Finding Text
2023-003: Student Financial Aid Cluster - Special Tests: Disbursements to, or on Behalf of, Students (Significant Deficiency)
Assistance Listing Number and Title: #84.268, Federal Direct Student Loans
Federal Agency Name: U.S. Department of Education
Pass-Through Entity Name (if applicable): N/A
Award Number/Name: N/A
Award Year: July 1, 2022 - June 30, 2023
Criteria: Per 34 CFR 668.165, if the institution disburses funds that include Federal Direct Loan Program funds, the notice must indicate which funds are from subsidized loans, unsubsidized loans, and PLUS loans. The institution must notify the student or parent of (i) the anticipated date and amount of the disbursement, (ii) the student’s or parent’s right to cancel all or a portion of that loan, and (iii) the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. The institution must provide the notice no earlier than 30 days before, and no later than 30 days after, crediting the student’s account at the institution.
Condition/context: During our review of students who were disbursed Federal direct loans, we noted two students in which the College did not provide written notification to borrowers regarding loan disbursements within 30 days prior/subsequent to the disbursement. Both instances of missed notification occurred in spring 2023.
Cause: The Student Financial Aid Office did not have sufficient controls in place to ensure that notifications were provided and records were maintained.
Effect: The borrower is not aware of the anticipated disbursement date or amount, their right to cancel all or a portion of the loan, or the procedures to follow to cancel the loan if necessary.
Questioned costs: None.
Identification as a repeat finding: No.
Recommendation: The Student Financial Aid Office should develop a process to ensure that timely written notification is provided to borrowers regarding loan disbursements and that documentation of notification is maintained.
Views of responsible officials and planned corrective action: Management concurs with the finding. See Exhibit I for the corrective action plan.