Francis Marion UniversityLocal Government

COMPLIANCE FINDING 2024-001 Special Tests and Provisions – Disbursements to or on behalf of Students Based on a sample of 25 students Condition: We found 23 instances where students were awarded direct loan program funds and the institution was not in compliance with all the loan notification requirements under 34 CRF 668.165. The institution uses affirmative confirmation and must notify students no earlier than 30 days before, and no later than 30 days after, crediting the student’s ledger account at the institution. The institution was not able to provide evidence that the notification was sent to students within the required time. In addition, the institution was not able to provide evidence that the anticipated date of the disbursement was communicated to students in writing as required. Criteria: 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 (34 CRF 668.165(a)(1). 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 (34 CFR 668.165(a)(2)) — (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. The institution must provide the notice described in paragraph (a)(2) of this section in writing (34 CFR 668.165(a)(3)) — (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. Cause: The former director of Financial Assistance mistakenly believed that information on the university website and acceptance of the loans by the recipient would satisfy the notification requirements. This misinterpretation was the cause of the non-compliance. Effect: Noncompliance with certain requirements under 34 CFR 668.165(a). Recommendation: We recommend that the University put in place a plan of action to ensure that written notifications are sent to students within the required time frame for affirmative confirmations and that the notifications includes all required elements of 34 CFR 668.165(a)(2). Views of Responsible Officials and Planned Corrective Actions – See Corrective Action Plan

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