Finding Text
Compliance Area Special Tests and Provisions – Title IV Credit Balance Refunds Criteria or Requirement Pursuant to 34 CFR § 668.164(h), a school must pay a Title IV credit balance directly to the student (or parent borrower, as applicable) as soon as possible, but no later than 14 calendar days after the credit balance occurs. A Title IV credit balance occurs when Title IV funds are credited to a student's account and exceed allowable institutional charges. Condition Found, Including Perspective During testing of 40 students receiving Title IV funds, we noted that for three students, Title IV funds were credited to the student accounts in the University's student billing system, resulting in a Title IV credit balance. Refunds were issued more than 14 calendar days after the credit balance was created. One of the three refunds tested was issued 54 days after the credit balance occurred. The remaining two refunds were also issued beyond the required 14-day timeframe. Possible Asserted Cause and Effect Based on discussions with management, the University calculated the 14-day period based on subsequent changes to loan amounts in COD and/or drawdown timing rather than from the date the Title IV credit balance was created on the student account ledger. As a result, refunds were not issued within the timeframe required by federal regulations. Failure to timely disburse Title IV credit balances may result in noncompliance with federal student financial assistance regulations and may impact students' timely access to funds. Questioned Costs None. Refunds were ultimately issued to students; however, they were not issued within the required 14- day timeframe. Statistical Validity Our sample of 40 students was selected using a nonstatistical sampling method. Therefore, results of our testing cannot be projected to the entire population. Identification of Whether the Audit Finding is a Repeat of a Finding in the Immediate Prior Audit Finding 2025-002 is not a repeat of a finding from the immediate prior audit. Recommendation We recommend that the University revise its procedures to ensure that the 14-day requirement for Title IV credit balance refunds is calculated from the date the credit balance is created on the student account ledger. Management should implement monitoring controls to track credit balances and ensure timely refunds in accordance with federal regulations.