Finding 504827 (2024-004)

Finding 2024-004 Disbursements To or On Behalf of Students Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster Federal Direct Student Loans Assistance Listing #: 84.268 Questioned Costs: None Condition For thirteen (13) of thirteen (13) (100%) disbursements tested, the Seminary did not send an award or disbursement notification as required. Criteria Per Title 34, CFR, Section 668.165, before an institution disburses Title IV, Higher Education Act of 1965 (HEA) program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each Title IV, HEA program, and how and when those funds will be disbursed. If those funds include Direct Loan program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. If an institution credits a student’s ledger account with Federal Direct Student Loan (Direct Loan) funds or Teacher Education Assistance for College and Higher Education (TEACH) Grant funds, the institution must notify the student or parent of (1) the anticipated date and amount of the disbursement, (2) the student’s or parent’s right to cancel all or a portion of that loan or grant and have the loan or grant proceeds returned to the U.S. Department of Education, and (3) the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan or grant, or loan or grant disbursement. The institution must provide the notice in writing no earlier than 30 days before, and no later than 30 days after, crediting the student’s ledger account at the institution. Cause The Seminary does not have a formalized process (automated or manual) to appropriately notify their students on their financial aid disbursements. Effect Not providing sufficient award and disbursement notifications impacts the students’ financial planning process by limiting the information available to them and their ability to exercise the option to cancel the loan. Recommendation The Seminary should develop and implement a formalized disbursement notification process that meets the compliance requirements. Views of Responsible Officials The Seminary will formalize the process of notifying students via email regarding their financial aid disbursements.