Return to Title IV Funding (Federal)


Return to Title IV Funding

The Financial Aid Office is required by federal statute to perform a Return of Title IV Funds (R2T4) calculation for all federal aid recipients who withdraw, drop out, or are dismissed from all courses prior to completing more than 60% of a payment period or term. LBCC will use the date of complete withdrawal or drop (official or unofficial) to determine the amount of federal aid “earned” based on the amount of time the student was enrolled.

The Federal Return of Title IV Funds (R2T4) Formula is as follows: Percentage of enrollment period completed  =  Number of days completed / Total number of days in the semester/term

The “unearned” amount of Title IV aid is calculated by subtracting the amount of Title IV aid “earned” by the student from the amount of Title IV aid that was disbursed to the student. Any aid received in excess of the “earned” amount is considered “unearned”. The “unearned” financial aid must be returned to the respective federal programs in the following order:

  • Unsubsidized Direct Loans
  • Subsidized Direct Loans
  • Federal Pell Grant
  • All other Federal Grants

LBCC is required to perform this calculation within 30 days of the date the school determines that a student has completely withdrawn. LBCC must return the funds within 45 days of the calculation. Please keep in mind that when the funds are returned, the student will owe a balance to LBCC.

Once 60% of the semester 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.

Post Withdrawal Disbursement

When the R2T4 calculation results in students “earning” more aid than what was disbursed to him/her, the Financial Aid Office will offer the students a Post Withdrawal Disbursement (PWD) for the additional aid “earned.” Students will have 14 days from notification date to “accept” the PWD. PWDs will not be processed after the 14 days period has elapsed.

Title IV Repayment Policy

  1.  A bill will be sent with the amount due. You will not be eligible for further financial aid funds until the overpayment is paid in full. In addition, your school records will be placed on “HOLD.” You will not be able to register for classes or request academic transcripts until this bill has been paid in full.
  2. If you do not pay this bill or make payment arrangements, your overpayment will be reported to the National Student Loan Data System. NSLDS notifies all other colleges and universities that you now owe money. You will be ineligible to receive further financial aid, at any college. The NSLDS notification will be removed when your bill is paid in full.
  3. If you continue to ignore this bill, your account will be turned over to the Department of Education for all future collection. The Department of Education has the ability to garnish your wages, withhold your tax refunds, send your account to a collection agency, and take you to court to recover the money owed.
You must pay this bill in full within 30 days.