Finding Text
Finding 2025-003: Disbursement Notifications Program: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number (ALN): 84.268 Federal Agency: U.S. Department of Education Federal Award Identification Number: P268K251441 Federal Award Year: June 30, 2025 Criteria: Title IV regulations (34 CFR 668.165 (a)) require that if a College credits a student ledger account with Direct Loan program funds the College must notify the student or parent of the anticipated date and amount of the disbursements, the student's or parent's right to cancel all or a portion of the loan and have the loan proceeds returned to the Secretary, and the procedures and time by which the student or parent must notify the College that he or she wishes to cancel the loan or loan disbursement. Condition/Context: For one student in the sample of 25 students tested, the College was unable to provide support that timely notification was provided to the student receiving Direct Loan funds. The communication should include the date and amount of disbursements and the right and process for how to cancel all or a part of the loans. The sample was not a statistically valid sample. Cause: The College noted the employee who sent the notification left the College and they were unable to locate a copy of the notification that was sent to the student. Effect: The students or parents may not have received the required regarding their Direct Loans, including the dates and amounts and process and timing for cancelling all or a portion of the loan. Questioned Costs: $2,672 in Federal Direct Student Loans ALN 84.268. Recommendation: The College should implement a policy/control to ensure that the required notifications are provided to Direct Loan students and documentation is retained. Management's Response: The College agrees with the finding. The College is implementing a process to ensure that notifications sent are immediately retained in the College’s cloud-based system. The Office of Financial Planning will conduct monthly reviews to ensure all required information has been included in the notifications. The monthly review completion will be noted in a shared document. This procedure will be implemented during the fiscal year ending May 31, 2026.