Federal Program:
U.S. Department of Education - Student Financial Assistance Cluster Federal Direct Loan Program, 84.268
Criteria: The College is required to comply with 34 CFR Section 685.304(a).
Condition: During our testing of eligibility, we selected 40 samples and noted two instances where a student was disbursed a direct loan prior to entrance counseling being completed.
Cause: The College did not have controls in place to ensure entrance counseling was completed prior to a loan disbursement.
Effect: The College did not follow federal regulations regarding loan disbursements. The provisions of 34 CFR Section 385.304(a) were not followed and thus two students were improperly disbursed a direct loan.
Questioned Costs: There are a total of $9,250 of questioned costs associated with this finding. $5,192j related to subsidized loans and $4,058 related to unsubsidized loans.
Recommendation: We recommend that the College implement a control to ensure loans are not disbursed to students until entrance counseling has been completed by the student.
Corrective Action Taken or Planned: The College agrees with the finding. Controls have already been implemented to ensure that compliance with all federal and state requirements are met before aid is disbursed.
Individual Responsible for Corrective Action:
Katie Palmer, Director of Financial Planning
Expected Completion Date: November 2024