Finding Text
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), 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 – Eligibility for Individuals – In the process of applying for federal financial aid, an Institutional Student Information Record (“ISIR”) is sent electronically to the institution. The institution uses the ISIR to help determine student eligibility, award amounts, and disbursements. The ISIR may contain codes that relate to student eligibility requirements. Such codes must be resolved by the institution. In addition, federal financial aid must be coordinated among the various programs with other federal and nonfederal aid (need and non-need based aid) to ensure that total aid is not awarded in excess of the student’s financial need or cost of attendance (“COA”). The determination of need-based Student Financial Assistance (“SFA”) award amounts is based on financial need. Financial need is defined as the student’s COA minus the Student Aid Index (“SAI”). E. Eligibility – Campus-Based Programs (FSEOG) (Assistance Listing 84.007) – The Federal Supplemental Educational Opportunity Grant (FSEOG) program provides grants to eligible undergraduate students. Priority is given to students who have not previously earned a bachelor’s or first professional degree. Priority is given to Federal Pell Grant recipients who have the lowest SAIs (34 CFR 676.10). 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). Under 34 CFR 685.203(d) and (e) the aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans (a borrower's maximum allowable outstanding loan debt, excluding capitalized interest, but including amounts borrowed under the Federal Family Education Loan Program prior to 2010) are $31,000 for dependent undergraduate students (except for dependent students whose parents are unable to borrow Direct PLUS Loans), not more than $23,000 of which may be subsidized. Condition: For certain students tested, the University improperly calculated the student’s COA. The University also failed to resolve ISIR comments codes prior to disbursing Title IV aid. In addition, for certain students, the University awarded aid in excess of award limits. Finally, we noted that priority was not given to Pell recipients with the lowest SAI when disbursing FSEOG awards. 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 COA, resolve ISIR codes, properly award and disburse aid, and prioritize the correct students for FSEOG awards in accordance with the required guidelines could result in improper disbursements of Title IV aid. Questioned Costs: Known questioned costs: $3,500; total questioned costs: indeterminable. Questioned costs of $3,500 were identified as a result of over-awards disbursed to students in the selected sample; however, sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 6 of 40 students selected for testing, the University failed to properly calculate the COA. • For 1 of 40 students selected for testing, the University disbursed Direct Loans in excess of the established maximums. • For 2 of 40 students selected for testing, the University did not properly resolve all ISIR comment codes prior to disbursing Title IV aid for the award year. • We examined the University’s awards disbursement detail noting that all Pell recipients did not receive FSEOG awards. In addition, we identified 3 FSEOG recipients who had a greater SAI than students who did not receive FSEOG. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-001 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that the COA is properly calculated, ISIR comment codes are resolved, Title IV aid is properly calculated, awarded, and disbursed, and priority is given to Pell recipients with the lowest SAI when disbursing FSEOG awards, consistent with federal regulations. Views of Responsible Officials: The University acknowledges that it did not consistently apply federal eligibility and awarding requirements during the 2024–2025 award year. Specifically, students with the highest financial need, as determined by the lowest Student Aid Index (SAI), were not systematically prioritized for Federal Supplemental Educational Opportunity Grant (FSEOG) awards, and eligibility documentation and ISIR comment codes were not consistently reviewed and fully resolved prior to awarding and disbursing Title IV aid. As a result, limited instances occurred in which aggregate Direct Loan limits were exceeded and discrepancies existed between cost of attendance values maintained in PowerFAIDS and those reported to the Common Origination and Disbursement (COD) system. The University determined that these deficiencies were primarily attributable to gaps in internal controls, including the absence of structured, periodic quality assurance reviews, staffing transitions within the Office of Financial Aid, and insufficient training and supervisory oversight to ensure consistent compliance with federal requirements.