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Today we are breaking down some of our best practices when processing and calculating R2T4’s. But first, what even is a R2T4?
A R2T4 calculation (Return of Title IV) is used to determine the amount of Title IV aid a student has earned and/or the amount of unearned federal aid which the school and student are responsible for returning.
Schools are required to complete a R2T4 calculation when a student withdraws from school or becomes ineligible during a payment period/period of enrollment which the student started attending. The school is also in charge of helping the student figure out how much of the Title IV funding they will get to keep, based on the number of hours (if it’s a clock hour school or even credits) they have fulfilled towards their payment period for the semester.
“Schools are required to do the calculation no matter what. Even if they know it’s going to be 100% earned. The only time a calculation isn’t required is if a student is ineligible for aid for the period that they drop in.” – Joslyn Darling, Senior Consultant at FAS
The Department of Education always has resources available and a web-friendly version of the handbook. Read the handbook by clicking this link, and navigating to Volume 5: Withdrawals and the Return of Title IV Funds.
FAS is here to help navigate this confusing and ever-changing process. We’ve gone to the experts that process Title IV every day to see what best practice processing tips they can provide to make the already confusing experience a bit smoother.
- Communication between department staff. Stay in constant communication with staff that are responsible for tracking attendance or participation in a program. Many times, students are working with an instructor which often results in little to no communication between the financial aid department, instructor, and whoever is managing the student’s attendance. Because of this communication breakdown the calculation ends up being done late, (a BIG no, no).
- Proper documentation = improved accuracy. Document everything! Having proper communication and documentation between two or more entities (financial aid and credit hour staff) will improve the accuracy of the R2T4 calculation. This will also provide a better idea about a student’s actual attendance, their balance, charges and fees.
- Timeliness – If communication and accuracy of the calculation are both met, then the timeliness of R2T4 calculation will be imperative. There are timeframes to complete the R2T4 calculation set in the Department of Education guidelines. Failure to meet these timelines can result in a finding in audits or program reviews.
To help avoid making mistakes with R2T4 calculations, here are some of the common errors our expert process leads have seen that to look out for:
- Institutions should only include aid from the payment period they are reviewing. One common error seen when processing on a payment period basis is a school listing the total aid that came in, even if the student drops right at the end of the program.
- Always make sure the withdrawal date is the last day of attendance.
- Ensure that institutional charges, or even just charges of a student’s ledger, match what the student was charged at the beginning of the program. Making sure these add up so that nothing was missed is a great way to double check that your R2T4 calculation is correct!
R2T4’s can be a challenging concept for students, institutions, and financial aid staff everywhere. Regulations and requirements often change, to avoid the panic of an ever-changing process, FAS comes packed with 40+ years of experience with experts that process these refunds every day. Call us today or schedule a time for training! You can reach us anytime through our contact us page on our website.