Alaska Administrative Code › Title 20 - Miscellaneous Boards and Commissions › Chapter 15 - Student Financial Aid › Article 11 - General Provisions › 20 AAC 15.924 - Loan audit and institutional sanctions

Current through May 31, 2024
(a) An institution
				that participates in an Alaska education loan program under
				20 AAC 15.922 is subject to periodic audits for purposes of
				determining verification of education loan eligibility, management of education
				loan documents, compliance with the program participation agreement, and
				compliance with Alaska statutes and regulations.
(b) The audit report must state the error rate
				based upon the number of education loan disbursements that were not handled in
				compliance with this chapter, AS 14.43, 20 AAC 17 when applicable, or the program
				participation agreement, divided by the total number of loan disbursements in the
				sample.
(c) An institution that
				receives an audit error rate greater than 10 percent is on probation for a period
				of up to 24 months, unless the commission determines to reduce or extend that
				period.
(d) During a period of
				probation under (c) or (f) of this section, commission staff shall conduct at
				least one additional audit, and more if it determines them necessary.
(e) If the final additional audit under (d) of
				this section shows that the institution has failed to reduce its error rate below
				the level described in (c) of this section, the institution is not eligible to
				participate in Alaska education loan programs for a 12-month period. The
				institution may make written application to the commission for waiver or
				reduction of the period of ineligibility. If the institution submitting the
				application has either reduced its error rate from the rate determined in the
				initial probationary audit or is within five percentage points of the eligibility
				threshold described in (c) of this section, and documents the institution's
				compliance with a plan under this chapter to remedy the problems identified in
				the report, the commission shall waive the period of ineligibility and the
				institution will continue to be in a probationary status for a maximum of 24
				months.
(f) Following a period of
				ineligibility set or redetermined after a waiver under (e) of this section, an
				institution approved to participate in Alaska education loan programs is on
				probation for up to a 24-month period.
(g) An institution determined to be ineligible
				under (e) of this section or under
				20 AAC 15.927(b) may appeal the
				determination or the denial of the institution's application for waiver or
				ineligibility in writing to the commission within 30 days after the date of the
				letter advising of the determination. The institution must clearly state all
				objections to that determination and provide any material it wishes the
				commission to review. Upon receipt of the appeal, the commission will schedule a
				time and place of the meeting at which the commission will consider the appeal.
				The commission will review the material submitted by the institution and any
				response by commission staff. The commission will, in its discretion, allow the
				institution and commission staff to make brief presentations at its meeting. The
				institution has the burden of proving, by a preponderance of the evidence, that
				the institution should be allowed to participate in Alaska education loan
				programs under the statutes and regulations governing the programs. The
				commission's decision constitutes final agency action.
(h) An institution found during the compliance
				audit to have disbursed loan proceeds for which a student was not eligible shall
				return the loan proceeds to the commission within 60 days of the finding if
(1) the institution has previously received a
				written warning from commission staff of disbursement to an ineligible student
				and a subsequent violation of the same statute or regulation is
				identified;
(2) the ineligible
				student to whom the institution disbursed loan proceeds did not become eligible
				during the academic or vocational program period for which the loan proceeds were
				awarded; and
(3) that amount remains
				outstanding on the student's loan account.