Finding Text
Finding 2025-002 Federal Program Information: Student Financial Aid Cluster (ALN: Various) Criteria or Specific Requirement: N. Special Tests and Provisions – Disbursements to or on Behalf of Students – Notification of Disbursements - When Direct Loans or TEACH funds are being credited to a student’s account, the institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement (a minimum of 14 or 30 days depending on confirmation process). The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check (34 CFR 668.165). Institutions that implement an affirmative confirmation process (as described in 34 CFR 668.165 (a)(6)(i)) must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student’s account at the institution with Direct Loan or TEACH Grants. Condition: For 1 student selected for testing, a disbursement notification was not sent to the student or parent within the required timeframe of 30 days. Cause: Administrative oversight. Effect or Possible Effect: The College was not in compliance with the requirements for notifying students or parents of the disbursement of federal loan funds to their account. Questioned Costs: $0 Context: 1 out of 25 students selected for testing. Identification of Repeat Finding: There was no similar finding identified during the prior year. Recommendation: We recommend the College notify students or parents within the 30 day period. Views of Responsible Officials: Management acknowledges that for one student, the required federal direct loan disbursement notification was not sent within the required timeframe. After the parent’s PLUS loan was denied in April 2025, the student was offered an additional unsubsidized loan, which was accepted on 5/7/2025. The manually generated notification for the 5/8/2025 disbursement was inadvertently missed being sent out. We believe this oversight was an isolated incident due to the OFA’s unusually demanding April/May as noted in the previous finding. To mitigate this issue going forward, the OFA will remove the need for manual intervention by implementing an automated notification process utilizing the built-in scheduler functionality in PowerFAIDS.