Finding 639016 (2022-001)

Criteria or specific requirement: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs. The determination of the difference is often referred to as R2T4 calculations. The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student?s withdrawal date. The Department of Education (ED) requires that R2T4 calculations are performed unless one module that includes 49% or more of the number of days in the payment period has been completed (34 CFR 668.22(a)). In addition, the Federal Student Aid Handbook, published by the Department of Education, states that percentages are calculated to four decimal places and is rounded to three decimal places for R2T4 calculations. Condition: The University calculated R2T4 for modular students that had completed more than 49% of the days in the payment period. In addition, the University calculated one student's return using the incorrect completed percentage. Context: Forty students who received aid and then withdrew, never began attendance, or were terminated during the fiscal year were tested. Three exceptions were identified as follows: ? Two students that were taking module classes had incorrect calculations. Both had completed enough modular time that included 49% or more of number of days in the payment period. Given these students withdrew after completing more than 49% of the number of days in the payment period, they should have been exempt from the return of funds calculations. $3,940 was returned that should not have been. ? One student in which the calculation used the incorrect percentage earned. The amount of refund calculated by the school was $816. The actual amount that should have been refunded was $959. Questioned costs: None. Cause: There was a misinterpretation of the new regulations from ED. The University did not detect an automatic override amount for the last date of attendance in their system. Effect: Certain R2T4 calculations were performed incorrectly. The exceptions noted above resulted in loan funds that were incorrectly returned to ED totaling $3,940 offset by an additional amount needing to be returned to the ED of $143. Repeat finding: No Recommendation: We recommend the University update their R2T4 calculation process to eliminate the students that completed 49% of the payment period days in their modular classes. We also recommend the University review the calculation for automatic last date of attendance overrides. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.