R2T4 Policy

Federal regulations require Title IV financial aid funds to be awarded under the assumption that a student will attend the institution for the entire period in which federal assistance was awarded. When a student withdraws from courses for any reason, including medical reasons, he/she may no longer be eligible for the full amount of Title IV funds that he/she was originally scheduled to receive. Saint Mary’s College of California (SMC) students who receive federal financial aid and do not complete their classes during a semester or term could be responsible for repaying a portion of the aid they received. Students who do not begin attendance must repay all financial aid disbursed for the term.

General Requirements:

Federal aid is disbursed based on the assumption that a student will attend courses for the entire term and is therefore eligible for the entire amount of the disbursement. When you discontinue enrollment, the Office of Financial Aid Services must calculate the amount of financial aid you have earned prior to the date the action was filed. Any aid received in excess of the earned amount is considered unearned. The unearned financial aid must be returned to the respective federal programs. If the student has not earned enough Title IV funds to cover all institutional charges, then the student may owe a balance directly to SMC. The R2T4 calculation is completed by the Office of Financial Aid Services.

An R2T4 calculation is not required in the following situations:

  • The student never actually began attendance for the payment period.

  • The student continues to attend at least one course.

  • The student began attendance but was not eligible to receive a Title IV aid prior to withdrawal – the student is not considered an eligible Title IV recipient).

SMC has its own institutional refund policies, as set forth in the College Catalog under “Tuition Refund Policy”, which determine the charges that a student will owe after withdrawing; however, these policies are separate from and will not affect the amount of Title IV aid the student has earned under the Return of Title IV funds calculation.

Determination of Withdrawal Date

The withdrawal date used in the R2T4 calculation of a student’s federal financial aid is the actual date indicated on the official withdraw record. If a student stops attending classes without notifying SMC, the withdrawal date will be the midpoint of the semester or the last date of academic activity determined by the Office of the Registrar.

Calculating Return of Title IV (R2T4) Amount

Students who receive federal financial aid must ‘earn’ the aid they receive by staying enrolled in classes. The amount of federal financial aid assistance the student earns is on a pro-rated basis. Students who withdraw or do not complete all registered classes during the semester may be required to return some of

the financial aid they were awarded based on the Return of Title IV (R2T4) calculation. Once 60% of the term is completed, a student is considered to have earned all of his/her financial aid and will not be required to return any federal funds.

The following formula is used to determine the percentage of unearned aid that has to be returned to the federal government:

  • The percent earned is equal to the number of calendar days completed up to the withdrawal date, divided by the total calendar days in the payment period (less any scheduled breaks that are at least 5 days long).

  • The payment period for most students is the entire term.

  • The percent unearned is equal to 100 percent minus the percent earned.

Post-Withdrawal Disbursement (PWD)

In compliance with federal regulations, an evaluation will be done to determine if all eligible aid had been disbursed as of the withdrawal date. If not, and the student meets the federal criteria for a PWD, the student will be notified of their eligibility within 30 days of determining the student’s date of withdrawal. After being notified of PWD eligibility, students must reply if they wish to accept the post withdrawal disbursement. A PWD would first be used toward any outstanding charges before any funds are returned to you. If no response is received within approximately two weeks of notification, the award will be canceled.

Student Notification of Repayment

A notification letter outlining the amount returned to the federal and institutional program(s), along with the federal government's repayment worksheet, will be mailed to the student's permanent address. SMC will return funds on the student's behalf to the appropriate federal and institutional aid program(s) and subsequently will bill the student's bursar account. A statement reflecting these charges will be sent to the student. The student is responsible for all charges and overpayments resulting from a Return of Title IV Calculation.

Repayment of the Student’s Loans

Any loan amounts that are owed to the Department of Education after the return of funds by the school, must be repaid to the loan holders according to the terms of the borrower’s promissory note.

Return of Grant Funds by the Student

Any grant overpayment identified in Step 10 of the R2T4 calculation must be repaid by the student within 45 days of receiving notification from the Office of Financial Aid Services. If the grant overpayment cannot be paid in full, a repayment plan may be arranged with the Business Office. If a student does not repay the grant funds or make a satisfactory payment arrangement within 45 days, the account will be turned over to the U.S. Department of Education (ED) as an overpayment of federal funds.

Students who owe an overpayment of Title IV funds are ineligible for further disbursements from federal financial aid programs at any institution until the overpayment is paid in full.

How a Withdrawal Affects Future Financial Aid Eligibility

Refer to the Office of Financial Aid Services’ Satisfactory Academic Progress Policy to determine how a withdrawal will impact future financial aid eligibility.