Finding Text
Federal Program Information: Federal Direct Student Loans (ALN #84.268) Criteria or Specific Requirement: Special Tests and Provisions ? Disbursements to or on Behalf of Students ? Federal Student Aid (?FSA?) Credit Balances - Where disbursements created a credit balance in the student account and the student or parent did not provide an authorization for the institution to retain funds, the institution must provide the credit balance amount to the student within 14 days of the date the balance was created (34 CFR 668.164(h)). Condition: Instances where the University did not issue a refund within the required timeframe. Cause: Lack of administrative oversight with respect to disbursements to or on behalf of students, including inadequate review and tracking of refunds due. Effect or Potential Effect: The University was not in compliance with disbursements to or on behalf of students. Questioned Costs: None. Context: For 2 of 25 students selected for testing, the University did not issue the refund within the required 14 days. Identification as a Repeat Finding: There was no similar finding in the prior year. Recommendation: We recommend the University complete a timely review of credit balances in order to issue all refunds with respect to FSA credit balances within the required timeframe. We also recommend timely review of refunds due. Views of Responsible Officials: The Policy and Procedures manual has been updated to reflect the following updated process: The Business Office processes student refunds within 14 days after a Title IV credit balance appears on a student?s account. At least once per week, the Refunds Coordinator generates a refund report (ARTM) which lists students with credit balances. The University?s policy is that all refunds are processed via ACH (direct deposit), and all students are required to provide their bank account information. Communication is sent to students throughout the semester reminding them to sign up for direct deposit. To ensure that all students receive their refunds by the required 14 days, a paper check is issued to students missing banking information. Checks are sent to the mailing address on file. Communication will continue to be sent to all students encouraging them to sign up for ACH refunds. However, refunds are processed timely even if the banking information is not available.