Finding Text
Finding 2024-002: AL #84.268 Federal Direct Student Loans
Criteria:
Under the advanced payment method, the University is required to disburse funds requested from DOE’s grants management system (G5) as soon as administratively feasible but no later than three business days following the date the institution received those funds (34 CFR §688.162(b)(3)).
Condition:
In May 2024, the University withdrew $2,718,000 in FDL from the G5. These funds were not disbursed to students within three business days of receipt and were held by the University until July 2024.
Cause:
The SFA Office experienced processing and student packaging delays from the rollout of the Better Free Application for Federal Student Aid (FAFSA) and related COD updates. This delayed the disbursement of funds to student billing statements.
Effect:
The University did not disburse funds within the required timeframe.
Questioned Costs:
None
Auditors’ Recommendation:
The University should provide necessary ongoing cross training as it assesses the staffing needs of the SFA Office to ensure disbursements of student financial aid are done timely and do not exceed immediate need.
Views of Responsible Officials:
The University made an advance funding request in May 2024 for 2024-2025 aid due to severe processing delays related to the rollout of the Better FAFSA and related COD updates. The University’s first Summer 2024 term began on April 1, 2024, with subsequent starts on April 29, 2024, and May 20, 2024. Due to significant difficulties encountered with the Better FAFSA rollout and significant staffing turnover in the financial aid department at that time, the University did not disburse aid and transmit it to COD at the normal rate. This issue was purely timing and was resolved by July 2024.