Finding Text
Considering Subsidized Loans First Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Direct Student Loan Program Federal Award Identification #: P268K253147 Condition: Students were not appropriately awarded subsidized loans up to their eligible annual limit prior to considering unsubsidized loans. Criteria: 34 CFR 685.200(a)(1)(iii); HEA: Sec. 484 Questioned Costs: $6,250 Context: Out of 31 students tested, 6 students were under awarded $6,250 total in subsidized direct loans since they were awarded and disbursed below their maximum eligibility for the year. The amounts under awarded ranged from $375 - $2,062 per student. Cause: The University improperly reduced student's overall federal direct loans instead of just their unsubsidized direct loan. Effect: Incorrect allocation of subsidized versus unsubsidized which affects the amount and timing of interest the student must repay. Identification as repeat finding, if applicable: N/A Recommendation: We recommend the University ensure that students are awarded their maximum subsidized loan eligibility prior to considering unsubsidized loans. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.