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Business and Policy Areas
Business and Policy Areas

ED Provides Additional Guidance on R2T4 Changes

July 28, 2011

The program integrity regulations issued by the Department of Education on October 29, 2010, included changes to the rules governing the return of Title IV funds (R2T4) when students drop out. The new regulations, which took effect on July 1, make significant modifications in two areas: (1) withdrawals when the student was enrolled in courses taught in modules, and (2) when an institution is considered to be “required to take attendance.”

ED followed up on July 20 with a Dear Colleague letter (GEN-11-14) that provides answers to more than 20 questions about the requirements. One clarification specifies that the new rules apply to payment periods or periods of enrollment that begin on or after the effective date of July 1. They do not apply to crossover payment periods that began before July 1, even if students received aid from the 2011-12 award year. This is welcome, since summer terms at many institutions are made up of two sessions that are combined into one term, so most classes offered are considered modules that will trigger the new requirements.

Programs Offered in Modules

Under the old rules, if a student attending a term-based program completed any course within the term, the student was not considered a withdrawal under the R2T4 rules. This held true for modular courses as well, so a student who completed the first of four three-credit courses running consecutively and then withdrew a week into the second module was not subject to R2T4 (although his eligibility for aid would have had to be recalculated for the classes that were not started). Now, under the new rules, an aided student is considered to have withdrawn if she fails to complete all the days in the payment period that she was scheduled to attend. If a student withdraws from a class and is not concurrently attending any other classes, the student will be considered to have withdrawn from school and be subject to R2T4 unless the student reaffirms in writing his intention to attend a module later in the term. In addition, when the institution makes a R2T4 calculation for a student enrolled in classes that do not span the entire term, the “total number of calendar days” in the term is the number of days, plus any breaks of fewer than five days, that the student was scheduled to attend at the time the student withdrew.

Among the points in the Dear Colleague letter are the following.

  • Whether or not a student’s program is offered in modules is a student-specific determination that needs to be made for each term.
  • R2T4 calculations are based on the student’s scheduled attendance at the time of withdrawal. If a student drops future modular classes before he ceases attendance, then they would no longer count in figuring out the days in the period that he was scheduled to attend (the denominator in the ratio used to determine if the student attended at least 60 percent of the period). Changes made after the student ceases attendance don’t matter.
  • If a student drops a class, and is not taking any others at the same time but is scheduled to take another modular class that begins later, the institution must obtain a written, affirmative confirmation from the student “at the time that would have been a withdrawal” to avoid having to process the student as a withdrawal for R2T4 purposes. The confirmation may take place online, should be completed close to the date the student ceased attendance in the earlier class and before the deadline for the institution to return Title IV funds.

Required to Take Attendance

The new rules also greatly expand the definition of an “institution that is required to take attendance” to include cases where:

  • An outside entity requires it to take attendance
  • The institution itself voluntarily requires its faculty to take attendance
  • The institution or an outside entity has a requirement that can only be met by taking attendance, such as requiring that students in a particular program demonstrate class attendance

In addition, institutions that take attendance for only some subgroup of students or for a limited period of time (perhaps the first few weeks of a term) will have to follow the rules for institutions that are required to take attendance when determining withdrawal dates for some students or during certain time periods. The Higher Education Act stipulates that an institution that is required to take attendance use its attendance records to determine a student’s date of withdrawal.

The Dear Colleague letter discusses several points including the following

  • An institution is only “required to take attendance” in relation to a program if attendance taking is required for all classes in the program for a period of time.
  • If an institution has a census period for determining whether each student attended at least once, but does not continue to take attendance throughout the period, it is not considered to be “required to take attendance.”
  • If a student misses class at the end of a limited period of attendance taking, and later officially withdraws, the institution must show that the student attended class between the end of the attendance-taking period and the withdrawal date.


Excerpts from the Program Integrity Regulations: §668.22 Treatment of Title IV funds when a student withdraws.


Anne Gross
Vice President, Regulatory Affairs