Return of Title IV Aid policy

Introduction 

The University of Plymouth has a clear refund policy for students attending this institution. The following is an addendum for students who are in receipt of US Federal student aid funds which have been authorised under Title IV of the Higher Education Act (2008). If a student who is in receipt of Title IV financial aid withdraws from the University and is due a refund of fees (tuition and/or residence) paid for that period of enrolment, a determination must be made as to whether any of the refund money must be returned to the US Federal aid programme. 
This determination will be made in accordance with the Return of Title IV Aid (R2T4) requirements of section 484B of the Higher Education Act of 1965, as amended (HEA) and §668.22 of the Student Assistance General Provisions regulations. The Return of Title IV Aid requirements were added to the HEA by the Higher Education Amendments of 1998 (Public Law 105-244, enacted October 7, 1998). These requirements prescribe how Title IV funds must be treated when a Title IV student aid recipient withdraws from an institution without completing the payment period or period of enrolment, as appropriate. 
If it is determined that refund money must be returned to the aid programme, the distribution of funds will be as follows: 
  • Federal Stafford Unsubsidised 
  • Federal Stafford Subsidised 
  • Federal PLUS.

Summary 

When a student withdraws during a payment period then the amount of Title IV program assistance that has been earned up to that point is determined by a specific formula. The date of withdrawal is the earlier of the date the student notified the University of their intent to withdraw or the date the student submitted the withdrawal form. If the student received (or the University received on the student’s behalf) less assistance than the amount which has been earned then the student may be able to receive those additional funds. If the student received more assistance than was earned then the excess funds must be returned by the University and/or the student. 

Without an official Withdrawal Form, the University will use the last date of attendance to compute the R2T4 formula. 

Date of withdrawal 

In a case where a student notifies the University that he or she intends to withdraw then the student will be informed of the need to complete the official Withdrawal Form and document the date the student notified them. Should the student fail to file the Withdrawal Form or there is a lag between the notification and the filing of the form, the earlier date of notification will be used in calculating the R2T4 formula. In the event a student receives all failing grades for a semester, the Program Director will contact the faculty members to determine if the “F” grades were earned or represent a lack of attendance. In the event it is determined that those grades were the result of lack of attendance then the Program Director and faculty will attempt to determine the last day of attendance and use that date in the R2T4 calculations. If the exact date cannot be determined, the University will assume a 50 per cent 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 lender. 

Calculating the amount of assistance earned 

The amount of assistance earned is determined on a pro rata basis. The payment period is the period for which the loan was certified and the percent of attendance is calculated by dividing the number of days attended by the total number of days in the payment period. For example: if a student completes 30 per cent of the payment period or period of enrolment then they have earned 30 per cent of the assistance which they were originally scheduled to receive. Once the student has completed more than 60 per cent of the payment period or period of enrolment then all the assistance that the student was scheduled to receive for that period is considered to have been earned. If the student did not receive all of the funds that were earned, he or she may be due a post-withdrawal disbursement. If the post-withdrawal disbursement includes loan funds then the student may choose to decline the loan funds so that additional debt is not incurred. The University will use the R2T4 worksheets as provided by the US Department of Education to determine how much of the loan may be retained and how much must be returned. 

Post-withdrawal disbursements 

The University may automatically use all or a portion of a post-withdrawal disbursement (including loan funds, if the student accepts them) for tuition, fees, and room and board charges (as contracted with the University). For all other University charges, the University needs the student’s permission to use the post-withdrawal disbursement. If the student does not give permission the student will not be offered the funds. 

There are some Title IV funds that students may be scheduled to receive which cannot be earned once a student withdraws because of other eligibility requirements. For example, in certain circumstances, if a first-time, first-year undergraduate student has not completed the first 30 days of the program before withdrawal, the student will not earn any loan funds that he or she would have received had they remained enrolled past the 30th day. If the student receives (or the University receives on behalf of the student) excess Title IV program funds that must be returned, the University must return a portion of the excess equal to the lesser of: 

1. The institutional charges multiplied by the unearned percentage of the funds, or 

2. The entire amount of excess funds. 

The University will return this amount even if it did not keep this amount of the Title IV program funds. If the University is not required to return all of the excess funds, the student must return the remaining amount. The student repays any loan funds that must be returned in accordance with the terms of the promissory note. That is, scheduled payments are made to the holder of the loan over a period of time. Students who have received a refund of their loan proceeds before withdrawing may be required to return part or all of those funds to the lender. The University may also attempt to collect from the student any Title IV program funds that the school was required to return. 

Rights and Responsibilities

Accepting a loan

You have the right to Direct Loans which are fixed to a maximum of $20,500 for postgraduates and for undergraduates the maximum subsidised loans are $5,500 (year 1); $6,500 (year 2); $7,500 (year 3).

You may have the right to a Graduate PLUS Loan. That is your only entitlement; everything after that is borrowed from a commercial lender at commercial rates and subject to them being willing to lend to you, they don’t have to lend you anything.

You may borrow up to the Cost of Attendance in total (including Direct loans), subject to your credit rating.

Please check the US Department of Education website for up-to-date information.

Which loan types are available?

  • Direct Subsidised Loans – while in school, you are not responsible for accrued interest. Available only for undergraduates.
  • Direct Unsubsidised Loans – you are responsible for all the accrued interest from the day of disbursement.
  • Direct PLUS Loans – credit-based loan available for graduate students or parents of dependent undergraduates

Rights

You have the right to Direct Loans which are fixed to a maximum of $20,500 for postgraduates and for undergraduates the maximum subsidised loans are $5,500 (year 1); $6,500 (year 2); $7,500 (year 3). You may have the right to a Graduate PLUS Loan. That is your only entitlement; everything after that is borrowed from a commercial lender at commercial rates and subject to them being willing to lend to you, they don’t have to lend you anything. You may borrow up to the Cost of Attendance in total (including Direct loans), subject to your credit rating. Please check the US Department of Education website for up-to-date information.

Your rights include, but are not limited to:

  • Repay your loan early without penalty.
  • Written information of obligations.
  • Explanation of default consequences.
  • Be notified if your loan is sold.
To defer all loans while still at university, you must complete a deferment form and have it certified by the University. You can obtain deferment form from your lender (see also, Post-withdrawal disbursements). 

Responsibilities

Your obligation to repay becomes legally binding when you sign the Master Promissory Note (MPN). You are required to use your loan for educational purposes, and specifically for tuition fees as priority. You must repay your loan in line with the schedule agreed with your lender (see also Terms and conditions of receiving financial aid). 

Your most important responsibility is to make your loan repayments on time. If for any reason you can’t, you must talk to your loan provider and seek their advice. 

Visit the National Student Loan Data System (NSLDS) to review your federal loan details and to obtain your lenders’ contact information. Your servicer can help you answer questions in connection with your loans. 

Please note that loans are not discharged by bankruptcy, and interest may still be charged. There may also be penalties for defaulting.

Loan repayment requirements

You will still be required to re-pay your loan if:

  • You don't complete your educational programme
  • You cannot find employment
  • You were not satisfied with the education or other services you received from the University
  • You were notified that your loan was sold to another party by your lender

You must make your payments on time unless you have made special arrangements with the lender or servicer. Many lenders offer repayment incentives to reward you for paying on time. 

Please note, the above list is not exhaustive, and students should refer to their loan documents for a full set of requirements.

Change of circumstances

You have a responsibility to notify your lender and the University if your circumstances change. This includes, but is not limited to:

  • Change of current address / phone numbers / name
  • Change of Social Security Number
  • Withdrawal / Deferral from University
  • Become a part time student
  • Change in anticipated graduation date
  • Change of references
  • Change of permanent address

Resolving student loan disputes

If you think there might be an issue with your federal student loan, call your loan servicer to discuss the issue. 

As a last resort, if you are unable to resolve the issue by working with your loan servicer, you may contact the Federal Student Aid (FSA) Office of the Ombudsman for assistance. The FSA Ombudsman works with federal student loan borrowers to resolve disputes or issues from an impartial, independent viewpoint. 

You can reach FSA’s Ombudsman at:

FSA Ombudsman Group
P.O. Box 1843
Monticello, KY 42633

Phone: 1-877-557-2575
Email: fsaombudsmanoffice@ed.gov

Further information

For further information about the return of Title IV funds, please contact the University’s Student Accounts Team at studentaccountsteam@plymouth.ac.uk.