Audit 24183

Finding 2022-001 Exit Counseling Condition: The Colleges did not timely perform the required FDL exit counseling for 10 of 20 students in the sample requiring exit counseling. See Schedule of Findings and Questioned Costs for chart/table. Criteria: An in-person or on-line exit counseling session is required with each FDL borrower shortly before the student ceases enrollment on at least a halftime basis in order to emphasize the obligation and consequences of default. General information such as repayment options, consolidation, and debt management strategies must also be provided to the borrower. If the borrower withdraws/graduates without an institution?s prior knowledge and did not perform the exit counseling session, the institution must notify the borrower within 30 days after learning the borrower has withdrawn/graduated of their obligation. Institutions must document, in each student?s file, that the exit counseling or notification has been completed. Cause: This instance of noncompliance was due to the Institution not following its established polices and procedures as it pertains to exit counseling. Effect: An institution?s failure to provide exit loan counseling increases the possibility of a student defaulting on his or her loan. FDLs that go into default status create increased expense for the U.S. Department of Education. Recommendation: The Colleges should review and revise its procedures for performing exit counseling for all FDL recipients upon withdrawal/graduation. Views of Responsible Officials: The Colleges concur with the finding. See Corrective Action Plan.

Finding 2022-001 Exit Counseling Condition: The Colleges did not timely perform the required FDL exit counseling for 10 of 20 students in the sample requiring exit counseling. See Schedule of Findings and Questioned Costs for chart/table. Criteria: An in-person or on-line exit counseling session is required with each FDL borrower shortly before the student ceases enrollment on at least a halftime basis in order to emphasize the obligation and consequences of default. General information such as repayment options, consolidation, and debt management strategies must also be provided to the borrower. If the borrower withdraws/graduates without an institution?s prior knowledge and did not perform the exit counseling session, the institution must notify the borrower within 30 days after learning the borrower has withdrawn/graduated of their obligation. Institutions must document, in each student?s file, that the exit counseling or notification has been completed. Cause: This instance of noncompliance was due to the Institution not following its established polices and procedures as it pertains to exit counseling. Effect: An institution?s failure to provide exit loan counseling increases the possibility of a student defaulting on his or her loan. FDLs that go into default status create increased expense for the U.S. Department of Education. Recommendation: The Colleges should review and revise its procedures for performing exit counseling for all FDL recipients upon withdrawal/graduation. Views of Responsible Officials: The Colleges concur with the finding. See Corrective Action Plan.