Finding Text
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 25 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: This is a new finding for FY2024.
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.