Do We Extend the Payment Period in the R2T4 Calculation When a Student Fails a Course in a Clock-Hour Program and Withdraws?

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This guidance is not award-year-specific and applies across award years.

The following return of Title IV funds (R2T4) guidance applies before and after July 1, 2021, and is not changed by the new rules in the September 2, 2020 Federal Register.

Scenario: A student in a clock-hour program fails the second 150-clock-hour course in the 450-clock-hour payment period. He withdraws during the same payment period.

Answer: You would use the original 450 clock hours in your R2T4 calculation for the student in your scenario.

We have confirmed with the U.S. Department of Education (ED) that the total hours in the payment period would not be extended in a manner similar to the requirement for nonterm credit-hour programs. The nonterm credit-hour calculation uses total days in the payment period or period of enrollment in the denominator. When a student fails a course, the student usually needs additional time to complete the credit hours in the period, so the days in the period are extended. The clock-hour calculation uses total clock hours in the payment period or period of enrollment. As in a nonterm program, when a student fails a course, they may need more time to complete the clock hours, but the clock hours they need to complete in the period (the denominator) do not change.

Student Aid Reference Desk: For additional information, try the Student Aid Reference Desk. It is a central hub of all the important financial aid resources you need with direct links to legislation, regulation, Dear Colleague Letters, and other ED and NASFAA references. It is updated on a rolling basis with the latest news and changes. Search Return of Title IV Funds.

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