NEWBURY COLLEGE, INC.

Finding number: 2019-001 Federal agency: U.S. Department of Education Programs: Federal Direct Student Loans CFDA #?s: 84.268 Award period: July 1, 2018 through May 12, 2019 Criteria According to 34 CFR Section 668.165(a): (1) Before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. If those funds include Direct Loan program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. (2) Except in the case of a post-withdrawal disbursement made in accordance with ?668.22(a)(5), if an institution credits a student ledger account with Direct Loan, Federal Perkins Loan, or TEACH Grant program funds, the institution must notify the student or parent of ? (i) The anticipated date and amount of the disbursement; (ii) The student's or parent's right to cancel all or a portion of that loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement and have the loan proceeds or TEACH Grant proceeds returned to the Secretary; and (iii) The procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement. (3) The institution must provide the notice described in paragraph (a)(2) of this section in writing ? (i) No earlier than 30 days before, and no later than 30 days after, crediting the student's ledger account at the institution, if the institution obtains affirmative confirmation from the student under paragraph (a)(6)(i) of this section; or (ii) No earlier than 30 days before, and no later than seven days after, crediting the student's ledger account at the institution, if the institution does not obtain affirmative confirmation from the student under paragraph (a)(6)(i) of this section. Condition Federal regulations require the College to notify students, within the required timeframe, of credits to the student?s account of any Direct Loan. During our testing, we noted a single student, out of a sample of 40, was not notified within the required timeframe. Cause The timing of this disbursement and missed notification was the week before Christmas closure. It was a single disbursement performed manually and not an automated batch process. Effect The College is not in compliance with notification requirements. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the 40 students selected for testing, 1 student, or 2.5% of our sample, did not receive timely disbursement notifications. Identification as a Repeat Finding, if applicable Not applicable Recommendation Newbury College is no longer participating in the Federal Student Aid programs and therefore, a recommendation is not necessary. Views of Responsible Officials The College agrees with the finding. No new students are enrolling, so there will be no such issues moving forward.

Finding number: 2019-001 Federal agency: U.S. Department of Education Programs: Federal Direct Student Loans CFDA #?s: 84.268 Award period: July 1, 2018 through May 12, 2019 Corrective Action Plan: Newbury College has closed and therefore, will not take any action in response to the findings. Timeline for Implementation of Corrective Action Plan: N/A Contact Person Joyce Hanlon, Chief Transition Officer

Finding number: 2019-002 Federal agency: U.S. Department of Education Programs: Federal Perkins Loan Program CFDA #?s: 84.038 Award period: July 1, 2018 through May 12, 2019 Criteria According to 34 CFR Section 668.26: (a) An institution's participation in a Title IV, HEA program ends on the date that- (1) The institution closes or stops providing educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution or the institution's students? (c) If an institution closes or stops providing educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution or the institution's students, the institution shall - (1) Return to the Secretary, or otherwise dispose of under instructions from the Secretary, any unexpended funds that the institution has received under the Title IV, HEA programs for attendance at the institution, less the institution's administrative allowance, if applicable; and (2) Return to the appropriate lenders any Federal Stafford Loan program proceeds that the institution has received but not delivered to, or credited to the accounts of, students attending the institution. Condition Federal regulations require the College to liquidate its Perkins loan portfolio when closing. While the College has begun the process of the liquidation of their Perkins loan portfolio, a full liquidation has not been completed. Cause The liquidation has not been completed due to lack of staffing. Effect The College has not liquidated their Perkins loan portfolio. Questioned Costs Not applicable Identification as a Repeat Finding, if applicable Not applicable Recommendation The College should continue with the liquidation process of the Perkins loan portfolio. Views of Responsible Officials The College agrees with the finding.

Finding number: 2019-002 Federal agency: U.S. Department of Education Programs: Federal Perkins Loan Program CFDA #?s: 84.038 Award period: July 1, 2018 through May 12, 2019 Corrective Action Plan: Newbury College is in the process of closing out their Perkins Loan Program. Timeline for Implementation of Corrective Action Plan: June 30, 2020 Contact Person Joyce Hanlon, Chief Transition Officer

Finding number: 2019-003 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster CFDA #?s: 84.007, 84.033, 84.268, 84.038, 84.063 Award period: July 1, 2018 through May 12, 2019 Criteria According to 34 CFR 685.309(b)(2): Unless [the institution] it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that ? (i) A loan under title IV of the Act was made to, or on behalf of, a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or (ii) A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address. The Dear Colleague Letter GEN-12-6 issued by the U.S. Department of Education (?ED?) on March 30, 2012 states that in addition to student loan borrowers, Enrollment Reporting files will include two additional groups of students: Pell Grant and Perkins Loan recipients. According to 2 CFR Part 200, Appendix XI Compliance Supplement updated September 2019: Under the Pell Grant and loan programs, institutions must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway mailboxes sent by ED via the National Student Loan Data System (?NSLDS?). The institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in student status, report the date the enrollment status was effective, enter the new anticipated completion date, and submit the changes electronically through the batch method or the NSLDS website. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Condition The Federal Government requires the College to report student enrollment changes to the National Student Loan Data System (?NSLDS?) within 60 days. During our testing, we noted 3 students, out of a sample of 37, were not reported to NSLDS within the required timeframe. Cause The Registrar?s Office did not communicate the necessary information to ensure compliance with enrollment reporting requirements. The College has not implemented effective procedures to ensure correct and timely enrollment reporting of students to NSLDS. Effect The College did not report the students? status changes to NSLDS within the required timeframe, which may impact the students? loan grace periods. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the 37 students selected for testing, 3 students, or 8.1% of our sample, had status changes that were not reported to NSLDS within the required timeframe by 2-31 days. Identification as a Repeat Finding, if applicable Not applicable Recommendation Newbury College is no longer participating in the Federal Student Aid programs and therefore, a recommendation is not necessary. View of Responsible Officials The College agrees with the finding. The selected students were corrected. No new students are enrolling, so there will be no such issues moving forward.

Finding number: 2019-003 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster CFDA #?s: 84.007, 84.033, 84.268, 84.038, 84.063 Award period: July 1, 2018 through May 12, 2019 Corrective Action Plan: Newbury College has closed and therefore, will not take any action in response to the findings. Timeline for Implementation of Corrective Action Plan: N/A Contact Person Joyce Hanlon, Chief Transition Officer

Finding number: 2019-004 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster CFDA #?s: 84.007, 84.033, 84.268, 84.038, 84.063 Award period: July 1, 2018 through May 12, 2019 Criteria According to 16 CFR 314.3: a. You shall develop, implement, and maintain a comprehensive information security program that is written in one or more readily accessible parts and contains administrative, technical, and physical safeguards that are appropriate to your size and complexity, the nature and scope of your activities, and the sensitivity of any customer information at issue. Such safeguards shall include the elements set forth in ? 314.4 and shall be reasonably designed to achieve the objectives of this part. According to 16 CFR 314.4: In order to develop, implement, and maintain your information security program, you shall: (a) Designate an employee or employees to coordinate your information security program. (b) Identify reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of customer information that could result in the unauthorized disclosure, misuse, alteration, destruction or other compromise of such information, and assess the sufficiency of any safeguards in place to control these risks. At a minimum, such a risk assessment should include consideration of risks in each relevant area of your operations, including: (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other systems failures. (c) Design and implement information safeguards to control the risks you identify through risk assessment, and regularly test or otherwise monitor the effectiveness of the safeguards' key controls, systems, and procedures. (d) Oversee service providers, by: (1) Taking reasonable steps to select and retain service providers that are capable of maintaining appropriate safeguards for the customer information at issue; and (2) Requiring your service providers by contract to implement and maintain such safeguards (e) Evaluate and adjust your information security program in light of the results of the testing and monitoring required by paragraph (c) of this section; any material changes to your operations or business arrangements; or any other circumstances that you know or have reason to know may have a material impact on your information security program. Condition Management was not able to provide documentation in regards to their information technology security program. Cause Management did not maintain relevant documentation. Effect The College?s administration and IT management may have put the College?s operations and IT systems and data at unintended and unnecessary risk. There is an increased risk that the College may not be adequately protecting its IT systems and data, which could result in unauthorized or inappropriate access and the loss of confidentiality and integrity of systems and data. Questioned Costs Not applicable Identification as a Repeat Finding, if applicable Not applicable Recommendation We recommend that the College take the necessary steps to ensure that the College of Record, to whom all Newbury student information was transferred to, maintains the information in a secure manner. View of Responsible Officials The College agrees with the finding.

Finding number: 2019-004 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster CFDA #?s: 84.007, 84.033, 84.268, 84.038, 84.063 Award period: July 1, 2018 through May 12, 2019 Corrective Action Plan: Prior to Newbury College selecting a third-party College of Record, management of the College ensured the institution that was chosen was reputable and would ensure the security of Newbury College's student information. Timeline for Implementation of Corrective Action Plan: N/A Contact Person Joyce Hanlon, Chief Transition Officer

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