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Updates on the Return to Title IV Calculation

Tim Gaber

Mar 1 2022

2 min read

The Department of Education introduced updates to the Return to Title IV (R2T4) calculation requirements that became effective on July 1, 2020. The two primary changes include the withdrawal exemptions and the R2T4 Calculation Freeze Date (RCFD). While an R2T4 calculation is applicable to all financial aid students who withdraw or cease attendance, the new changes apply to programs offered in modules.

For financial aid purposes, a student is generally considered to have withdrawn when they do not complete all of their scheduled days in the payment period. However – based on the updated requirements – it’s no longer that simple. Below are brief explanations of the updates made to the R2T4 calculation.

Withdrawal Exemptions in Programs Offered in Modules

The new withdrawal exemption regulation adjusts the way days are counted to determine if an R2T4 is necessary (only programs offered in modules). A student may not be considered to have withdrawn if:

The institution received written confirmation from the student that they will attend a later module in the same payment period or period of enrollment
They completed all requirements for graduation
The student completes one or more modules that, together, comprise at least 49% of the days in the payment period (the student must have earned a passing grade in a module or in each in a combination of modules)
The student completes coursework equal to or greater than the coursework required for half-time enrollment

If a student meets any of the above items, an R2T4 may not be necessary. However, Pell grant recalculation rules may still apply for any courses the student does not begin.

R2T4 Calculation Freeze Date (RCFD)

An RCFD is an optional policy for programs offered in modules. It uses the student’s enrollment schedule at a fixed point in the denominator of the R2T4 to determine the amount of aid earned by the institution. The RCFD can be the same as a census date used by an institution. An institution needs to determine the scheduled days at the freeze date to use in the denominator in Step 2 of the R2T4.

Resources: https://fsapartners.ed.gov/knowledge-center/library/fsa-assessments/2019-04-02/return-title-iv-funds

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About the Author

Tim Gaber

Tim Gaber, CPA, is the Leader of Sikich’s Title IV Audit and Consulting Practice, overseeing and managing audits, examinations and other special projects related to a wide range of services. In his leadership position, Tim keeps the practice on top of ever-changing rules and regulations within this sector by developing and providing training to staff and clients.