Finding 1236215 (2025-002)

2025-002: Untimely Paid Credit Balance- Student Financial Assistance Cluster - (a) Federal Direct Student Loans -ALN # 84.268 - Year Ended December 31, 2025 Criteria: An institution must pay credit balances to students within fourteen days of the creation of such credit or within fourteen days of the date the institution performs the Return calculation for withdrawn students. When a valid waiver has been obtained, an institution must pay the remaining balance on loan funds by the end of the loan period and any remaining other Title IV program funds by the end of the last payment period in the award year for which the funds were awarded (34 CFR 668.164 and 668.165). Condition: Sikich tested thirty-seven files, twenty-two of which had credit balances, and two students’ credit balances were not paid in a timely manner. We consider this finding to be an instance of non-compliance. Responsible Person: Darren Zhang Corrective Action Plan: The two students identified in this finding involve the same credit balance issue that was identified during the FY2024 audit. Although these transactions occurred in 2025, they occurred before the FY2024 audit was completed in September 2025 and before the related corrective measures were implemented. Therefore, these cases reflect our previous practice rather than a recurrence of the issue after the corrective actions were implemented. Under our previous practice, based on the option selected by the student on the Credit Balance Authorization Form, a student’s credit balance could be retained in the student’s account for future charges, including charges in the following award year. During the FY2024 audit, we became aware that Title IV loan credit balances retained under a valid authorization must be paid to the student by the end of the applicable loan period. Following the completion of the FY2024 audit in September 2025, we strengthened its procedures for monitoring Title IV credit balances and implemented a compliance calendar reminder to help ensure that credit balances are refunded within the required timeframe. The school also revised its Credit Balance Authorization Form. The previous option, “Leave the funds in my account and any remaining funds from the current award year in my account for next award year,” was revised to: “Leave the funds in my account and any remaining funds from the current award year in my account up to the end of the loan period.” These corrective measures have been implemented to ensure that Title IV credit balances are properly monitored and refunded within the applicable timeframe. Implementation Date: 09/26/2025