Department Issues Reminder Regarding Return of Title IV Funds

At a recent student-loan-industry conference, the U.S. Department of Education reminded schools of the acceptable time frame for the return of Title IV funds.

If the student withdraws, the school must calculate how much of the student's Federal Family Education Loan Program (FFELP) funds must be returned to the lender, based on the requirements commonly called "return of Title IV Funds" or "R2T4." By not more than 30 days following the date the school determines that the student withdrew, the school must refund to the lender the amount of FFELP-loan funds that the school determines must be returned to the student.

Schools should document the process for determining the student's withdrawal date as a part of the financial-aid office's policies and procedures. In addition, the school should record and retain a record of the date of each student's withdrawal, as well as the date the school determined that the student had withdrawn.

Common Manual, section 4.7 provides additional information about the return of Title IV Funds. Subsection 4.7.B focuses in more detail on the processing of funds that the school determines must be returned.

If your school needs additional clarification, send an e-mail to the USA Funds^® policy department