South Baylo University

Finding No. 2020-001 The Institution disbursed Title IV Funds to students enrolled in less than 1/2 time enrollment status. Federal Direct Student Loan CFDA No. 84.268; Period- Year Ending June 30, 2020 Statement of Condition The Institutiond disbursed Title IV funds to students enrolled in less than 1/2 time enrollment status. Criteria Population and Sample Size Population Sample # of students 139 35 # of students less than half-time 2 2 with loan disbursements When a student fails to begin attendance or attends less than half-time after receiving a Direct Loan disbursement: The Institution may be able to make the first disbursement of a Direct Loan before the student begins attending class, in order to remain eligible for a Direct Loan, the student must actually begin attendance, on at least a half-time basis, in the period of enrollment for which the loan was intended. If the student begins attendance, but on a less than half-time basis, the student is not eligible to receive subsequent Direct Loan disbursements as long as he or she remains less than half-time. Neither the school nor the student is required to return any loan proceeds disbursed to a student or parent for a payment period as long as: the student commenced attendance in at least one course during the payment period; and at the time of the loan disbursement the student was enrolled for classes on at least a half-time basis. However, the school must not make any subsequent disbursements of the loan unless the student resumes enrollment on at least a half-time basis. Effect of Condition Students in the MSAOM program must be enrolled in at least 8 units to be considered half-time. Enrolled Aid Disbursed Student #15 6 units $ 4,899 Student #20 4 units $ 4,590 Cause of Condition Recommendation Institution's Response The Institution has already returned the Title IV amounting to $9,489 on April 22, 2021. Students #15 and #20 from the sample were enrolled less than half-time during spring quarter 2020. There were several students who had enrolled in greater than half-time who dropped courses due to the coronavirus pandemic. The school was mandated by the local and federal governments to partially or fully suspend operations during the spring 2020 quarter. Those students who reduced their course load but who had continued to attend were allowed to keep the aid disbursed per regulations. However, there were two students who did not enroll in at least half-time who were disbursed federal financial assistance. There was much confusion initially during the pandemic especially with cancellation and modification to school activities after the pandemic which resulted in a misunderstanding of the ability for a school to award aid to students who were enrolled in less than half-time. The Institution is recommended to return any Title IV aid that was disbursed to students who were enrolled in less than half-time basis. The Institution is also recommended to review the FSA Handbook on an annual basis and review any publications or other "Dear Colleague" letters issued by the Department of Education which may provide guidance on special circumstances that may arise during the year.

Statement of Condition The Institution disbursed Title IV Funds to students enrolled in less than 1/2 time enrollment status. A: Comments on the Findings and Recommendations: The institution does concur with audit finding. B: Actions Taken or Planned: The Institution returned Title IV funds for which students were ineligible due to enrollment status on April 22, 2021 C: Status of Corrective Actions on Prior Findings: No Prior Findings

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