Audit 382340

Federal Program Information: Student Financial Assistance Cluster: Federal Pell Grant Program (Assistance Listing #84.063), Federal Direct Loan Program (Assistance Listing #84.268) Criteria or Specific Requirement: N. Special Tests and Provisions – Enrollment Reporting: Federal regulation 34 CFR 685.309 states that the institution shall accurately report a change in a student’s enrollment status directly to the lender or guarantee agency within 30 days if a student has graduated, withdrawn, or ceased to be enrolled (or failed to enroll) at least half-time and the school does not expect its next Roster File to NSLDS within 60 days. Condition: The University did not report students’ status changes accurately and within the required timeframe. Cause: Administrative oversight. Effect or Possible Effect: The University was not in compliance with required federal guidelines. Questioned Costs: None. Context: Program Level: Based on a sample of 40 students, 1 student’s program begin date was not accurately reported to the NSLDS. 1 student’s program enrollment effective date was not accurately reported to the NSLDS. Campus Level: Based on a sample of 40 students, 4 student’s campus level enrollment effective date was not reported to the NSLDS within the required timeframe. Identification of Repeat Finding: Yes, see finding 2024-002. Recommendation: The University should implement procedures to ensure that student status changes are reported in a timely manner. Views of Responsible Officials: The University will report to the National Student Clearing (NSC) House using regularly scheduled enrollment reports every 30 days. Suppose a student’s enrollment status is not captured in the regularly scheduled enrollment reports with the NSC. In that case, the enrollment reporting will be reported directly to the National Student Loan Database Service (NSLDS), such as after the end of the term once grades are processed. The enrollment reporting in which a student receives a failing grade of all “Fs” for a quarter will be adjusted to meet the reporting time frame.

Federal Program Information: Student Financial Assistance Cluster: Federal Direct Loan Program (Assistance Listing #84.268) Criteria or Specific Requirement:N. Special Tests and Provisions – Award notification: Federal regulation 34 CFR 668.165 states if an institution credits a student ledger account with Direct Loan, Federal Perkins Loan, or TEACH Grant program funds, the institution must notify the student or parent of (i) The anticipated date and amount of the disbursement; (ii) The student's or parent's right to cancel all or a portion of that loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement and have the loan proceeds or TEACH Grant proceeds returned to the Secretary; and (iii) The procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement, (3)(i) No earlier than 30 days before, and no later than 30 days after, crediting the student's ledger account at the institution, if the institution obtains affirmative confirmation from the student. Condition: The University did not send an award disbursement notification to the student borrower within the required timeframe. Cause: Administrative oversight. Effect or Possible Effect: The University was not in compliance with required federal guidelines. Questioned Costs: None. Context: Award Disbursement Notification: For 1 of 25 direct loan disbursements tested, the university did not provided timely notification to the student of (1) the date and amount of the disbursement; (2) the student's/parent's right to cancel; and (3)the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel. Identification of Repeat Finding: No. Recommendation: The University should implement procedures to ensure that award notifications are reported in a timely manner. Views of Responsible Officials: Incident Response and Process Impact Assessment: •Develop a standard protocol for identifying and reviewing business processes that may be impactedduring or after a data security event. •Document any suspended or delayed processes duringan incident and report to IT and follow-up. • Conduct a post-incident reconciliation of all financial aid transactions (disbursements, notifications, adjustments) to ensure completeness and compliance. • Collaborate with IT to include critical Student Account processes in the business continuity and recovery plan, ensuring prioritized restoration after any system outage or data event.

Federal Program Information: Student Financial Assistance Cluster: Federal Perkins Loans (Assistance Listing # 84.038) Criteria or Specific Requirement: N. Special Tests and Provisions – Perkins Loan Recordkeeping and Record Retention: Federal regulation 34 CFR 674.19.(e) states an institution shall keep the original promissory notes and repayment schedules until the loans are satisfied. If required to release original documents in order to enforce the loan, the institution must retain certified true copies of those documents. Condition: The University did not maintain copies of student’s promissory notes for the required timeframe. Cause: Administrative oversight. Effect or Possible Effect: The University was not in compliance with required federal guidelines. Questioned Costs: None. Context: Based on a sample of 10 Perkins Loans tested, 2 instances of a student’s Perkins master promissory note was not retained by the university as required. Identification of Repeat Finding: Yes, see finding 2024-004. Recommendation: The University should implement procedures to ensure that Perkins promissory notes are properly maintained. Views of Responsible Officials: The following steps outline the corrective actions that will be taken to resolve this issue: 1.Contact the Borrower - Life University will initiate contact with the borrower to inform them of the need to update or establish a new MPN or equivalent documentation. This will be done via the following communication channels: •Phone call (if available) •Email notification •Postal mail (if no response is received through other means) 2.Provide Clear Instructions for Documentation - The university will send a formal notice to the borrower detailing the need for a new MPN or equivalent documentation. This will include instructions on how to sign the new agreement, the importance of the MPN, and a clear explanation of the implications for the outstanding loan amount. 3. Reassign Collection Rights - Once the borrower has completed the required documentation, Life University will work with ECSI to reassign the university’s right to collect on the remaining balance. 4. Documentation Review and Verification - After the MPN is completed by the borrower, Life University will review the new MPN for completeness and accuracy. This review will ensure that the terms are correctly documented, that the borrower’s consent is properly obtained, and that the right to collect on the outstanding amount is clearly assigned. 5. Update Financial Records - Life University will update its financial records to reflect the new MPN and the re-assigned collection rights. The university will also ensure that any outstanding amounts and repayment schedules are updated accordingly. 6. Ongoing Communication and Monitoring - The university will maintain communication with the borrower throughout the process, providing reminders if necessary.