Finding Text
Assistance Listing Number, Federal Agency, and Program Name - 84.268, U.S. Department of Education, Federal Direct Student Loans Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes - 2021-004 Criteria - The Seminary must notify the student or parent in writing of the following related to the student's direct loan: (1) the 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 to the holder of that loan; 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 in accordance with 34 CFR 668.165. Condition - Of the 16 students who received disbursements selected for testing, the Seminary did not notify 11 students or parents, as applicable, that received direct federal loans within the required 30 days. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Out of a sample of 16, our testing identified that, of 11 students who received federal direct loans, 1 was not notified at all and 10 were not notified timely because the Seminary did not have a process in place for the full year. Cause and Effect - The Seminary did not have formal procedures and controls in place to notify borrowers of their amounts, rights, and procedures related to the disbursement of federal direct loans for the full year. Recommendation - We recommend the Seminary maintain a procedure and control in place to ensure that, upon each disbursement of direct loans, the Seminary notifies the borrower of the required elements in accordance with the loan program. Views of Responsible Officials and Planned Corrective Actions - The financial aid director has already set up a disbursement notification email to be sent out of the new financial aid management system (JFA). Shortly after Title IV disbursements are made, the director will send out the disbursement notification to any group of students who have had aid disbursed. Each time a disbursement is made, these notifications will be sent to the necessary students. These notifications will be documented in each student's records.