Finding 2025-001 Inaccurate NSLDS Reporting Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster ALN and Program Expenditures: 84.063 ($32,562,241) 84.268 ($174,471,585) Federal Award Numbers: P063P240105 P268K250105 P063P230105 Federal Award Year: July 1, 2024 to June 30, 2025 Questioned Costs: None Compliance Requirement: NSLDS Reporting Condition Found: The University did not accurately report student enrollment status changes to the National Student Loan Data System (NSLDS). The U.S. Department of Education (USDE) uses enrollment data reported by the University to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in-school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. During our testing of 40 students (31 students with Federal Direct Loan Program disbursements of $1,002,311 and 9 students with Federal Direct Loan Program disbursements of $114,486 and Federal Pell Grant disbursements of $64,090) that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the fiscal year, we noted the following: • The status change for one graduated student (with Federal Direct Loan Program disbursements of $15,434) was reported incorrectly to the NSLDS as a Withdrawn (W) status rather than a Graduated (G) status. Specifically, in the 2024-2025 academic year, the student was previously reported to the NSLDS as withdrawn due to no enrollment but then subsequently graduated, and as a result the University did not update the enrollment status change to graduated. Upon further review, management identified an additional 43 students (21 students with Federal Direct Loan Program disbursements of $192,242 and 22 students with Federal Direct Loan Program disbursements of $65,398 and Federal Pell Grant disbursements of $64,907) during the fiscal year who were reported incorrectly to the NSLDS as a W status rather than a G status. We further noted management review controls implemented by the University were not designed at a level of precision to ensure University enrollment data submitted to NSLDS was accurate. The University disbursed Federal Direct loans and Pell grants to 9,674 and 5,822 students, respectively, during the year ended June 30, 2025. Criteria or Requirement: According to 34 CFR Sections 690.83(b)(2) and 685.309, under the Pell grant and Federal Direct Loan programs, institutions must complete and return the Enrollment Reporting Roster File via NSLDS within 15 days of receipt. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster File. Unless an institution expects to submit its next updated enrollment report to the USDE within the next 60 days, an institution must notify NSLDS within 30 days after the date that the institution discovers that (1) a Direct loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or (2) a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address. The November 2022 NSLDS Enrollment Reporting Guide states “for a student who has graduated, schools who initially report a withdrawn status must subsequently report the student as having graduated by certifying a ‘G’ status at the Campus-Level and/or Program-Level as appropriate.” In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include establishing procedures to ensure student enrollment status changes are accurately reported to the NSLDS. Cause: Cause: In discussing these conditions with the University, they stated that the specific issue was due to a gap in staffing and failure to understand that a secondary manual update to the record was necessary. The individual who took the previous control operator’s place did not have an effective understanding of the reporting process and did not report the student’s status appropriately. Possible Asserted Effect: Inaccurate submission of student enrollment status affects the determinations that lenders and servicers of student loans make related to in-school deferments, grace periods, and repayment schedules, as well as the Federal government’s payment of interest subsidies. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding code 2025-xxx) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review and revise its procedures to ensure accurate reporting of enrollment status information to the NSLDS. Views of University Officials: DePaul is committed to fulfilling the federal requirement to report withdraw and graduation status to the NSLDS. The University Registrar’s Office is responsible for that task and accomplishes it by reporting enrollment through the National Student Clearinghouse (NSC), a third-party servicer. Generally, there are not typically issues with reporting students who withdraw or who graduate. However, we concur with the finding and acknowledge the specific set of circumstances that led to this issue. The number of these cases is limited. We understand the importance of accurate reporting and our internal procedures have been adjusted. We are committed to maintaining compliance with all regulatory requirements.