Finding 2025-002 Student Financial Assistance Cluster of Programs Reporting 84.268 Significant Deficiency Federal Direct Loan Program U.S. Department of Education Federal Award Identification (Required by 2 CFR 200.516(a)(1)): Federal program: Student Financial Assistance Cluster – Direct Loan Program Assistance listing (CFDA): 84.268 Federal agency: U.S. Department of Education Pass-through Entity: Not applicable - direct award Award number: P268K256742 Award year: June 30, 2025 Criteria: 34 CFR 685.301(a)(4) A school may not originate a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan, or a combination of loans, for an amount that - (i) The school has reason to know would result in the borrower exceeding the annual or maximum loan amounts in § 685.203; or (ii) Exceeds the student's estimated cost of attendance less - (A) The student's estimated financial assistance for that period; and (B) In the case of a Direct Subsidized Loan, the borrower's expected family contribution for that period. Condition: A sample of thirty-seven students was selected for student file and account testing. Two students were packaged using a full-time cost of attendance despite enrollment in programs structured at three-quartertime courseload. Context: The deficiency was discovered during the audit testing of student files and accounts. The affected students were enrolled as part of a teach-out arrangement from another institution. Cause: These students were part of a teach-out arrangement from another institution. A breakdown in communication between the Admissions and Financial Aid departments regarding the enrollment status of this program resulted in the use of an incorrect cost of attendance for packaging purposes. The issue appears isolated to this specific teach-out program. Effect: Students received unsubsidized and Grad PLUS loans in excess of their allowable cost of attendance. Known questioned costs: Known questioned costs total $34,739 for the two students. Likely questioned costs: Likely questioned costs are $0, as the condition was isolated to 2 of 37 students tested (5.4 percent) and limited to a closed, finite teach‑out population. Because the teach-out population was finite, closed, and fully identified, and no similar conditions were noted outside this population, it was determined that projection of known questioned costs to the remaining population was not appropriate. Repeat finding status: This is a new finding for the year ended June 30, 2025. Recommendation: We recommend the University document and implement a brief communication protocol for future teach-out or non-standard admissions populations to ensure enrollment status and program structure are clearly communicated to Financial Aid prior to Title IV packaging. Views of responsible officials: Management has implemented corrective actions to address reporting errors related to cost of attendance calculations for a limited number of students admitted through a teach‑out arrangement. Management is strengthening coordination between Admissions and Financial Aid by implementing a standardized handoff process for non‑standard student populations that documents program structure, enrollment status, and term length prior to Title IV packaging. In addition, management has established a secondary review requirement for initial aid awards for new programs or cohorts and will conduct cross‑functional checkpoints during the setup of non‑standard programs to ensure accurate and compliant aid packaging. These actions are intended to prevent recurrence and to maintain strong controls over cost of attendance determinations and Title IV compliance