Finding Text
Finding 2024-002 - Special Tests and Provisions - Federal Direct Loan Program Student
Notification - Significant Deficiency
Name of Federal Agency: U.S. Department of Education
Federal Program Name: Federal Direct Student Loans
Assistance Listing Number: 84.268
Federal Award Identification Number and Year: P268K243382 2024
Name of Pass-through Entity: N/A
Criteria
According to the Federal Register (34 CFR 668.165 (a)(3)), an institution must provide notice to a
participating student no earlier than 30 days before, and no later than seven days after, crediting the
student's account with Federal Direct Loan Program proceeds at the institution, if the institution does
not receive affirmative confirmation from the student.
Condition
We noted 1 instance where the Institute did not send out the required notifications regarding Federal
Direct Student Loan Program proceeds that had been credited to participating student's accounts within
prescribed timeframes in accordance with U.S. Department of Education regulations.
Cause
There was an administrative oversight that caused the above mentioned condition.
Effect or Potential Effect
The effect of these findings is noncompliance with U.S. Department of Education regulations regarding
special tests and provisions.
Questioned Costs
None Context
A total of 36 students who were credited with Federal Direct Loan Program proceeds during the year
were included in the randomly selected sample of 40 participating students. Our testing noted that 1 of
the students with Federal Direct Loan Program proceeds credited to their account were not provided
with the required notifications.
Identification as a repeat finding
Yes 2022-005
Recommendation
We recommend the Institute review and revise, its current procedures and have controls in place to
ensure required notifications regarding Federal Direct Loan Program proceeds are provided to
participating students.
Views of Responsible Officials
The failure to timely send out the required notification of Federal Direct Student Loan Program
proceeds credited to one student’s account, as noted in the auditor’s findings, was an administrative
oversight. In May 2025, the Institute reviewed and revised its current procedures to ensure that all
required notifications are made. Under the revised procedures, an employee independent from the
student loan proceed crediting notification process is to review that notifications are sent out within
prescribed time frames in accordance with U.S. Department of Education regulations to all students
receiving and being credited with Federal Direct Loan Program amounts and that copies of the
notifications are maintained in each applicable student’s file.