Finding Text
Finding 2024-003
Federal Program:
U.S. Department of Education - Student Financial Assistance Cluster
Federal Direct Loan Program, 84.268
Criteria: The College is required to comply with 34 CFR Section 685.304(a).
Condition: During our testing of eligibility, we selected 40 samples and noted two instances where a student was disbursed a direct loan prior to entrance counseling being completed.
Cause: The College did not have controls in place to ensure entrance counseling was completed prior to a loan disbursement.
Effect: The College did not follow federal regulations regarding loan disbursements. The provisions of 34 CFR Section 385.304(a) were not followed and thus two students improperly disbursed a direct loan.
Questioned Costs: There are a total of $9,250 of questioned costs associated with this finding. $5,192 related to subsidized loans and $4,058 related to unsubsidized loans.
Recommendation: We recommend that the College implement a control to ensure loans are not disbursed to students until entrance counseling has been completed by the student.
View of Responsible Officials: The College agrees with the finding. Controls have already been implemented to ensure that compliance with all federal and state requirements are met before aid is disbursed.