Finding 1141649 (2024-002)

Finding 2024-002 - Special Tests and Provisions - Federal Direct Loan Program Student Notification - Significant Deficiency Name of Federal Agency: U.S. Department of Education Federal Program Name: Federal Direct Student Loans Assistance Listing Number: 84.268 Federal Award Identification Number and Year: P268K243382 2024 Name of Pass-through Entity: N/A Criteria According to the Federal Register (34 CFR 668.165 (a)(3)), an institution must provide notice to a participating student no earlier than 30 days before, and no later than seven days after, crediting the student's account with Federal Direct Loan Program proceeds at the institution, if the institution does not receive affirmative confirmation from the student. Condition We noted 1 instance where the Institute did not send out the required notifications regarding Federal Direct Student Loan Program proceeds that had been credited to participating student's accounts within prescribed timeframes in accordance with U.S. Department of Education regulations. Cause There was an administrative oversight that caused the above mentioned condition. Effect or Potential Effect The effect of these findings is noncompliance with U.S. Department of Education regulations regarding special tests and provisions. Questioned Costs None Context A total of 36 students who were credited with Federal Direct Loan Program proceeds during the year were included in the randomly selected sample of 40 participating students. Our testing noted that 1 of the students with Federal Direct Loan Program proceeds credited to their account were not provided with the required notifications. Identification as a repeat finding Yes 2022-005 Recommendation We recommend the Institute review and revise, its current procedures and have controls in place to ensure required notifications regarding Federal Direct Loan Program proceeds are provided to participating students. Views of Responsible Officials The failure to timely send out the required notification of Federal Direct Student Loan Program proceeds credited to one student’s account, as noted in the auditor’s findings, was an administrative oversight. In May 2025, the Institute reviewed and revised its current procedures to ensure that all required notifications are made. Under the revised procedures, an employee independent from the student loan proceed crediting notification process is to review that notifications are sent out within prescribed time frames in accordance with U.S. Department of Education regulations to all students receiving and being credited with Federal Direct Loan Program amounts and that copies of the notifications are maintained in each applicable student’s file.