Return of Title IV Funds (R2T4) – What Students Need to Know

Federal financial aid (“Title IV funds”) includes programs such as Pell Grants, SEOG, Direct Loans, and PLUS Loans. These funds are awarded with the expectation that you will attend and complete your classes for the entire semester or enrollment period.

If you withdraw early (officially or unofficially), you may not be eligible for the full amount of aid you received. In some cases, you may owe money back to Ventura County Community College District (VCCCD) or to the U.S. Department of Education.

What happens if I withdraw before finishing the semester?

  • The Financial Aid Office must calculate how much aid you “earned” based on the percentage of the term you completed.
  • If you completed more than 60% of the semester, you are considered to have earned 100% of your aid.
  • If you completed 60% or less, the percentage of the term you finished is the percentage of aid you earned.

What is the “withdrawal date”?

  • The withdrawal date is the date you officially drop your classes with Admissions & Records.
  • If you stop attending without officially withdrawing, and you receive all “F” or “W” grades, the Financial Aid Office must assume you unofficially withdrew and will use your last date of attendance (if documented) to calculate aid eligibility.

What is a Post-Withdrawal Disbursement (PWD)?

  • If you earned more aid than you received, you may be eligible for a Post-Withdrawal Disbursement.
  • VCCCD will notify you by letter within 30 days of your withdrawal if you are eligible.
  • If eligible, you must respond within 14 days to accept any loan funds. Pell or SEOG funds may be automatically applied to your tuition/fees.

What if I received more aid than I earned?

  • If you received more Title IV aid than earned, the extra amount must be returned.
  • Funds are returned in this order:
    1. Unsubsidized Direct Loans
    2. Subsidized Direct Loans
    3. Direct PLUS Loans
    4. Federal Pell Grant
    5. Federal SEOG Grant
  • VCCCD may return some funds directly to the Department of Education, and you may also be required to return funds.

Will I owe money to the college?

Yes, possibly.

  • If VCCCD returns funds for you, the balance will be added to your student account and you are responsible for repaying it.
  • This balance is not reported to the Department of Education, but it will remain as a debt owed to VCCCD until paid.
  • If unpaid, your account may be sent to the California Franchise Tax Board (COTOP), which can collect through state tax refunds, lottery winnings, or other offsets.

Can VCCCD hold my transcripts or diploma until I pay?

No.

  • Under California Education Code §66022, VCCCD cannot withhold transcripts, grades, or diplomas because of an unpaid balance.
  • However, unpaid balances may block your ability to register for future classes until resolved.

What about federal consequences?

  • If you owe funds directly to the Department of Education (called an “overpayment”), it will be reported to the National Student Loan Data System (NSLDS).
  • You will be ineligible for any federal student aid (Title IV) at any school until the debt is resolved.

Timeline for R2T4 Process

  • VCCCD will determine how much aid you earned within 30 days of your withdrawal.
  • Any unearned funds must be returned to the Department of Education within 45 days of the withdrawal determination.
  • You will be notified by mail of any balance owed or any Post-Withdrawal Disbursement you are eligible to receive.

How to Avoid Owing Money

  • Talk to Financial Aid before withdrawing. We can help you understand how leaving your classes will impact your aid.
  • Stay enrolled beyond 60% of the term if possible, since at that point you have earned 100% of your aid.
  • Respond quickly to any letters about Post-Withdrawal Disbursements or balances due.