The U.S. Department of Education has updated the Return to Title IV (R2T4) regulations (34 CFR 668.22), effective July 1, 2026, with an option for early implementation starting February 3, 2025 on certain regulations. These changes aim to provide more flexibility for institutions while maintaining compliance with federal guidelines.
Let’s break down the key updates that can be implemented as early as February 3, 2025:
1. New Withdrawal Exemption
Institutions can now exempt certain students from withdrawal calculations if they meet all of the following criteria:
- If the Institution treats the student as never having attended any courses during the payment period or period of enrollment (period). (i.e. backs the student out of class);
- All Title IV funds, including any disbursed credit balances, for the period are returned to the Department of Education;
- The institution fully refunds all student charges for the period;
- And the Institution writes off any student balance remaining for the period.
Key Points:
- This exemption is optional.
- This exemption applies to all program types, not just modular programs.
- Institutions can apply this exemption on a case-by-case basis, but must document it in their policies.
- Supporting documentation of the exemption is maintained for each student. (We’ll be checking!)
- Further guidance from the Department of Education will clarify NSLDS reporting for these students.
2. Leave of Absence for Eligible Prison Education Programs (PEPs)
Confined or incarcerated individuals in eligible PEPs now have more flexibility during leaves of absence (LOA). These individuals are now permitted to return at a different point in eligible PEPs rather than resume where they left off. This differs from traditional LOAs where the student must return at the same point in their program.
What This Means for Your Institution?
These changes offer valuable tools for managing student situations while ensuring compliance. If implementing early (starting February 3, 2025):
- Update policies to reflect the new withdrawal exemption and leave of absence rules.
- Train staff on how to correctly apply these exemptions and rules.
- Maintain detailed documentation for each student to support exemption and LOA decisions.
- Stay informed about upcoming guidance from the Department of Education, particularly regarding NSLDS reporting for exemptions.
The updated R2T4 regulations aim to balance flexibility for institutions with the proper handling of Title IV funds. By proactively updating policies and training staff, institutions can better support their students and ensure compliance with these important changes.
We will update you on the remaining regulation changes, effective for July 1, 2026, later this year. Stay tuned!
