Finding Text
Federal Program Information: Student Financial Assistance Cluster (Various Federal Assistance
Listing Numbers)
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Special Tests and Provisions – Loan Disbursement Notification - Federal regulations (34 CFR section 668.165) require that the
institution notify the student, or parent, in writing of (1) the anticipated 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; 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 or loan disbursement. Institutions that implement an affirmative confirmation process (as described in 34 CFR section 668.165 (a)(6)(i)) must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student’s account at the institution with the loans. The Federal Student Aid Handbook further clarifies that in general, there are two types of notifications a school must provide: (1) a general notification to parent Direct PLUS borrowers and all students receiving Federal Student Aid (“FSA”) funds (often referred to as award letters), and (2) a notice when FSA loan funds are credited to a student’s account.
Condition: The University did not provide award letters to parent Direct PLUS borrowers and all students receiving any FSA funds. Loan disbursement notifications were not sent to all borrowers.
Cause: Lack of administrative oversight with respect to award letters and loan disbursement notifications.
Effect: Recipients of FSA funds and/or borrowers were not properly notified of their awards or their loan disbursements and their right to cancel or decline loan awards.
Questioned Costs: None.
Context: For 22 of the 25 students selected for testing, award letters were not sent. For 25 of 25 students, loan disbursement notifications were not sent.
Repeat Finding: This is not a repeat finding from the prior year.
Recommendation: We recommend the University enhance its policies and procedures over award notifications to ensure that notifications are sent to borrowers and award recipients within the required timeframe.
Views of responsible officials and planned corrective actions: Management concurs with the finding. The University plans to review its process of notifying individuals.