Finding Text
2023-006 Eligibility – First Time Borrower
Federal Agency: Department of Education
Federal Program Title: Student Financial Assistance Cluster
ALN Numbers: Various
Award Period: July 1, 2022 through June 30, 2023
Type of Finding:
• Significant Deficiency in Internal Control Over Compliance
• Other Matters
Criteria or Specific Requirement: An institution may not make a disbursement of a Direct Loan to a first-year undergraduate who is a first-time borrower until 30 days after the first day of classes of the payment period (34 CFR 668.164(i)(2)(i) and 34 CFR 685.303(b)(5))
Condition: During our testing, we noted 2 out of the 40 students were first time borrowers who received a disbursement of Direct Loans within 30 days after the first day of classes. The University was required to wait until after 30 days of the first day of classes. For both cases, the student remained enrolled, so there was no need to issue a refund.
Questioned Costs: None
Context: During our testing, it was noted the University does not have a process in place to comply with the federal regulations.
Cause: The University did not have a process in place to ensure compliance with federal regulations.
Effect: The University is not in compliance with Department of Education requirements in regards to first-time borrowers receiving Direct Loans.
Repeat Finding: No
Recommendation: We recommend that the University review its procedures related to first-time borrowers to ensure they are in compliance with the Department of Education's regulations.
Views of Responsible Officials: There is no disagreement with the audit finding.