Return of Title IV Funds Policy

Overview and General Requirements

The federal Higher Education (HEA) of 1965 was amended in 1998 and new regulations were established with regard to Title IV student financial aid programs. Students earn their Title IV federal financial aid by attending class and if they were not enrolled long enough to earn all their aid, the ‘unearned’ portion must be returned to the appropriate Title IV program.

Title IV funds are awarded and disbursed based on the assumption that a student will attend courses for the entire term (summer, fall or spring) and is therefore eligible for the entire amount of the disbursement for that payment period or period of enrollment. A student who withdraws from all courses and received Title IV funds must have a R2T4 calculation performed to determine the percentage of aid that was actually earned based on the amount of time the student was enrolled. Students are entitled to aid that was earned. Mt. SAC will return any unearned aid to appropriate Title IV program. This adjustment and process is most often referred to as performing the return of Title IV funds or simply “R2T4”.

R2T4 regulations are complex and any person assigned to monitor and perform the R2T4 process is expected to understand and accurately interpret the R2T4 principles and regulations. The most comprehensive guide to the R2T4 regulations can be found in the Federal Student Aid Handbook Volume 5/Chapter 1 on the IFAP website https://ifap.ed.gov/ifap/ or at the U.S. Government Print Office (GPO) Electronic Code of Federal Regulations website https://www.ecfr.gov Code 34 CFR 668.22.

Financial aid programs subject to the R2T4 requirements include: