Finding Text
Finding 2022-001: Information on the Federal Program: CFDA 84.268 ? Federal Direct Student Loan. United States of Department of Education Compliance Requirements: Special Tests and Provisions Type of Finding: Significant deficiency. Criteria: Program requirements state that 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. The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check (34 CFR 668.165). Institutions that implement an affirmative confirmation process (as described in 34 CFR 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 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 seven 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: For each student in the sample selection of Title IV students who received Direct Loans we reviewed the school?s documentation to ensure a disbursement notification was sent within the required time frame. Questioned Costs: $0 Context: Twenty-six students in the sample selection were identified as not receiving a loan disbursement notification due to a personnel change in the Financial Aid Department. Effect or Potential Effect: Students were not provided information concerning the date and amount of the disbursement, the right to cancel all or a portion of the loan, and the process by which the student or parent must notify the institution that he or she wishes to cancel the loan. Cause: Internal control process failure. Repeat Finding: No Recommendation: The Financial Aid Office should implement an internal control process/procedure to ensure that all students? receiving direct loan awards are receiving a disbursement notification within the required timeframe. Views of Responsible Official: We agree with this finding and recommendation. TVCC Financial Aid Office experienced a change in personnel that caused the email notification not to be sent out to these students. The Financial Aid Office has updated their process for emailing notifications to students. Please see the attached action plan related to this finding in this report.