US Federal Aid Loans – Return to Title IV

Policy International US Federal Aid Loans – Return to Title IV

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Intent

To specify the policy relating to the administration of US Federal Aid Loans (Title IV funds), which are received by the University on behalf of US citizens or eligible US non-citizens and which must be returned when such students withdraw from study.

Scope

All students who are US citizens or eligible US non-citizens who are in receipt of US Federal Aid.

Definitions

For the purposes of this policy, terms are defined as follows:

Approved Leaves of Absence (LOA) - for Title IV Purposes - Leave of Absence refers to a specific time period during a program of study when the student is not in attendance. To be approved for Title IV purposes, Leave of Absence must meet the conditions specified in section 8 of this policy.

Financial Aid Administrator - Staff member/s suitably trained and familiar with the legislative requirements in the administration of the Title IV program at JCU. JCU’s Financial Aid Administrator is located in the Future Students Directorate.

Institutional Charges - for Title IV Purposes - Fees charged to the student by the University - these are normally restricted to tuition fees only, but may include accommodation charges payable to a Hall of Residence where the student has requested that the University pay the Hall of Residence directly from the Federal Aid funds received on their behalf.

Loan Payment Period - Period of time within a Teaching Period for which the student is enrolled. The Loan Payment Period begins on the first day of the first Study Period of enrolment and ends on the last day of the main Study Period for that Teaching Period.

Official Withdrawal - for Title IV Purposes - An official “withdrawal” refers to a student’s intent to completely terminate studies at JCU with no expectation of return. Students who subsequently decide to return to their studies must re-apply for admission.

R2T4 - “Return to Title IV” acronym widely used by the US Department of Education and US Financial Aid administrators in relation to loan funds that must be returned to the US Department of Education.

Title IV - A part of the US Higher Education Act of 1965 that provides financial assistance programs to help eligible US post-secondary students.

Unapproved Leaves of Absence - for Title IV Purposes - A Leave of Absence, which may be granted to the student by the University, but which does not meet all of the conditions specified in section 8 of this policy, is considered, for Title IV purposes, to be unapproved and treated as a withdrawal,

Unofficial Withdrawal - for Title IV Purposes - An unofficial withdrawal is one where the University has not received notice from the student that he/she has ceased or will cease attending.

US Federal Aid - Loan programs authorised by Title IV, part B of the US Higher Education Act of 1965, also known as the Direct Loan Program (DLP), and includes loans such as the Federal Stafford and PLUS loans.

Policy and Procedures

Introduction

JCU is registered as a provider to certify and administer US Federal Aid loan applications (Title IV funds) for eligible students from the United States, and who are studying at the University. Loans may be provided to both new and continuing students.

Where a student withdraws from their studies, and Title IV funds have been released by the lenderUS Department of Education, the University must determine whether the student is eligible for the loan amount, and if not, return funds to the lender US Department of Education as required. Under the Regulations of the Offices of the US Department of Education by which the University must abide, Section 34CFR 668.22 details the requirements for return of Title IV loan assistance. As a registered ‘foreign school’, JCU is audited each year to ensure that the requirements have been met.

This policy outlines how JCU will monitor and administer the ‘Return to Title IV’ (R2T4) requirements set by the US Department of Education.

Policy

1. Return of Title IV Funds (R2T4)

Title IV program funds must be returned by the University to the US Department of Education in the following circumstances:

  • where JCU has received a loan disbursement for a student in the current teaching period, and the student has withdrawn and was enrolled for less than 60% of the loan payment period, or

  • where JCU has received a loan disbursement for a student in the current teaching period, and the student has made changes to their enrolment resulting in their eligible Title IV loan amount being reduced.

If a first-time, first-year undergraduate student has not completed the first 30 days of the loan payment period before withdrawal, the student will not be eligible for any Title IV funds and any such funds received by the University must be returned to the US Department of Education.

All other students who have withdrawn from study and who were enrolled for less than 60% of the loan payment period are eligible for Title IV funds on a pro rata basis according to the percentage of the loan payment period for which they were enrolled (see section 4 for further details).

Students who were enrolled for at least 60% of the loan payment period are eligible for the full amount of Title IV funds allocated to them for that teaching period.

If JCU received less Title IV loans than the amount for which the student is eligible, the student is entitled to receive those additional funds after withdrawal by application to the Financial Aid Administrator, who will take the appropriate steps to obtain the required funds from the US Department of Education.

Upon a student’s withdrawal, the University is required to return funds to the US Department of Education, for which the student is no longer eligible, up to a maximum amount equivalent to the institutional fees charges payable by the student. Any additional funds to be returned over this amount are the responsibility of the student to return to the US Department of Education.

2. Disbursement of Title IV program funds upon withdrawal from the University

Where a student has made an unofficial withdrawal from study, the Financial Aid Administrator will automatically use all or a portion of the post-withdrawal disbursement for institutional charges due.

Where a student has officially withdrawn from study, the Financial Aid Administrator must have the student’s permission to use the post-withdrawal disbursement to pay any outstanding institutional charges.

3. Determining the withdrawal date for a student who withdraws officially or unofficially

Official withdrawal

Students must advice the University in writing of their intention to withdraw. The date of withdrawal will be taken to be the date of the receipt of the notification, in writing, of the student’s intention to withdraw.

Failing grade

In the event that a student receives all failing grades for a teaching period, the Financial Aid Administrator will analyse the final grades and/or contact the supervisor to determine if the results represent a lack of attendance. In the event it is determined that those grades were the result of lack of attendance, the Financial Aid Administrator and/or supervisor will attempt to determine the last day of attendance and this will be the date used in the R2T4 calculations.

If the exact date cannot be determined, JCU will assume a 50% attendance, and use that date as the last date of attendance. Students who do not attend even one class are ineligible for Title IV funds and all of the loan proceeds will be returned to the US Department of Education.

Unofficial withdrawal

Although the University is not required to keep attendance records for students, lecturers are expected to notify the International Student Support team when an international student is not attending. The Student Support team will advise the Financial Aid Administrator when a student has been reported as ‘not attending’. Without written advice of a student’s intention to withdraw, the University will use the last date of attendance to calculate the R2T4 amount.

4. Calculating the amount of the Title IV program funds for which a student is eligible upon withdrawal

The University will determine the Title IV loan amount for which the student is eligible up to the point of withdrawal using a specific formula. The Financial Aid Administrator is responsible for calculating R2T4 using worksheets provided by the US Department of Education to determine how much of the loan may be retained by the student and how much must be returned to the US Department of Education.

The main factors affecting the formula are:

  • date of withdrawal,

  • start and end dates for the loan payment period,

  • amount of loans due to be disbursed/amount of loans actually disbursed, and

  • amount of institutional charge paid/payable.

The amount of assistance for which a student is eligible is determined on a pro rata basis. The percentage attendance is calculated by dividing the number of days attended by the total number of days in the loan payment period. For example, if the student completes 30% of the loan payment period, the student is eligible for 30% of the assistance they were originally scheduled to receive. Once a student has completed at least 60% of the loan payment period, the student will be eligible for all the assistance that the student was scheduled to receive. If the student did not receive all of the funds for which they were eligible, he or she will be eligible for a post-withdrawal disbursement. The student may choose to decline the post-withdrawal disbursement so that additional debt is not incurred (refer to section 2 of this policy).

If the amount of Title IV loans disbursed to the University is determined to be more than the amount for which the student is eligible, some or all of the excess funds must be returned to the US Department of Education. The amount to be returned is equal to the lesser of:

  1. the current US$ equivalent of the institutional charges, or

  2. the entire amount of excess funds.

The University must return the calculated amount to the US Department of Education even if it did not retain this amount of the Title IV funds and has since paid some or all of the funds to the student.

The loan payment periods at James Cook University are based on Teaching Periods (ie they are term-based), and not based on clock hours. A standard full time enrolment is 12 credit points per Teaching Period. To be eligible for Title IV funds, a student must be enrolled in at least 6 credit points for the Teaching Period, and at least one subject in Study Period 1 or 2.

5. Timeframe for returning Title IV program funds

All funds must be returned to the US Department of Education within 30 days of the last date of attendance. Where this is not possible such as in cases of unofficial withdrawal, the University will return the funds to the US Department of Education as soon as is reasonably possible.

When an R2T4 amount is determined, the Financial Aid Administrator will use standard University refund procedures to obtain a bank draft, made payable to the same credit agency which issued the loan cheque.

6. Order in which Title IV program funds must be returned

The University will advise the US Department of Education to which Title IV funds are returned to distribute those funds in the following order of priority:

  1. Federal Stafford Unsubsidized loans, then

  2. Federal Stafford Subsidized loans, then

  3. Federal PLUS loans, then if any balance is refundable,

  4. The student.

7. Responsibilities of the student

Students withdrawing officially from the University, whilst in receipt of Title IV funds are required to attend exit counselling with the Financial Aid Administrator.

Any excess loan funds to be returned by the student to the US Department of Education must be repaid in accordance with the terms of the promissory note (loan contract).That is, scheduled payments must be made to the US Department of Education over a period of time. Students who have received payment of excess loan funds from JCU before withdrawing will be required to return funds to their US Department of Education for which they are no longer eligible.

The requirements for returning Title IV funds to the US Department of Education when students withdraw are separate from the requirements of the University’s Tuition Fee Policy for International Students. Upon withdrawal, students may still owe funds to the University for unpaid institutional or other charges, or for Title IV funds which the University has returned to the US Department of Education. Students will be liable for any outstanding tuition fees and other fees or charges owed to the University.

A student who owes funds to the University will be considered as a University debtor and will be treated in accordance with the provisions of the Accounts Receivable – Student Debtors – Penalties Policy.

8. Leave of Absence (LOA)

Leave of Absence is viewed as a temporary interruption to a student’s attendance at the University. To be approved for Title IV purposes, a Leave of Absence must meet the following conditions:

  1. All requests for Leave of Absence must be submitted in writing and include the reason for the student’s request. The form must be signed and dated by the student and specify the date the student would like the Leave of Absence to begin and end.

  2. Students must apply in advance for a Leave of Absence unless unforeseen circumstances prevent them from doing so.

  3. The reason for the requested Leave of Absence must generally be non-academic in nature and there must be a reasonable expectation that the student will return from the Leave of Absence within the allowed time frame.

  4. The total time taken for all Leave of Absence must not exceed 180 days in any 12-month period, including days in which the University is not in session.

  5. The student must be able to return to complete the required coursework for the Teaching Period that he or she began prior to the Leave of Absence.

In addition, students must comply with the University’s Leave of Absence from Study policy.

The University may grant a student Leave of Absence that does not meet the conditions outlined above. However, such Leave of Absence is considered a withdrawal for Title IV purposes.

As the payment period at JCU correlates to period of enrolment within the Teaching Period, a student returning from a Leave of Absence must do so at a time when he or she can complete the required assessment for that Teaching Period. Students who fail to do this will not be eligible to receive a second or subsequent disbursement.

Where a student receives an approved Leave of Absence (LOA) and returns to their studies within the agreed timeframe, completion of the R2T4 process is not required.

Where a student does not return to complete their studies within the agreed timeframe, the student will be considered withdrawn as at the date they originally took leave. The R2T4 process will be completed.

9. Appeals

  1. A student who wishes to appeal a decision of the Financial Aid Administrator made under the provisions of this policy may lodge an appeal in writing with the Director, Future Students, setting out the grounds for the appeal. Any relevant supporting documentation must be attached.

  2. The appeal must be lodged within 10 working days from the date of notification of the decision of the Financial Aid Administrator. Where in the opinion of the Future Students, there are circumstances beyond the control of the student, the Director, Future Students may extend the time for lodging an appeal.

  3. An appellant shall have the right to be heard in person by the Director, Future Students, or nominee, prior to any decision being made. Students who wish to do this must indicate as such in the initial appeal application.

  4. The appeal may be based only on the grounds that the guidelines of the US Federal Department of Education were not followed in the process of making the decision.

  5. Disbursements of funds will not be made while an appeal is being processed.

  6. The appeal shall be considered by the Director, Future Students or nominee.

  7. The process to review the appeal must commence within 10 working days of lodgement of the appeal with the Director, Future Students.

  8. An appellant who elects to be heard in person by the Director, Future Students or nominee may be assisted by a support person, not acting in a legal capacity, but the support person shall take no part in the proceedings, except at the express invitation of the Director, Future Students.

  9. The Director, Future Students shall have the power to uphold or dismiss the appeal.

  10. An appellant will be notified of the outcome of their appeal, and the reasons for the decision, as soon as possible by the Director, Future Students.

Related documents and legislation

US Federal Aid Loans - Satisfactory Academic Progress (SAP) for US Federal Aid Loans Eligibility

Tuition Fee Policy for International Students

Leave of Absence from Study

Administration

Approval Details

Policy Sponsor

Deputy Vice Chancellor, Global Strategy and Engagement

Approval Authority

Futures Committee

Date for next review

1/05/2016

Revision History

[Approval date - the date the approval authority approved the establishment, minor or major amendment or disestablishment]

[Implementation Date - the date the policy was published in the Policy Library and is the date the policy takes effect]

Version

Approval date

Implementation date

Details

Author

15-1

07/05/2015

07/05/2015

Minor amendments required as part of re-certification of JCU to be an accredited administrator of US Federal Aid.

Director, Future Students

09-1

06/08/2009

07/08/2009

Approved by Finance Committee. Approval Authority changed to Academic Board.

08/09/10 – University position titles updated and definitions placed in alphabetical order. US Federal Aid definition amended to include the new Direct Loan Program (DLP).

08-2

09/10/2008

10/10/2008

Approved by Vice Chancellor

08-1

31/01/2008

01/02/2008

Interim approval given by Vice-Chancellor for a period of 6 months

Keywords

Us Federal Aid Loans Title IV

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