Withdrawal and Return of Title IV Funds (R2T4) Policy

Return of Title IV Funds (R2T4)

Federal Financial Aid (Title IV Funds) is awarded to a student under the assumption that the student will attend school for the entire period of enrollment for which the aid is awarded. The term “Title IV Funds” refers to the Federal Financial Aid programs authorized under the Higher Education Act of 1965 (as amended) and includes the following programs:

  • Direct Unsubsidized Stafford Loans
  • Direct Subsidized Stafford Loans 
  • Federal Perkins Loans
  • Graduate and Parent PLUS Loans
  • Federal Pell Grant
  • Federal SEOG (Supplemental Educational Opportunity Grant)
  • TEACH Grant

Federal regulations require schools to calculate how much Federal Financial Aid a student has earned if that student withdraws in one of the following ways:

  • Completely withdraws
  • Stops attending before completing the semester
  • Receives all non-passing grades in a semester, including but not limited to F, XF, I, W, FNC, INC, WNC, NR, I/F

When a Title IV recipient withdraws

When a Title IV recipient withdraws from or ceases attending all of their classes prior to completion of 60% of the period of enrollment, federal regulations require a recalculation of any Title IV funds disbursed during that period of enrollment. The period of enrollment includes all calendar days of the semester, excluding any scheduled breaks (ex. spring break). A federally-mandated formula is use to determine the amount of federal funds the student has earned based on the number of days the student actually attended.

Title IV Example

  • Drop all or do not attend any classes before the first day of the semester, and 100% of your aid will be cancelled.
  • Withdraw or stop  attending after 20% of the semester, and 80% of your aid will be cancelled.
  • Withdraw or stop attending after 40% of the semester, and 60% of your aid will be cancelled.
  • Withdraw AFTER attending 60% of the semester, you have earned 100% of your aid.
  • If you fail to earn credits, your instructor will be asked to report your last day of attendance.

For example, if a student attends 20% of the semester he/she is considered to have earned 20% of the Title IV funds they are entitled to and 80% is required to be returned to the government.  If a student completes 60% or more of the semester he/she is considered to have earned all of their federal aid and will not be required to return any funds.

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    Important (Regarding Withdrawals)

    Withdrawals are processed by the Office of the Registrar.  For details on how to withdraw, please visit the Office of the Registrar's Withdrawal Policy for further information on the process.

    The University of Detroit Mercy tuition/fee refund policy is separate from the federal regulations that require institutions to return unearned aid. Whether or not a student receives a tuition/fee refund has no bearing on the amount he/she must repay to the federal aid programs. Please see the Tuition Refund Policy on the Student Accounting website.


    Withdrawal Date

    A student’s withdrawal date is the earlier date of the following:

    • The last date of academically-related activity provided on the drop slip or by the instructors (if the date is provided by the student it will be verified with the instructors).
    • The date the student informed Detroit Mercy of their intention to withdraw.

    For online courses just logging on to Blackboard does not signify academic activity.


    How Earned Financial Aid is Calculated

    Institutions are required to determine the percentage of Title IV aid "earned" by the student and are required to return the unearned portion to the appropriate aid programs.  Regulations require schools to perform calculations within 30 days from the date the school determines a student's complete withdrawal. When a student is required to return Title IV funds, it must be returned in the following order:

    1. Direct Unsubsidized Loan
    2. Direct Subsidized Loan
    3. Federal Perkins Loan
    4. Federal PLUS Loan
    5. Federal PELL Grant
    6. Federal Supplemental Educational Opportunity Grant (SEOG)
    7. Teacher Education Assistance for College and Higher Education Grant (TEACH)

    If the student did not receive all of the funds deemed as “earned”, they may be due a post-withdrawal disbursement.  If the student is eligible for a post-withdrawal disbursement of loan funds, the school must offer the loan funds in writing to the student within 14 days.  The student must notify the school of their interest in the loan funds.  If a student’s Title IV aid exceeds tuition and fees, creating a credit balance, a refund check will be issued to the student. If a return of loan funds is required, the school must return the funds within 45 days of the calculation. University of Detroit Mercy may automatically use all, or a portion of your post-withdrawal disbursement, including loan funds, if you accept them for current year tuition and fees.

    When the calculation is completed, Detroit Mercy will return the unearned portion of Title IV Funds that are requested from the school.  If there is a portion of unearned aid that the student is responsible for returning (via the R2T4 calculation) it is the student’s responsibility to make payment arrangements within 45 days of notification.  Failure to return funds as required can result in the loss of eligibility for future federal financial aid. A copy of the R2T4 calculation worksheet can be requested from the Financial Aid Office, in accordance with federal regulations.