Finding Text
Criteria: 34 CFR 685.201 (a) (1-2) notes, “(1) To obtain a Direct Subsidized Loan or a Direct
Unsubsidized Loan, a student must complete a Free application for Federal Student Aid and
submit it in accordance with instructions in the application. (2) If the student is eligible for a
Direct Subsidized Loan or a Direct Unsubsidized Loan, the school in which the student is
enrolled must perform the following functions: (i) Create a loan origination record and transmit
the record to the Secretary. (ii) Ensure that the loan is supported by a completed Master
Promissory Note (MPN) and, if applicable, transmit the MPN to the Secretary. (iii) In
accordance with 34 CFR 668.162, draw down funds or receive funds from the Secretary, and
disburse the funds to the student.”
Condition: The College did not properly disburse Direct Unsubsidized Loans for 3 out of 40 students (7.5%).
We consider this condition to be an instance of noncompliance to the Eligibility compliance requirement and is not a repeated finding. Statistical sampling was not used in making sample selections. Questioned Costs: $0
Cause and Effect: Without proper review of eligibility of financial aid, students may receive an incorrect amount of Title IV aid.
Recommendation: We recommend the College evaluate policies and procedures to ensure students receive the proper amount of Title IV aid.
Views of Responsible Officials: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.