Finding Text
Finding 2022-005 Plus Notice Deficiencies - Noncompliance Criteria: Per 34 CFR 668.165, the Institution must notify the borrower in writing (paper or electronically) of the anticipated date and amount of the disbursement, student?s or parent?s right to cancel all or part of the loan or disbursement, and the procedures and deadlines by which the student or parent must notify the school that he or she wishes to cancel the direct loan, loan disbursement. Statement of Condition: In four (4) of four (4) files tested with Parent Plus Loans, the Institution did not meet the requirements of notifications, per 34 CFR 668.165(a)(2)-(3) was deficient. In each case, the Instiutition sent one letter to the parent which included the total amount of the Plus loan approval for the entire period, vs. the disbursement amounts (by pay period with the anticipated date for each). The Institution has indicated that for each, a copy of the student?s notification was attached to the parent letters. Accepting this explanation of an attachment, the deficiencies are as follows: ? The parent borrower did not receive notification of the amount of and date for each disbursement. The letter that was provided to the parent was two pages. The first page included the total approved Plus amount (all payment periods), not the disbursement amount for the particular payment period and accordingly, the particular disbursement. The issue here is not gross vs. net considering fees but rather that the letter provided to each parent borrower was not based on individual disbursements but rather the Plus loan approval amount in aggregate. The second page was the notification addressed to the student for the first disbursement (this was not repeated with the second disbursement). The notification included an aggregate amount of all direct loans and did not specify the amount of the Plus loan. ? The parent did not receive a notification for each disbursement as the notification that was attached in each case, to the parent borrower letter, was at the time of the first disbursement. Three (3) of the four (4) students had two disbursements; no additional letter was sent to the parent at the time of the second notification. If a school does not obtain affirmative confirmation, a notification must be sent no earlier than 30 days before and no later than 7 days after crediting the student?s account. Notwithstanding the other deficiencies, the date of the letter does not meet the requirements of the date of the notification for each of the second disbursements. ? The parent did not receive a notification that informed the parent of the parent?s right to cancel. The notification that was attached to the aforementioned letter to the parent regarding the total approved Plus amount was addressed to the student and said ?you have the right to cancel??. There is no mention in the parent letter of attached notification that provides information about the parent?s right to cancel. Cause: Based on the views of the responsible officials to this finding, the cause appears to be a lack of understanding of the requirements. Management?s position is that the notification can be sent to either the parent OR the student and so they believe they have complied with the requirement. Effect: Notifications to parents were not sent which met both the language and timing regulations of Plus notifications. The parent may or may not have been aware of the disbursement amounts, disbursement dates, or the parent?s right to cancel. Description of nature and extent of the issues reported: Four students had plus loans provided by a parent borrower. A total of seven disbursements were made to the four students. Notification regulations in 34 CFR 668.165 (a) were not met in seven (7) of the seven (7) instances.