Finding Text
Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program ALN and Program Expenditures: 84.268 ($1,647,759) Award Number: P268K243629 Federal Award Year: July 1, 2023 to June 30, 2024 Questioned Costs: $1,000 Condition Found: The amount of unsubsidized Federal Direct Loans awarded was incorrect for one of thirty-two students in our sample that received Federal Direct Loans. Criteria: The annual Federal Direct Loan Limit is $5,500 for freshman, $6,500 for sophomores, and $7,500 for juniors and seniors. Cause: While the student was enrolled in fifteen credit hours in fall 2023 semester, the student only passed three credit hours for the semester. Therefore, the student did not have enough credit hours to qualify for Federal Direct Loans at the junior/senior level. Aid was awarded based on the assumption the student would pass all of classes in the fall 2023 semester and then qualify for an additional $1,000 of Federal Direct Loan funds. Cumulative credit hours completed were not verified before disbursing spring 2024 aid. Possible Asserted Effect: The student was awarded an unsubsidized federal direct loan at the junior level when for financial aid purposes the student was at sophomore level. Therefore, the student was only eligible to receive $6,500 in Federal Direct Loans instead of the $7,500 received. $1,000 should be returned to the Department of Education. Repeat Finding: There was not a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation:$1,000 of unsubsidized loan funds should be returned to the Department of Education. Credit hours completed should be reviewed before aid is disbursed. Management Response: Management agrees with the auditors’ finding and their recommendation. The Financial Aid Director returned $1,000 of unsubsidized Federal Direct Loan funds to the Department of Education on October 24, 2024. The financial aid office and registrar’s office will work together to ensure that both parties are aware of the student’s credit hours passed and their eligibility for federal aid.