Finding Text
Criteria: Regulations require the Institution ensure exit counseling is conducted with each Direct Subsidized
Loan or Direct Unsubsidized Loan borrower and graduate borrower shortly before the student borrower
ceases at least half-time study. Exit counseling must be conducted within 30 days after the school learns the
student borrower has withdrawn from school or failed to complete the exit counseling [34 CFR 685.304(b),
(1) & 34 CFR 674.42(b)].
Condition: For 11 of student files examined where students with direct loans withdrew during FY23, we did
not find satisfactory documentation to show that the University complied with exit counseling requirements
for four of them and for six of them, counseling wasn’t done timely (total exceptions 10 out of 11 files where
such counseling was required. Cause: Weak processes and controls over ensuring exit counseling is performed as well as a lack of
recordkeeping to evidence exit counseling requirements were met by the University.
Effect: For students with a break in enrollment, the University did not meet its responsibilities to provide
these individuals with required exit counseling information.
Questioned costs: $-0-.
Perspective information: See table below: Identification of repeat findings: Yes, see FA-2022-003.
Recommendation: The Financial Aid Director should review the Department of Education’s requirements
of Institutions related to exit counseling and implement controls to ensure those requirements are met. We
recommend that the Department of Education’s Direct Loan Exit Counseling Guide be mailed to the
permanent address on record for students who have separated service along with a letter informing them to
read the material and perform exit counseling online as a requirement of their federal loans. The materials
sent to the students should be dated and copies retained in the students’ files as evidence of the University’s
compliance.
Views of responsible officials: See Client’s Corrective Action Plan.