The U.S. Department of Education, Office of Inspector General has published its new Guide for Compliance Attestation Engagements of Lenders Holding Federal Family Education Loan Program Loans (Guide). This Guide supersedes the January 2011edition of the Audit Guide, Lender Compliance Attestation Engagement Guide for Lenders Holding Federal Family Education Loan Program Loans. The Guide is effective for fiscal years ending on or after June 30, 2021. Early implementation is permitted.
A lender (other than a school lender) holding more than $5 million in FFEL loans during its fiscal year must submit an annual compliance audit for that year. The required audit must examine the lender’s compliance with the Higher Education Act of 1965, as amended (HEA) and applicable regulations as well as examine the lender’s financial management of its FFEL Program activities (34 C.F.R. § 682.305(c)). The compliance audit requirement that applies to school lenders at section 435 of the HEA does not include an exception based on the amount of the lender’s loan volume each fiscal year as defined in 34 C.F.R. § 682.305(c) for other eligible FFEL Program lenders. Therefore, schools that hold any FFEL Program loans during its fiscal year must submit a compliance audit for that year.
To satisfy the lender compliance audit requirement, this Guide requires either an examination-level attestation engagement or an agreed-upon procedures attestation engagement, or both, depending on whether the compliance functions addressed in this Guide are carried out in whole or in part by a lender servicer and whether the lender servicer provides a compliance audit or attestation engagement report that meets requirements.
The guidance and requirements in this Guide apply to the compliance attestation engagements of all lenders, except those that are State, local, or nonprofit organizations subject to Subpart F—Audit Requirements of Title 2 of the C.F.R., Chapter II, Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
If you are a lender subject to audit in accordance with this Guide, please ensure that your auditor is using this Guide for audits of fiscal years ending on or after June 30, 2021. The Guide and the related transmittal letter are available on the OIG Non-Federal Audit website at https://www2.ed.gov/about/offices/list/oig/nonfed/lender.html.
Contact Information
Questions pertaining to this Guide may be directed to the Office of Inspector General’s Non‑Federal Audit Team via email to OIGNon-FederalAudit@ed.gov.