Federal Student Aid’s Plans for School Closures by a For-Profit Entity

We conducted an inspection to determine the adequacy of FSA’s risk assessment and contingency planning for the closure of schools or locations by a for-profit entity and its procedures in the event of a closure. We determined that FSA had performed risk assessments and developed strategies to mitigate identified risks associated with for-profit schools; however, it did not fully incorporate into its work processes and implement some of its risk mitigation strategy action items. We also found that although FSA had contingency plans in place in the event of a school closure, the information posted on its Web site was not as comprehensive as it could be and was located in multiple places, making relevant information difficult to find. Additionally, we noted that FSA had developed procedures that described the steps it would take when it was notified or otherwise became aware that a school or school location had closed or would close; however, the procedures did not provide clear guidance on how student outreach should be performed or provide a process that should be followed in the event of a precipitous school closure.