Finding 1211082 (2025-001)

Finding No. 2025-001 Information on the Federal Program U.S. Department of Education - Student Financial Aid Cluster (Federal Award Year 7/1/24 to 6/30/25): Federal Direct Student Loans: (Assistance Listing Number 84.268) (Federal Grant Number P268K251808) (FAIN – not applicable) Criteria or Specific Requirement Under 34 CFR § 668.165(a), institutions are required to notify borrowers in writing (or electronically) of the anticipated date and amount of each Direct Loan disbursement, as well as the borrower’s right to cancel all or a portion of the loan. This notification must be sent within a required time frame of crediting the student’s account. Condition The College did not provide required notifications to students (or parents, where applicable) regarding the disbursement of Federal Direct Loans for the Spring semester during the award year. Questioned Costs None. Context The auditor tested a sample of 15 students who received Federal Direct Loan disbursements during the audit period by reviewing student records and institutional documentation to determine whether required disbursement notifications were provided in a timely manner. Additionally, the auditor inquired with financial aid personnel regarding relevant procedures. Of the 15 items tested, 3 were identified as exceptions where notifications were not provided for the Spring semester during the award year. Effect or Potential Effect Failure to provide timely disbursement notifications may limit borrowers’ ability to exercise their right to cancel or reduce loan amounts, potentially resulting in increased debt burden. Additionally, this represents noncompliance with federal regulations governing the administration of Title IV programs. Cause The issue appears to result from the absence of a standardized procedure or automated system to ensure timely and documented delivery of disbursement notifications for all payment periods in the award year. Identification as a Repeat Finding Not applicable. Recommendation The College should implement and document procedures to ensure that all required Direct Loan disbursement notifications are generated and delivered to students (or parents, where applicable) in a timely manner for all payment periods during the award year. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.