Federal Program Information:
Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268)
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation):
E. Eligibility – Federal Pell Grant (“Pell”) (Assistance Listing 84.063) – Each year, based on the maximum Pell Grant established by Congress, the Department of Education (“ED”) provides to institutions Payment and Disbursement Schedules for determining Pell awards. The Payment Schedule provides the maximum scheduled award a student would receive for a full academic year as a full-time student based on their expected family contribution (“EFC”) and cost of attendance (“COA”). The Disbursement Schedules are used to determine annual awards for full-time, three-quarter time, half-time, and less-than-half-time students. The steps to determine Pell awards are as follows: (a) Determine the student’s enrollment status, (b) calculate the cost of attendance, (c) determine the annual award, (d) determine the payment period, (e) calculate the payment for the payment periods, and (f) disburse funds at prescribed times.
E. Eligibility – Federal Direct Student Loans (“Direct Loans”) (Assistance Listing 84.268) - Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student's grade level and (for Direct Unsubsidized Loans) dependency status (34 CFR 685.203). The annual loan limit is the maximum amount that a student may receive for an academic year. For undergraduate students there is a combined annual loan limit for Direct Subsidized Loans and Direct Unsubsidized Loans, of which not more than a specified amount may be comprised of Direct Subsidized Loans (“annual subsidized maximum”). For independent undergraduate students (and for dependent undergraduate students whose parents are unable to obtain Direct PLUS Loans), the annual loan limits are (34 CFR 685.203(a) and (c):
• $9,500 for independent first-year undergraduates, not more than $3,500 of which may be subsidized;
• $10,500 for independent second-year undergraduates, not more than $4,500 of which may be subsidized; and
• $12,500 for independent third-, fourth-, and fifth-year undergraduates, not more than $5,500 of which may be subsidized.
E. Eligibility – Campus-Based Programs (Federal Work-Study “FWS”, Federal Supplemental Educational Opportunity Grant “FSEOG”) (Assistance Listing 84.033, Assistance Listing 84.007) - The maximum amount that can be awarded under the campus-based programs is equal to the student’s financial need (COA minus EFC) minus aid from other SFA programs and other resources.
Condition:
For certain students tested, the University improperly calculated the student’s Pell award. Additionally, for certain students, the University awarded and disbursed Direct Loans in an amount that was not commensurate with the student’s academic level.
Cause:
Insufficient administrative oversight and internal controls with respect to Title IV award eligibility.
Effect or Potential Effect:
The University is not in compliance with aid awarding criteria under the eligibility requirements. Failure to properly calculate eligible award amounts and properly award and disburse aid in accordance with the required guidelines could result in improper disbursements of Title IV aid.
Questioned Costs:
Known questioned costs: $2,995; total questioned costs: indeterminable.
Context:
We noted the following exceptions during our testing:
• For 2 of 25 students selected for testing, the amount of Pell awarded and disbursed to the student exceeded the student’s eligible award.
• For 1 of 25 students selected for testing, the University awarded and disbursed Direct Loans and FSEOG to the student in an amount that was not commensurate with the student’s academic level and/or need, resulting in an overaward of Direct Loans aid.
Identification as a Repeat Finding:
No similar findings noted in the prior year.
Recommendation:
We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that Title IV aid is properly calculated, awarded, and disbursed consistent with federal regulations.
Views of Responsible Officials:
The University did not appropriately review eligibility documentation resulting in over awards. The error arose due to the manual processing of student loans by a single financial counselor without adequate checks, leading to non-compliance with specific fund restrictions related to the student’s year in school and dependency status. A significant contributing factor was the absence of structured, periodic quality assurance reviews.
The University partnered with Financial Aid Services (“FAS”) in February 2025 to review the current systems and process, and devise appropriate systems, checks, and balances to address each deficiency in our financial aid processes and personnel.
In addition, as part of the University’s transition of its ERP system from Jenzabar to Colleague, Financial Aid will transition from the use of PowerFaids to Ellucian Colleague for financial aid management, which was driven by the need for more robust, systematic controls that can accurately adjust and calculate Cost of Attendance (COA) on a per-student basis. This system change is expected to automate many of the processes that were previously prone to human error, ensuring compliance with regulatory requirements. The University’s Financial Aid counselors will continue to monitor students' credit hours and make necessary adjustments to aid awards, thereby maintaining compliance and addressing any discrepancies proactively. This plan reflects our commitment to upholding the highest standards of financial aid management and ensuring that our processes are transparent, compliant, and responsive to the needs of our students.
The University will integrate automated processes in our financial aid packaging to reduce human error. The adoption of the Ellucian Colleague system by JCSU will allow for automatic enforcement of packaging and transmittal rules, tailored to specific funds. Additionally, we will utilize exception reports from Ellucian Colleague to identify and correct discrepancies in real-time. We will establish a routine monitoring system to regularly check the accuracy of financial aid awards against eligibility criteria.