Finding Text
Criteria Under 34 CFR 668.165(a)(3)(i), an institution must provide the required written notice of the Direct Loan disbursement no earlier than thirty (30) days before and no later than thirty (30) days after crediting the student’s ledger account, if the institution has obtained affirmative confirmation from the student as provided in 34 CFR 668.165(a)(6)(i). Condition From a sample of twenty-nine (29) students who received Direct Loans, we identified three (3) instances, pertaining to the Fall 2024 academic session, where the required written disbursement notification was not issued to each student. Cause The condition resulted from the inconsistent application of disbursement procedures during a period in which the University was transitioning to its new ERP system, Ellucian Banner. During this transition, the University had not yet fully defined or formalized the monitoring process needed to ensure that required written disbursement notices for Direct Loan recipients were generated and issued in accordance with established procedures. Effect The failure to provide the mandatory written disbursement notifications within the prescribed timeframe resulted in noncompliance with federal requirements. Consequently, affected borrowers were not formally notified of their right to cancel or reduce their loan disbursements within the required notification period. Questioned Costs None. Recommendation We recommend that the University design and implement formal monitoring procedures to ensure that required Direct Loan disbursement notifications are issued after each disbursement run. This may include establishing periodic supervisory checks, exception reports, or other controls to verify that the notification step was completed as intended and in accordance with federal requirements. Views of Responsible Officials Refer to Management's unaudited corrective action plan.