Finding Text
Finding 2022-001 Entrance Counseling Federal Direct Loan Program ? CFDA No. 84.268 Criteria and Condition: Federal regulations stipulate that an institution must provide students with entrance counseling to explain the loan obligation, including the borrower?s rights and responsibilities, prior to a loan disbursement to a first-time Federal Direct Loan borrower. The required elements of entrance counseling are the reinforcement of repayment, the consequences of a default, that payment is required regardless of educational outcome and employability, and to explain the use of the promissory note. The counseling must be conducted in person, by audiovisual presentation, or by interactive electronic means. Context: During our testing, we noted 2 instances in a sample of 61 students in which evidence of entrance counseling could not be provided by the College. Cause: Administrative oversight. The College did not properly monitor the disbursement of funds with the students who had completed the entrance interview. These students may not have been informed of their rights and responsibilities under the Federal Direct Loan Program. Recommendation: The staff at Columbia College should ensure that all students participating in the Federal Direct Loan Program receive the initial loan counseling prior to the disbursement of funds. This should be evidenced with a copy of the entrance interview in the students? files. Views of Responsible Officials and Planned Corrective Actions: The Financial Aid Officers will check Common Origination Disbursement (COD) to ensure that the student has a valid entrance counseling. The counselor will provide a comment that the entrance counseling has been reviewed in the comment section of our Financial Aid system.