Finding 1237669 (2025-001)

Condition Found Methodist College did not accurately and/or timely report student address changes and student enrollment status changes at both the campus-level and program-level to the National Student Loan Data System (NSLDS). The U.S. Department of Education (USDE) uses enrollment data reported by the College to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in-school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. Additionally, changes in a student’s permanent address are used by USDE to service loans. During our testing of enrollment reporting at the College for a sample of 26 students, we noted that submissions for 21 of them were made to NSLDS outside of the required number of days. Further, we noted review controls were not implemented in the period to ensure enrollment and student data submitted to NSLDS was accurate and sent in accordance with required timeframes. The College disbursed FDL loans to 235 students and Pell grants to 204 students during the year ended December 31, 2025 for which enrollment reporting requirements applied. The number of undergraduate students enrolled in the College during fiscal year Criteria According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via NSLDS within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include establishing procedures to ensure student campus and program-level enrollment status changes and address changes are accurately and timely reported to the NSLDS. Cause In discussing these conditions with College officials, they stated that NSC was part of a security breach and when they were fixing their processes, Methodist College got incorrectly linked to Methodist University in Fayetteville, NC causing submissions to report incorrectly on the NSLDS end. Possible Asserted Effect Inaccurate and delayed submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in-school deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Repeat Finding A similar finding was reported in the prior year audit (2024-002). Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the College review its procedures to ensure timely and accurate reporting of student information and enrollment status information to the NSLDS. Views of Carle management: Methodist College agrees with the finding regarding inaccurate and delayed submissions. The delays were related to the NSC security breach and incorrect institution linking. These issues were resolved, and all submissions were brought current by the end of 2025.