Finding 1118429 (2024-003)

Finding number: 2024-003 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster Assistance listing #: 84.063 and 84.268 Award year: 2024 Compliance requirement: Eligibility Criteria According to 34 CFR 685.303 Processing loan proceeds: (g) Treatment of excess loan proceeds. Before the disbursement of any Direct Subsidized Loan, Direct Unsubsidized Loan, or Direct PLUS Loan proceeds, if a school learns that the borrower will receive or has received financial aid for the period of enrollment for which the loan was intended that exceeds the amount of assistance for which the student is eligible (except for Federal Work-Study Program funds up to $300), the school must reduce or eliminate the overaward by either— (1) Using the student's Direct Unsubsidized Loan, Direct PLUS Loan, or State-sponsored or another non-Federal loan to cover the expected family contribution, if not already done; or (2) Reducing one or more subsequent disbursements to eliminate the overaward. Condition The Federal Government requires institutions to reduce aid given to students if they learn that a borrower will receive financial aid that exceeds the amount of assistance for which the student is eligible to eliminate the overaward. During our testing, we noted 1 student, out of a sample of 40, whose need-based aid exceeded students remaining need. Our sample was not, and was not intended to be, statistically valid. Cause The College did not have adequate internal controls in place to reduce need-based aid awarded below expected need. As a result, the College disbursed subsidized direct loans that exceeded eligible need. Effect The College disbursed loans that exceeded eligible need-based aid. Questioned Costs $5,500 Identification as a Repeat Finding, if applicable Not applicable. Recommendation The College should update their procedures for calculating need. These procedures should include a control to restrict need-based aid to eligible disbursements. View of Responsible Officials The College agrees with the finding.