Federal Financial Aid Return of Funds

Originator: Associate Vice President, Financial Aid

Subject: Federal Financial Aid Return of Title IV Funds Policy

1. Introduction

   Title IV funds are awarded to a student under the assumption that the student will attend school for the entire period for which the aid is awarded. Pursuant to federal regulation 34 CFR 668.22, the University of Maryland Global Campus (UMGC) must perform a Return of Title IV Funds (R2T4) calculation when a student receiving Title IV funds does not attend for the entire period. The requirement to perform a calculation for a Title IV recipient is triggered by any of the following: course cancellations, disenrollment, cease participation and receives a Failure Due to Non-attendance (FN) grade, withdraws, is expelled, or drops last course on or before the 60 percent attendance point for term enrollment scenario. A Title IV recipient who certifies intent to return later within the same term after withdrawing or dropping will not require a calculation unless the student does not return as scheduled. If an R2T4 calculation is required, any unearned funds are returned to the Title IV program(s). This can result in a balance owed to UMGC, and the student is responsible for repaying the outstanding debt, if the debt goes unpaid it will be transferred to the State Central Collections Unit (SCCU).

2. Definitions

   Title IV Recipient: a student who is awarded aid under one or more of the following programs: Federal Unsubsidized Direct Stafford Loan (other than PLUS loans), Federal Subsidized Direct Stafford Loan, Federal Direct Graduate PLUS Loan, Federal Direct PLUS Loan (parent), Federal Pell Grant, Iraq and Afghanistan Service Grant and Federal Supplemental Educational Opportunity Grant, Iraq Afghanistan Service Grant.

   Term: Fall, Winter, Spring, or Summer

   Session/Module: a course that does not span the entire length of a term.

   Period of enrollment: the combination of sessions a student is enrolled in during a term.

   Exclusions from Return of Title IV Funds: includes Federal Work Study, alternative loans, UMGC, state, and private grants/scholarships.

   Drop: when a student rescinds enrollment in course(s) either before the course(s) has begun or during the drop period.

   Withdrawn: when a student either formally ends enrollment in course(s) after the drop period, stops participating, receives a F grade with no participation or receives a Failure due to Non-Attendance (FN) grade. This also includes the above actions resulting in enrollment that is not applicable to a student's active degree or certificate program.

   Date of determination: the date of determination that a student withdrew.

   Earned Aid: Title IV funds that a student is entitled to keep based on the percentage of the term that was completed prior to withdrawal. Earned aid is determined based on a pro rata schedule that is set by the Department of Education.

   Post-Withdrawal Disbursement (PWD): aid that is disbursed to a student after withdrawing from course(s) because the student earned more aid than was disbursed prior to withdrawal.

   Last Date of Participation (LDP): the last date of academically related activity is used as the withdrawal date for courses that are dropped or receive an FN grade. Examples of academically related activity include but are not limited to attending a face-to-face course session, submitting an assignment or quiz, participating in the discussion area in an online course, or interacting with a faculty member about the subject studied in the course. Academically related activity does not include logging into an online classroom or participating in academic advisement. 

3. Course Withdrawal Policy
   Students should consult the Course Withdrawal Policy for instructions on completing a withdrawal action. Students are responsible for dropping or withdrawing themselves. This can be done by completing the withdrawal module in the MyUMGC student portal.
   
4. Withdrawal for Return to Title IV purposes
   A student is considered withdrawn from UMGC if-
   1. The student completely withdraws for all coursework, or
   2. The student stops attending before completing the term, or
   3. The student does not complete all scheduled modules, whether or not any other course(s) were completed prior to ceasing attendance
      
      
   A student is not considered withdrawn for Return to Title IV Funds if a student successfully completes:
   1. All requirements for graduation for the degree program before completing the days or hours in the period that the student was scheduled to complete
   2. One module or a combination of modules that when combined contain 49% or more of the numbers of days in the payment period
   3. Coursework equal to or greater than the coursework required for the institution’s definition of a half-time student
   4. All courses scheduled to attend during the term
   A student is not considered withdrawn if the student submits written confirmation at the time of withdrawal of intent to attend a later module in the same period of enrollment. If the student does not return as intended, a Return to Title IV calculation will be performed.
   
   Withdrawal Date
   A student’s withdrawal date is the date the student began the institution’s withdrawal process or officially notified the institution of the intent to withdraw. For a student who leaves without notifying the institution, the withdrawal date is the student’s last date of academic participation related to the student’s enrolled course(s).
   
   Academic participation includes, but not limited to-
   1. Submitting an academic assignment
   2. Taking a quiz or an exam
   3. Participating in an online discussion assigned by the institution
      
      
   Academic participation does not include-
   1. Logging into an online course without any further participation
   2. Participating in academic counseling or advisement
      
5. Return to Title IV Calculation
   Based on this calculation, UMGC students who receive federal financial aid and do not complete their classes during a term could be responsible for repaying a portion of the aid they received. Students who do not begin attendance must repay all financial aid disbursed for the term. The following section outlines the R2T4 calculation components.
   
   1. Determining Institutional Charges
      The institutional charges used in the calculation usually are the charges that were initially assessed the student for the entire period of enrollment. Initial charges may only be adjusted by those changes the institution made prior to the student’s withdrawal (for example, for a change in enrollment status unrelated to the withdrawal). If, at the time of the withdrawal or afterward, the amount of institutional charges is adjusted, those changes do not affect the charges in the calculation. Institutional charges for non-program applicable course(s) are not included in the R2T4 calculation.
      
   2. Title IV Aid Disbursed or Could Have Been Disbursed
      Title IV Aid disbursed is all net aid disbursed to the student’s account prior to the date of determination of the student’s withdrawal date. To be aid that could have been disbursed, the student’s FAFSA must be processed with an official EFC from the Department of Education, FSEOG were previously awarded, a loan was originated, and the student had a valid MPN prior to the student’s withdrawal date.
      
   3. Percentage of Title IV Funds Earned by Student
      The percentage of the period of enrollment the student completed is used to determine the amount of Title IV funds the student has earned. That percentage is determined by taking the number of days scheduled to attend before the student withdrew divided by the total number of days in the period of enrollment. If the student’s withdrawal date occurs on or before the student completed 60% of the payment period, the percentage earned is equal to the percentage of the period of enrollment that was completed. If the student’s withdrawal date occurs when the student has completed more than 60% of the payment period, the percentage earned is 100%.
      
      If the student shows no participation for the period of enrollment, all federal student aid will be cancelled, and all disbursed Title IV funds will be returned to the Department of Education
      
      Once the percentage of earned Title IV funds is determined, the next step is to calculate the dollar amount of unearned Title IV funds that must be returned. That amount is determined by, first, subtracting the percentage of earned funds from 100%; that number is the unearned Title IV funds percentage. Then, the unearned Title IV funds percentage is multiplied by the total Title IV funds disbursed (or which could have been disbursed) to the student.
      
   4. Return of Fund Order
      If a student receives more Title IV funds that the amount earned, the amount of unearned funds will be returned to the Department of Education in the following order-
      1. Federal Unsubsidized Direct Stafford loans (other than PLUS loans)
      2. Federal Subsidized Direct Stafford loans
      3. Federal Direct GRAD PLUS loans
      4. Federal Direct PLUS loans
      5. Federal Pell Grants
      6. Iraq and Afghanistan Service Grant
      7. Federal Supplemental Educational Opportunity Grant (FSEOG)
         
   5. Post Withdrawal Disbursement
      A post-withdrawal disbursement of grant and/or loan funds may be paid if the student is eligible to receive the funds. A post-withdrawal disbursement of grant funds is applied towards outstanding term charges on the student’s account and may pay up to the amount of the allowable charges (i.e., tuition and fees). Post withdrawal disbursement of grant funds will be disbursed as soon as possible but no later than 45 days from the date of determination of the student’s withdrawal date.
      
      For a post-withdrawal disbursement of loans funds, the student (or parent if a PLUS loan) will be notified within 30 days of the date of determination of withdrawal that loan funds are available. The student (or parent if a PLUS loan) will be given the opportunity to accept, decline, or reduce the amount of loan within 14 calendar days.  Upon receipt of a timely response from the student (or parent), UMGC will disburse the loan funds as soon as possible but no later than 180 days of the date of determination of the student’s withdrawal date.  Loan funds will be applied towards the outstanding term charges on the student’s account.  The funds may pay up to the amount of the allowable charges (i.e., tuition and fees).  Any remainder will be paid to the student (or parent).
      
      After the 14^th day expiration, the pending loan is cancelled, and the student is notified. UMGC maintains the right to decide whether to make a post-withdrawal disbursement of loan funds if the student (or parent if a PLUS loan) responds after 14 days of the date that the notification was sent.  If UMGC decides not to make the post-withdrawal disbursement, it will inform the student in writing.
6. Timeline for Return of Title IV Funds
   UMGC must return Title IV funds as soon as possible but no later than 45 days after the date of its determination that the student withdrew. The University must offer any post-withdrawal disbursement within 30 days of the date the school determined the student withdrew.
   
7. Re-enrollment after the Return of Title IV Funds
   When a student returns to the UMGC within the same term or module within the term after withdrawing, and unearned Title IV funds has been returned, aid may be reinstated based on eligibility.
   
8. Responsibility of the student for return of unearned aid
   UMGC will return funds on the student’s behalf to the appropriate federal aid program(s) and will subsequently charge the student’s account. The student is responsible for all charges resulting from a Return to Title IV calculation.
   
9. Student Notification
   Notification of aid adjustments, as well as owed funds to UMGC, will be e-mailed to the student’s email address on file.

NOTE: The return to Title IV funds policy is separate from the University’s tuition and fee refund policy