Finding Text
Finding number: 2022-002
Federal agency: U.S. Department of Education
Programs: Student Financial Assistance Cluster
Assistance Listing #: 84.268
Award year: 2022
Compliance Requirement: Eligibility
Criteria
According to 34 CFR Section 685.304 (a):
1. A school must ensure that entrance counseling is conducted with each Direct Subsidized
Loan or Direct Unsubsidized Loan student borrower prior to making the first disbursement
of the proceeds of a loan to a student borrower unless the student borrower has received a
prior Direct Subsidized Loan, Direct Unsubsidized Loan, Subsidized or Unsubsidized
Federal Stafford Loan, or Federal SLS loan.
Condition
The Federal Government requires that entrance counseling is conducted with Direct Loan
borrowers prior to their first disbursement. During our testing, we noted 3 students, out of a sample
of 40, did not have evidence that entrance counseling was performed prior to their first loan
disbursement. Our sample was not, and was not intended to be, statistically valid.
Cause
The College did not have adequate internal controls in place to ensure that entrance counseling
was conducted with Direct Loan borrowers prior to their first disbursement.
Effect
The College did not meet federal requirements and students did not complete entrance counseling
before their first disbursements.
Questioned Costs
Not applicable
Identification as a Repeat Finding, if applicable
See finding 2021-002 included in the summary schedule of prior year findings.
Recommendation
The College should implement internal control procedures to ensure entrance counseling is
completed for a student borrower before their first disbursement of their loan.
View of Responsible Officials
The College agrees with the finding.