Finding 1120839 (2024-001)

Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Direct Student Loan Program ALN 84.268 Federal Award Identification Number and Year - Various Pass through Entity - None Finding Type - Significant deficiency Repeat Finding - Yes 2023-003 Criteria - Before an institution disburses Title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each Title IV, HEA program and how and when those funds will be disbursed. If those funds include Direct Loan Program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. Except in the case of a post withdrawal disbursement made in accordance with Sec. 668.22(a)(5), if an institution credits a student's account at the institution with Federal Direct Loans, the institution must notify the student or parent of the following: (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 or loan disbursement and have the loan proceeds returned to the secretary (iii) The procedures and the time by which the student or parent must notify the institution that he or she wishes to cancel the loan or loan disbursement. Condition - The notifications related to the direct loan borrowers did not include information on the right to cancel or instructions on how to cancel the loans. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Of the 50 students tested for eligibility with Federal Direct Loans, the disbursement notification sent to the student and/or parent did not include information on the right to cancel or instructions on how to cancel for 3 students/parents during the Fall 2023 semester. Cause and Effect - The University did not have a control in place during the entire year to ensure information on the right to cancel or instructions on how to cancel Federal Direct Loans included in the borrower notifications. As a result, borrowers may not have been aware of their right to cancel and how to cancel their Federal Direct Loans. Recommendation - The University should implement controls to ensure information on the right to cancel or instructions on how to cancel Federal Direct Loans are properly included in the borrower notifications. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding and this issue was fully corrected in January 2024.