Finding Text
Audit Finding Reference Number Questioned Cost
2024-003 – Annual and Aggregate Loan Limits $1,000
Federal Program and Specific Federal Award Identification
CFDA Title and Number
84.268 Federal Direct Student Loan (Direct)
Federal Award Year
June 30, 2024
Federal Agencies
U. S. Department of Education
Pass-Through Entity
Not applicable
Criteria
Title IV regulations, 34 CFR 685.203 (b) stipulates that a dependent student may receive an additional unsubsidized loan in the amount of $2,000. Students whose parents are likely to be precluded by exceptional circumstances from receiving a PLUS loan may be eligible for an unsubsidized loan beyond the base amount of $2,000.
The total amount of Direct unsubsidized loans but excluding the amount of capitalized interest may not exceed (1) for a dependent undergraduate student, $23,000, or, effective July 1, 2008, $31,000, minus any Direct subsidized loan, and (2) for an independent undergraduate or a dependent undergraduate who qualifies for additional eligibility, $57,500, minus any Direct subsidized loan.
Conditions and Context
I noted during my audit one (1) student out of twenty-five (25) tested received $1,000 in unsubsidized loans in excess of the aggregate loan limit of $8,000.
However, the University has made adjustments to the student’s billing statements and returned the funds to the Department of Education prior to issuance of the report.
Cause
It appears that the University did not ensure that the student was eligible to receive the loan proceeds.
Questioned Costs
For the purposes of this condition, I have questioned costs totaling $1,000 related to the Direct loan program.
Effect
The University has not adhered to Title IV regulations regarding the disbursing of loan funds in accordance with the regulations. However, the University has made adjustments to the student’s billing statements and returned the funds to the Department of Education prior to issuance of the report.
Repeat Finding
Yes. See 2023-002.
Management’s Response
This finding resulted from a loan disbursement exceeding regulatory limits for one student. The issue was corrected before the audit report was finalized. The University will strengthen its review process prior to disbursement by ensuring additional loan eligibility is validated and documented. The Financial Aid Office will receive targeted training on aggregate loan monitoring. Corrective actions will be fully implemented by January 31, 2026.