Finding Text
Finding number: 2024-002
Federal agency: U.S. Department of Education
Programs: Federal Direct Student Loans
Assistance listing #: 84.268
Award year: 2024
Compliance requirement: Eligibility
Criteria
According to 34 CFR 668.165(a) Notices and authorizations:
(2) Except in the case of a post-withdrawal disbursement made in accordance with § 668.22(a)(5), 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) The institution must provide the notice described in paragraph (a)(2) of this section in writing—
(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 under paragraph (a)(6)(i) of this section; or
(ii) No earlier than 30 days before, and no later than seven days after, crediting the student's ledger account at the institution, if the institution does not obtain affirmative confirmation from the student under paragraph (a)(6)(i) of this section.
Condition
The Federal Government requires institutions to notify students if the student’s ledger account is credited with a Direct Loan. This notification is to happen within 30 days before and after for affirmative confirmation and no later than seven days after without affirmative confirmation. During our testing, we noted 18 students, out of a sample of 40, whose notifications did not occur within the required time period. Our sample was not, and was not intended to be, statistically valid.
Cause
The College did not have adequate internal controls in place to notify students or their parents of credits on the students’ accounts. As a result, the College did not send notifications to students during the Fall 2023 semester.
Effect
The College did not report student account ledger credits to students or parents within the required time frame.
Questioned Costs
Not applicable
Identification as a Repeat Finding, if applicable
Not applicable.
Recommendation
The College should update their procedures for notifying students when loan disbursements are credited to accounts. These procedures should include a timeline that will allow timely notification to students.
View of Responsible Officials
The College agrees with the finding.