Finding Text
Criteria: According to 34 CFR 685.203 an eligible independent student in their third year of school can borrow up to $5,500 in Subsidized Direct Loans and $7,000 in Unsubsidized Direct Loans. Condition/Context: During our student file testing we noted one student out of forty was disbursed the incorrect Direct Loan amount. Based on the student’s enrollment status and need this student was eligible for $5,500 in Subsidized Loans; however, the University awarded the student $4,500 in Subsidized loans which resulted in an under award of $1,000 in Subsidized Loans. We consider this error in awarding to be an instance of noncompliance of the Eligibility Compliance Requirement. Statistical sampling was not used when making sample selections. Questioned Costs: $0 Effect: A student was under awarded Subsidized Direct Loans in the amount of $1,000. Cause: The University’s internal controls did not identify the fact that the student was under awarded Subsidized Direct Loans in the amount of $1,000. Recommendation: We recommend the University closely monitor all students who receive direct loans and verify that they receive the proper amount of Subsidized Direct Loans. Views of Responsible Officials: Management agrees with this finding and response is included in Corrective Action Plan.