Finding 516116 (2024-003)

Questioned Costs $ -0- Finding No. 2024 003: Financial Aid Administration – Control Deficiency Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 84.268 – Federal Direct Student Loans Condition During our audit, we noted for 7 out of 10 students selected for testing, the institution failed to provide exit counseling to the borrower within a timely matter. Criteria Title 34, Section 685.304 of the CFR states that an institution must ensure that exit counseling is conducted with each Direct Subsidized Loan or Director Unsubsidized Loan borrower and graduate or professional student Direct PLUS Loan borrower shortly before the student borrower ceases at least half-time study at the institution. If a borrower withdraws from the institution without the institution’s prior knowledge or fails to complete an exit counseling session as required, the institution must ensure that exit counseling is provided through either interactive electronic means or by mailing counseling materials to the borrower at the borrower’s last known address within 30 days after learning that the borrower has withdrawn from the institution or failed to complete exit counseling as required. Cause The institution was training a staff member on the exit counseling process, however scheduling conflicts caused a delay that led to the notices being distributed one day after the required deadline. Effect In accordance with 34 CFR 668.84, the Secretary of Education may levy fines and/or penalties on the institution or suspend future participation in federal student financial assistance programs for failure to comply with the requirements applicable to Title IV of the HEA. Context A sample of 10 changes were selected for audit from a population of 35 student enrollment changes. Our test found 7 exit counseling sessions conducted with borrowers that were not performed in a timely manner. Our sample was a statistically valid sample. Repeat Finding This is a not a repeat finding. Recommendation We recommend that the institution provide exit counseling to borrowers timely. Views of Responsible Officials and Planned Corrective Actions The institution has hired and trained additional personnel to assist in the timely execution of exit counseling to borrowers. The institution has also developed written instructions to assist in the execution of exit counseling to borrowers in the event of future personnel turnover.