Finding Text
Federal Assistance Listing Number: 84.268 Federal Direct Student Loans
Criteria: Per 34 CFR 668.165(a)(3), the College must notify the student or parent of an anticipated Direct Loan disbursement in writing no earlier than 30 days before, and no later than 30 days after, disbursing the loan to the student’s account.
Condition: For 1 out of 40 students tested, no notification was sent to the student or parent for the Direct PLUS Loan disbursement made on May 31, 2024.
Cause: The College’s previous control process over notification letters was to run a search in the Financial Aid module by selecting a criteria that identifies an award as “Federal.” In May 2024, users of the report were not aware the criteria was changed in the Financial Aid module for the Grad and Parent Plus loans, therefore rendering the criteria and College’s current control of monitoring notification letters ineffective for such student loan disbursements after May 2024.
Effect: The College is not in compliance with the federal regulations regarding the notification of Direct Loan disbursements to students.
Prevalence: The College ran a report of Direct Loan disbursements made during fiscal year 2024, noting that the required communications had not timely been sent out for 43 Direct Loan disbursements that took place from May 31, 2024 through June 30, 2024.
Recommendation: The College should enhance their control processes to ensure that all Direct Loan disbursements are identified in a timely manner, even through system changes.
Management’s Response and Planned Corrective Action: Upon discovery of the change in criteria, management identified the students that had been impacted and sent disbursement notifications to students the next day, on July 31, 2024. Management has implemented in their control process an additional step to compare reports of Direct Loan disbursements between the Student Information and Financial Aid systems to identify any discrepancies going forward.