Finding Text
Criteria
According to 34 CFR Section 685.304(b)(1):
A school must ensure that exit counseling is conducted with each Direct Subsidized Loan or
Direct 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 school.
According to 34 CFR Section 685.304(b)(7):
The school must maintain documentation substantiating the school's compliance with this section
for each student borrower.
Condition
Federal regulations require institutions to perform exit counseling for all graduates and withdrawn
students who borrow Federal Direct Student Loans.
During our testing of forty students, one student who was awarded a Federal Direct Student Loan and
graduated in the fiscal year did not receive exit counseling.
Cause
During review of Federal Direct Student Loan borrowers who graduated, the College recognized that only
students who had a manual Direct Student Loan exit requirement (“DLEXIT”) added into their record were
sent the required exit counseling notification letter. The DLEXIT requirement added to the applicable
student recorded is needed to trigger creation and mailing of the Director Loan exiting counseling letter.
The College became aware that job code (“RRREXIT”) out of their Enterprise Resource Planning system
(“Banner”) had not been manually run. RRREXIT is a Banner job that identifies Direct Student Loan
borrowers who have graduated, dropped below half-time, or withdrew completely and adds the DLEXIT
requirement onto the student’s records. The staff member responsible for running the entire Direct
Student Loan counseling letter process did not carry that part of the process.
Effect
The College did not provide exit counseling to a graduate student who was awarded Federal Direct
Student Loans.
Questioned Costs
Not applicable
Perspective
Our sample was not, and was not intended to be, statistically valid. Of forty students selected for testing,
one student, or 2.5% of our sample, did not receive exit counseling.
Identification as a Repeat Finding, if applicable
Not applicable Recommendation
We recommend that management of the College review, and if necessary, update the policies and
procedures for Federal Direct Student Loan exit counseling notifications. Additionally, the staff members
involved in process should have proper training and be made aware of all the compliance requirements
for which they are responsible.
View of Responsible Officials
The College agrees with the finding.