Finding Text
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):
N. Special Tests and Provisions – Return of Title IV Funds: The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student’s withdrawal date. A student earns 100 percent if his or her withdrawal date is after the completion of 60 percent of (1) the calendar days in the payment period or period of enrollment for a program measured in credit hours, or (2) the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours (34 CFR 668.22(e)(2)). Otherwise, the percentage earned by the student is equal to the percentage (60 percent or less) of the payment period or period of enrollment that was completed as of the student’s withdrawal date. The percentage of Title IV grant or loan assistance that has not been earned by the student is the complement of one of these calculations. Standard term-based institutions must always use the payment period as the basis for the determination.
The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Returns of Title IV funds must be distributed in the prescribed order (34 CFR 668.22(i)).
Condition:
For certain students that withdrew during the year, the University did not properly calculate the amounts to be returned to the ED. Additionally, funds due for return were not returned in the proper order.
Cause:
Insufficient administrative oversight and internal controls with respect to return of Title IV fund calculations.
Effect or Potential Effect:
The University was not in compliance with the return of Title IV funds requirements.
Questioned Costs:
None.
Context:
For 1 of 2 students selected for testing, the University did not properly calculate the amount of Title IV aid to be returned to the ED. The amount returned to the ED was greater than the amount owed based upon the students’ withdrawal calculation.
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 student withdrawal calculations are prepared accurately.
Views of Responsible Officials:
We acknowledge the accuracy of this finding, such that one student’s required return of funds was identified as having been improperly calculated during the R2T4 calculation. The order in which the funds were reduced and returned to the Department was incorrect. Lack of clarity about the enrollment level and activity of the student during the term caused the miscalculated award amounts. A lack of system driven calculation and insufficient knowledge of the proper order of funds (and required student authorization of post-withdrawal disbursement) were also contributing factors that resulted in this finding.
The University underwent a re-organization the resulted in the creation of a new division, Strategic Enrollment and Retention Management (“SERM”), effective February 2025. The recent organizational restructuring that placed the Registrar’s Office and the Office of Financial Aid under the new division of Strategic Enrollment and Retention Management is a strategic move to enhance the synchronization of essential data between these departments. This alignment is crucial for accurately determining withdrawal dates and understanding the academic calendar, which are essential components of the R2T4 calculation process. Enhanced inter-departmental communication facilitated by this structure will ensure more accurate and timely data sharing, essential for meeting compliance requirements. The ongoing support from FAS in setting up and optimizing Ellucian Colleague for our specific needs will significantly strengthen our capacity to meet and exceed compliance standards, thus preventing future occurrences of similar issues.
Starting June 2025, the Financial Aid Office will engage with FSA Partners and utilize NASFAA study materials to conduct comprehensive training for staff responsible for R2T4 calculations. Continuous education will be emphasized to keep staff updated on regulatory changes and best practices. We will utilize the capabilities of Ellucian Colleague to automate R2T4 calculations. This system will be set up to require authorization for post-withdrawal disbursements and ensure that award reductions are calculated in the correct order. We will introduce a secondary review process for all R2T4 calculations, where a seasoned financial aid counselor will verify the accuracy of the initial calculation and authorization documentation. We will standardize the process for documenting the authorization of post-withdrawal disbursements. Develop a standard communication template within Ellucian Colleague that includes explicit requests for student or parent authorization, ensuring compliance with federal regulations.