ARLINGTON BAPTIST UNIVERSITY

Incorrect Enrollment Reporting to National Student Loan Data System (NSLDS) Material Weakness DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Direct Student Loans and 84.063 Federal Pell Grants Federal Award Identification #: 2024-2025 Financial Aid Year Condition: The University did not report enrollment and program information to the National Student Loan Data System (NSLDS) in a timely and accurate manner. Criteria: 34 CFR 685.309 Questioned Costs: $0 Context: Out of 60 students tested, 6 students were not reported correctly for campus enrollment, and 7 students were not reported correctly for program enrollment. All campus enrollments were corrected during the audit process. Cause: The University contracted with a third-party servicer to assist with enrollment reporting. For program enrollment, certain CIP codes were mapped to one code in NSLDS, which resulted in the students not being reported accurately. For the campus enrollment, three students were not reported as graduated, and three students were withdrawals and did not have the correct effective date reported. Of the six students who were not reported correctly for campus enrollment, three of them did not have any loans, so there was no impact on these students. Effect: Inaccurate reporting can impact a student’s loan grace period in school deferment eligibility, beginning loan repayments, appropriate interest charges, etc. Identification as repeat finding, if applicable: Yes, 2024-001 Recommendation: We recommend the University work with the third-party servicer to properly map CIP codes and determine how campus enrollment data can be pulled out of the system to appropriately update NSLDS. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Return of Title IV (R2T4) Calculations Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Direct Student Loans and 84.063 Federal Pell Grants Federal Award Identification #: 2024-2025 Financial Aid Year Condition: There was one incorrect calculation of a post withdrawal disbursement for a student that withdrew during the term. Two other students had the calculation performed correctly but an inaccurate amount returned. Criteria: 34 CFR 668.22 Questioned Costs: $32 Context: Out of 10 students, one student had an incorrect post withdrawal disbursement made, resulting in $32 more Pell disbursed to the student than was calculated. Two students had the correct calculations and the initial return on the student account did not match the calculation. Of these two, one was caught internally by the review process and corrected within the year, and one resulted in $26 of unsubsidized loans returned to the government that should not have been returned. Because the dollar amounts are small, the error rate is high, and this was a prior year finding this is classified as a significant deficiency. These students were corrected during the audit process. Cause: For the student with the post withdrawal disbursement, the calculation was done correctly, but the amount disbursed was $32 more than the calculation indicated, resulting in a required return to the government. One student had the correct calculation done but the incorrect amount returned which was noted at the end of the fall semester and corrected, returning an additional $96 of Pell. One student inadvertently returned the amount that was to be kept and resulted in $26 more being returned to the government than should have been. Effect: Incorrect amounts of federal funding were returned. Identification as repeat finding, if applicable: Yes, 2024-002 Recommendation: We recommend the University add a step to verify attendance began at least half time for loan eligibility. We further recommend the University double check the amounts returned match the calculations. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Incorrect Enrollment Reporting to National Student Loan Data System (NSLDS) Material Weakness DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Award Identification #: 2023-2024 Award Year Condition: The University did not report enrollment information to the National Student Loan Data System (NSLDS) in a timely and accurate manner. Criteria: 34 CFR 685.309 Questioned Costs: $0 Context: Out of 54 students tested, 45 students had incorrect enrollment statuses reported, of which seven were withdrawals. Additionally, out of 14 students tested, seven students had incorrect program reporting to NSLDS. Cause: The University’s process has been manual to update all NSLDS reporting by student. Effect: Inaccurate reporting can impact a student’s loan grace period, in school deferment eligibility, beginning loan repayments, appropriate interest charges, etc. Identification as repeat finding, if applicable: Yes, 2023-001 and 2022-002 Recommendation: We recommend the University put a system in place to ensure that all students are being reported to NSLDS, and that the University is completing spot checks of enrollment statuses to NSLDS. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Return of Title IV (R2T4) Calculations Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268, 84.063 Federal Award Identification #: 2023-2024 Award Year Condition: There were four incorrect calculations of returned funds for students that withdrew during the term due to incorrect calendar setups and late notifications of students not attending, resulting in late returns. Criteria: 34 CFR 668.22 Questioned Costs: $245 Context: Out of 8 students, two students who withdrew during the audit period tested had funds returned late due to late notifications of non-attendance. Three students had incorrect calculations due to incorrect calendar set ups and needing to recalculate pell for classes the students began attendance in prior to performing the return calculation. This resulted in Pell owed back to the government of $78 and FDL owed back of $167 at fiscal year-end. Additionally, one student was not offered a post withdrawal disbursement of $292 of loans. Because the dollar amounts are small and the error rate is higher, this is classified as a significant deficiency. All students were corrected during the audit process. Cause: The calendar setups for fall 2023 were not set up properly. Additionally, notifications of nonattendance were not sent to financial aid timely to perform return calculations. Effect: Incorrect amount of unearned Title IV funds returned and lack of offering a post withdrawal disbursement. Identification as repeat finding, if applicable: Yes, 2023-002, 2022-001, 2021-003, 2020-006, 2019-005, and 2018-005. Recommendation: We recommend the University review the calendar set ups and ensure the proper number of days are used in the calculations. Additionally, we recommend the University implement a way to notify financial aid timely when students are not attending so a return calculation can be done timely. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Lack of Documentation of Exit Counseling Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Award Identification #: 2023-2024 Award Year Condition: The University did not retain evidence or provide exit counseling to all students who left or did not send exit counseling instructions timely. Criteria: 34 CFR 685.304(b) Questioned Costs: $0 Context: Out of 37 students tested for exit counseling, six students did not have any documentation of exit counseling being sent. The University is in the process of sending these students exit counseling notifications. Cause: These students were marked in the system as active, so they were not picked up with the report to send exit counseling. Effect: Documentation of exit counseling was not available. Exit counseling packets assist in reducing the default rate. The default rate for the University was 5.5% in 2019, 20.5% in 2018, and 21.8% in 2017. Official rates for 2020 and 2021 are listed at 0% due to COVID waivers. Identification as repeat finding, if applicable: Yes, 2023-003. Recommendation: We recommend the University implement a process where all students leaving the University are notified of exit counseling requirements and documentation is retained. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Disbursements to Ineligible Students DEPARTMENT OF EDUCATION ALN #: 84.268, 84.063 Federal Award Identification #: 2023-2024 Award Year Condition: Two students who did not begin attendance in a semester were paid federal aid. Criteria: 34 CFR 668.32(a), 34 CFR 600.2 Questioned Costs: $9,500 Context: Out of 51 tested for eligibility, two students did not begin attendance in an eligible program. One student’s aid was returned prior to the end of the semester but beyond the allowable 30 days. The other student’s aid was returned shortly after fiscal year-end. Cause: The system check to verify attendance did not catch these students as not having begun the semester. Effect: Federal aid was paid to an ineligible student. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend the University compare a listing of students who have begun attendance to federal aid paid and return any federal aid paid to ineligible students. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Enrollment Reporting to NSLDS Material Weakness DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Award Identification #: 2022-2023 Financial Aid Year Condition: The University did not report enrollment information to the National Student Loan Data System (NSLDS) in a timely and accurate manner. Criteria: 34 CFR 685.309 Questioned Costs: $-0- Context: Out of 57 students tested, 7 students had incorrect enrollment status reported, of which one student was an official withdrawal. Cause: The University’s process has been manual to update all NSLDS reporting by student. Effect: Inaccurate reporting can impact a student’s loan grace period in school deferment eligibility, beginning loan repayments, appropriate interest charges, etc. Identification as repeat finding, if applicable: Yes, 2022-002. Recommendation: We recommend the University put a system in place to ensure that all students are being reported to NSLDS, and that the University is completing spot checks of enrollment statuses to NSLDS. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Return of Title IV (R2T4) Calculations Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268, 84.063 Federal Award Identification #: 2022-2023 Financial Aid Year Condition: There were 7 incorrect calculations of returned funds for students that withdrew during the term due to incorrect calendar setups. Criteria: 34 CFR 668.22 Questioned Costs: $-0- Context: Out of 10 students, 7 students who withdrew during the audit period tested had incorrect funds returned due to incorrect calendar setups resulting in $254 of Pell and $185 of Federal Direct Loans returned more than required. Because of the error rate but immaterial dollar amounts, this is classified as a significant deficiency. Cause: The University uses a third party administrator to assist in processing R2T4’s. The third party administrator had incorrect calendar setups which resulted in all students completing less than 60% of the semester having an incorrect return. Effect: Incorrect amount of unearned Title IV funds returned. Identification as repeat finding, if applicable: Yes, 2022-001, 2021-003, 2020-006, 2019-005, and 2018-005. Recommendation: We recommend the University review the calendar setups and ensure the proper number of days are used in the calculations. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Lack of Documentation of Exit Counseling DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Award Identification #: 2022-2023 Financial Aid Year Condition: The University did not retain evidence or providing exit counseling to all students who left or did not send exit counseling instructions timely. Criteria: 34 CFR 685.304(b) Questioned Costs: $-0- Context: Out of 51 students tested for exit counseling, 2 students did not have any documentation of exit counseling being sent. These students were sent exit counseling notifications during the audit process. Cause: With transitions in financial aid counselors, documentation of notifying students was not available. Effect: Documentation of exit counseling was not available. Exit counseling packets assist in reducing the default rate. The official cohort default rate for the University was 5.5% in 2019, 20.5% in 2018, and 21.8% in 2017. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend the University implement a process where all students leaving the University are notified of exit counseling requirements and documentation is retained. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Right to Cancel Notifications DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Award Identification #: 2022-2023 Financial Aid Year Condition: Students were not consistently notified of their ability to cancel loan disbursements. Criteria: 34 CFR 668.165(a) Questioned Costs: $-0- Context: The templates used to notify students of upcoming loan disbursements did not include the instructions on how to cancel the loan. Cause: There was transition in the financial aid department and the templates used did not include the required language. Effect: There was noncompliance with the right to cancel notifications. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend the University update the template used for right to cancel notifications to include all required language. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.