Finding Text
Federal Assistance Listing Number: 84.038 Federal Perkins Loan Program
Criteria: Per 34 CFR 674.19(e)(4)(iii), after the loan obligation is satisfied, the institution shall return the original or a true and exact copy of the note marked “paid in full” to the borrower, or otherwise notify the borrower in writing that the loan is paid in full, and retain a copy for the prescribed period.
Condition: For students whose Perkins loans were paid off, the College did not return the original or a true and exact copy of the note to the borrower, or otherwise notify the borrower in writing that the loan was paid in full.
Cause: The College has undergone transitions in personnel in several departments, impacting the transfer of knowledge for Perkins program requirements since its termination in 2017.
Effect: The College is not in compliance with the federal regulations regarding the notification as well as retention of Perkins loan records.
Prevalence: The College has not made the required communication to student borrowers whose Perkins loans were paid in full.
Recommendation: The College should add the procedure to, as each loan obligation is satisfied, return the original or a true and exact copy of the note marked “paid in full” to the student borrower, or otherwise notify the student in writing that the loan is paid in full, and retain a copy for the prescribed period.
Management’s Response and Planned Corrective Action: The College will take corrective action with their third party service provider, University Accounting Services (UAS) to send the required communications to students with loans that have been paid in full. The College also plans to contract with UAS to send these communications to borrowers as the loans are paid off going forward.