Finding Text
Federal Program:
U.S. Department of Education:
Student Financial Aid Cluster:
Direct Loan Program, Assistance Listing 84.268
Teacher Education Assistance for College and Higher Education Grant (TEACH Grant), Assistance Listing 84.379
Criteria: The College must comply with 36 CFR Section 686.165(2).
Condition: We tested 26 Direct Loan recipients and 1 TEACH Grant recipient for eligibility, and noted that the 26 and 1 sampled, respectively, were not notified of their right to cancel their loan or TEACH Grant, or notified of the the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan or TEACH Grant.
Cause: The College did not have a procedure in place to properly notify students or parents of their right to cancel their loan or TEACH Grant, and the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel their loan or TEACH Grant.
Effect: The provisions of 36 CFR Section 686.165(2) were not followed and thus a total of 27 students were not notified of their right to cancel their loan or TEACH Grant, nor were they notified of the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan or TEACH Grant.
Questioned Costs: There were no questioned costs associated with this finding.
Recommendation: We recommend that the College update their disbursement letter to students or parents to include wording about the right to cancel their loan or TEACH Grant and the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan or TEACH Grant.
View of responsible officials and planned corrective actions: The disbursement letter that we previously had notified they had the right to decline their loans. As with the recommendation of our auditor, the letters wording has already been changed from the right to decline their loan to the right to cancel their loan. Letter also states that the request must be received by KWC within 14 days of the date on the notice.