Post-withdrawal Disbursement. You will need to refer back to the R2T4, Step 1 to accurately complete this section of the tracking sheet. In other words, you need to know how much Title IV aid was already credited to the student’s account and how much, if any, was disbursed directly to the student. Let’s go back to our example: We said that our student has $2000 in PWD funds available. Now in this step, let’s say our student was eligible to receive a $2000 Pell disbursement for the full period of enrollment. But when they withdrew and we calculated the R2T4, we saw that $1000 of the $2000 Pell was disbursed and credited to the student’s account. So they still have a remaining $1000 ($1000 + 1000 = 2000). In this case, we wouldn’t have to offer any loans because we were able to allocate the PWD with grants funds. If this wasn’t the case, we would continue to fill in the award amounts as applicable and up to the total PWD calculated.
■
Item V tracks authorizations and notifications♦
The school must document the result of the notification process and the final determination made concerning the disbursement, and maintain that documentation in the student’s file
Presenter
Presentation Notes
Remember, the notification to the student and/or parent, must identify the type and amount of the loan funds it wishes to credit to the student’s account or disburse directly to the student or parent. And again it must explain that the student, or parent, may accept or decline all or a portion of the funds. The notice must also explain to the student, or parent, the obligation to repay the loan funds whether they are disbursed to the student’s account or directly to the borrower.
Post-withdrawal Disbursement■
A school may use one contact to♦
Notify loan repayment obligations
♦
Obtain permission to credit loan funds to cover unpaid institutional charges
♦
Obtain permission to make a post- withdrawal disbursement of grant/loan
funds for other than institutional charges ♦
Obtain permission to make a post-
withdrawal disbursement of loan funds directly to student
Presenter
Presentation Notes
Your institution can choose to make one notification to the student as long as it contains the elements listed here. In order to avoid having to contact a student a multiple times, a school may use one contact to – 1) notify a borrower about his or her loan repayment obligations; 2) obtain permission to credit loan funds to a student’s account to cover unpaid institutional charges; 3) obtain permission to make a post-withdrawal disbursement of grant or loan funds for other than institutional charges; 4) and obtain permission to make a PWD of loan funds directly to a student. FSA Handbook, Vol. 5, Chapter 2, Page 96 Notice to a student offering a Post-withdrawal disbursement Flexibility in notifying students In order to avoid having to contact a student a multiple times, a school may use one contact to – notify a borrower about his or her loan repayment obligations; obtain permission to credit loan funds to a student’s account to cover unpaid institutional charges; obtain permission to make a Post-withdrawal disbursement of grant or loan funds for other than institutional charges; and obtain permission to make a Post-withdrawal disbursement of loan funds directly to a student. A school must send the notification as soon as possible, but no later than 30 calendar days after the date that the school determines the student withdrew.
Post-withdrawal Disbursement■
School must send the notification as soon as possible, but no later than 30 calendar days after the date that the school determines the student withdrew
■
The notification must advise of a deadline of 14 days or more ♦
Any deadline must apply to both confirmation of loan disbursements to the student’s account and direct disbursements to student
Presenter
Presentation Notes
Read 1st bullet…. Read this instead of 2nd bullet: In the notification, the school must advise the student or parent an institution may set a deadline of 14 days or more. Any deadline must apply to both confirmation of loan disbursements to the student’s account and direct disbursements of a post-withdrawal disbursement. The notification must make it clear that if the student or parent does not respond to the notification within the time frame, the school is not required to make the post-withdrawal disbursement. However, a school may choose to make a PWD based on an acceptance received from a student or parent received after the school’s deadline. A school that chooses to honor a late response must disburse all the funds accepted by the student or parent. The school cannot credit the student’s account in accordance with the student’s request, but decline to disburse post-withdrawal funds accepted as a direct disbursement. If a response is not received from the student or parent within the permitted time frame, or the student declines the funds, the school would return any earned funds the school was holding to the appropriate program. Reference: 2009-2010 FSA Handbook, Vol. 5, Chapter 2, Page 96
An FAA determines that a student is eligible for a post-withdrawal disbursement of PLUS loan funds. The FAA notices that the student’s file has a comment from the parent that they received the notification of a post-withdrawal disbursement. The comment indicated that parent approves the disbursement, and that the comment was made by phone. Can the FAA release the disbursement?
Post-withdrawal Practice
Presenter
Presentation Notes
The answer is: YES A student’s or parent’s response to an offer of a direct disbursement of Title IV loan funds from post-withdrawal disbursement does not have to be in writing. However, a school must document the response. FSA Handbook, Vol 5, Chapter 2, Page 90
1.
Read / listen / take notes
2.
Determine which actions the school must take
3.
Review the answers
4.
Complete PWD Tracking Sheet
Scenario Scenario -- Michelle drops from school Michelle drops from school
Post-withdrawal Case Study
Presenter
Presentation Notes
Scenario Michelle drops out of school on Nov. 5th. On Nov. 10th, the school becomes aware that Michelle has ceased attendance. The school determines that because Michelle has earned $900. in Title IV aid that he has not received, he is due a PWD of $900. When Michelle withdrew, only $600. of the $1000. in Pell Grant funds that could have been disbursed, none of it had been disbursed. The school determines that Michelle has $50 in outstanding tuition charges and $100 in outstanding parking fines for the payment period. The school obtained permission from Michelle at the beginning of the term (prior to her withdrawal) to credit her account for educationally related charges other than tuition, fees and room and board. Because available grant funds must be used before available loan funds to make a PWD, the school credits Michelle’s account with $150. of Michelle’s Pell grant funds. �On Nov. 12th (the last date the school could have sent the funds was Dec 24th – 45 days after the date of the school’s determination that the student W/D) the school sends the remaining $250. in Pell grant funds to Michelle. Question
Michelle Student 999-99-999911 10
900
150
900 150 750
11 12
11 19 11 26
150. 250.
500.
Review of Main Points
■
Thoughts on the case study
■
Questions
knowledge
practice
application
Closing thoughts…
Presenter
Presentation Notes
KNOWLEDGE – Thank you for attending today’s session, and we hope that you have gained the knowledge you were expecting to receive … PRACTICE – We hope you enjoyed the opportunity to practice through the examples, (websites) or questions we used during the presentation APPLICATION – We hope we have provided pertinent information that you can use & apply in your job responsibilities.
Presenter
Presentation Notes
At this time you have completed our web training and we want to thank you for joining us. We would like to remind you that you will be receiving an evaluation to provide us with your feedback on today’s webinar and we also would like your comments/suggestions about future topics you’d be interested in attending. � We welcome you to attend additional training that we offer through the web or in-person.� If you would like more information about our training opportunities or have any other questions you can:�Contact your Client Relations Manager, �Call our School Services team at 866-222-2680�or email us at [email protected] � Thank you again for attending our presentation today.
