Finding Text
Student Financial Assistance Cluster U.S. Department of Education Federal Direct Student Loans 84.268 Award Year 2022 Criteria or Specific Requirement - Special Tests and Provisions - Disbursements To or On Behalf of Students According to 34 CFR section 668.165, the College is required to notify the student, or parent in writing of (1) the date and amount of the disbursement; (2) the student?s right, or parent?s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. Condition - The College did not ensure communication of all three elements to students before disbursement of the direct student loans. Questioned Costs - None. Context - Out of a population of 286 students receiving federal awards during the year, a sample of 25 students was selected for testing. Out of these 25 students selected for testing, there were seven instances in which the College did not send notification to the student or parent of the required conditions. The sample was not, and was not intended to be, a statistically valid sample. Effect - Students or parents were not notified of disbursements or notified of their right to cancel all or a portion of the loan disbursement. Cause - The College had a lack of policy, procedure, and follow-up to ensure communications were sent. Identification as a Repeat Finding - Yes, see findings 2021-003 and 2020-006. Recommendation - The College should establish a process and controls to ensure disbursement notification letters are sent when required to ensure ongoing compliance. Views of Responsible Officials and Planned Corrective Actions - This was neglected due to staffing issues and high turnover. Disbursement Letters are sent to students as they request Direct Loan funding amounts. The Disbursement Letter includes the three elements as required by DOE (per FSA handbook).