Audit 371000

Need Analysis Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Direct Student Loans Federal Award Identification #: 2024-2025 Financial Aid Year Condition: Students were not appropriately awarded subsidized loans based on need. Criteria: 34 CFR 685.203, 34CFR 685.301 Questioned Costs: $0 Context: Out of 40 students tested, 2 students were not awarded aid appropriately based on need analysis. Both students had become eligible for more subsidized loans due to an increase in grade level for the 2024-2025 award year. When the Financial Aid Office offered the students additional loans, both students declined. Instead of allocating the students’ increased eligibility to subsidized loans, the University disbursed them as unsubsidized loans. Both students received unsubsidized loans when they were eligible for $1,500 more in subsidized loans. Cause: This was an oversight by the University. Effect: Incorrect allocation of subsidized versus unsubsidized loans, which affects the amount and timing of interest the student must repay. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that the University set up reports in the student information system to periodically check for over or under awarding of need-based federal aid. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.