Finding Text
Federal Program: Student Financial Assistance Cluster (ALN: 84.268)
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions –Disbursements To or On Behalf of Students – Loan Disbursement Notification Testing When Direct Loans or TEACH funds are being credited to a student’s account, the institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement (a minimum of 14 or 30 days depending on confirmation process). The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check (34 CFR section 668.165). Institutions that implement an affirmative confirmation process (as described in 34 CFR section 668.165 (a)(6)(i)) must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student’s account at the institution with Direct Loan, FPL funds, or TEACH Grants. Institutions that do not implement an affirmative confirmation process must notify a student no earlier than 30 days before, but no later than 7 days after, crediting the student’s account and must give the student 30 days (instead of 14) to cancel all or part of the loan.
Condition: The University failed to provide loan disbursement notifications for all applicable students during the year.
Cause: Insufficient administrative oversight with respect to loan disbursement notifications.
Effect: The University is not in compliance with federal regulations over disbursing federal funds.
Questioned Costs: None.
Context: For 2 out of 40 disbursements, the University failed to provide loan disbursement notifications.
Identification of Repeat Finding: No similar findings noted in the prior year.
Recommendation: We recommend that the University implement policies to ensure the University sends loan disbursement notifications within the required timeframe.
Views of Responsible Officials
and Planned Corrective Actions:
The University will change the process from manually pulling loan disbursement lists from the Ellucian Colleague system using the TFAR report to setting up Communications Management within the Colleague system so that the notifications are automatically emailed, and no manual intervention is needed.