Finding 1186751 (2025-002)

Finding Number 2025-002 Assistance Listing Number 84.063 and 84.268 Program Name Student Financial Assistance Cluster Federal Agency Department of Education State Agency Tennessee State University Federal Award Identification Number N/A Federal Award Year 2024 and 2025 Finding Type Significant Deficiency and Noncompliance Compliance Requirement Special Tests and Provisions Repeat Finding 2024-003 Pass-Through Entity N/A Questioned Costs N/A FINDING As noted in the two prior audits, for the federal Direct Loan and Pell Grant programs, Tennessee State University continued to not report timely and accurate information regarding students’ enrollment statuses BACKGROUND The Student Financial Assistance programs provide financial assistance to eligible students attending institutions of postsecondary education. The Title IV programs include assistance such as Pell Grants, Direct Student Loans, and Federal Work Study. To be eligible for student financial assistance, the student must first complete the Free Application for Federal Student Aid (FAFSA). Each school listed on a student’s FAFSA will receive the student’s Student Aid Report. The school then notifies the student of their total aid package. The U.S. Department of Education (ED) has established certain requirements for each school to participate in the student financial assistance programs. For student recipients of Pell Grants or Direct Loans, ED requires institutions to report students’ enrollment statuses for each term to the National Student Loan Data System (NSLDS). The institution is also required to report changes to students’ enrollment, such as graduations, withdrawals, and transitions between full-time and part-time status. Tennessee State University’s (the university) Enrollment Reporting Office reports directly to the National Student Clearinghouse (NSC). The data entered into NSC is automatically uploaded to NSLDS. It is then the responsibility of the university’s management to maintain the data in NSLDS and make any necessary changes or updates. CONDITION AND CAUSE University management, in response to the prior finding, hired additional staff, reviewed and updated operational procedures, and communicated the withdrawal process in training and staff meetings; however, these corrections did not resolve the issues around enrollment reporting and withdrawal dates. We tested a sample of 60 Direct Loan borrowers and/or Pell Grant recipients at the university. During our testing, we found that the university did not correctly report status changes in NSLDS for 9 of the 60 students (15%). These 60 students had a total of 93 reportable status changes during the academic year, and management incorrectly reported 11 of those 93 (12%) status changes to NSLDS as of July 30, 2025 (the date of our testwork). As stated above, a status change includes changes to students’ enrollment, such as graduations, withdrawals, and transitions between full-time and part-time status. There were instances where management reported the proper enrollment information in NSC; however, we noted the information in NSLDS was incorrect. Despite management’s responsibility to ensure that enrollment information is correctly reported in NSLDS, management either did not properly update the enrollment information in NSLDS or did not review the information to ensure statuses were accurate. Management was unable to determine the cause of the discrepancies that led to improper reporting in NSLDS. The errors included instances of statuses not reported and reported incorrectly. Specifically, we found the following: Not Reported · For 1 student, the university did not report the student as attending three-quarters time for the fall 2024 term. There was no enrollment history in NSLDS for this student until the spring 2025 term. · For 1 student, the university did not report the student’s status, despite the student being enrolled in 9 credit hours. · For 1 student, the university had not reported the student’s full-time status to NSLDS, as of the date of our testwork, July 30, 2025. During the first week of the spring 2025 term, 1 student increased enrollment to half-time and then changed to full-time 9 days later. This error is likely due to the half-time status being reported 58 days late. · For 1 student, management could not provide any enrollment history in NSLDS. The student had 2 status changes that should have been reported for the 2024 fall term. According to management, the cause was likely due to the student being purged and then reinstated in the middle of the semester. · For 1 student who completed academic requirements in fall 2024 and graduated in May 2025, the university did not update the reporting roster to reflect the student’s graduation status. · For 1 student, the university did not report the student’s May 2025 graduation. As of July 30, 2025, the date of the testwork, NSLDS still showed the student as attending full-time. In addition to failing to report the student’s graduation status, because the student had federal loans, the university was required to report the status change within 60 days, but failed to do so. Reported Incorrectly · For 1 student, the university incorrectly reported the student as three-quarters time, despite the student being enrolled in 12 credit hours for the entire spring 2025 term. Management should not have reported a status change. · For 1 student, the university incorrectly reported the student as less than half-time despite the student being enrolled in 11 credit hours, which should have been three-quarters time. · For 1 student, management reported an incorrect effective date. The student began attending full-time on August 23, 2024. However, the university did not update the student’s enrollment status to full-time until the following spring semester and reported an effective date of January 3, 2025—133 days after the actual status date. CRITERIA The 2024–2025 Federal Student Aid Handbook, Volume 2, Chapter 3, states that institutions “must report enrollment changes within 30 days; however, if a roster file is expected within 60 days, you may provide the updated data on that file.” In the introduction to Chapter 1, the NSLDS Enrollment Reporting Guide states, “Accurate and timely Enrollment Reporting to NSLDS is essential to the Department of Education’s successful delivery of Title IV aid.” The requirements are established in Title 34, Code of Federal Regulations, Part 685, Section 309(b). Chapter 4.4.2 of the NSLDS guide states, Enrollment Status Effective Date is the date that the current enrollment status reported for a student was first effective. . . . Effective Date, and its related enrollment status, must be reported for both the Campus-Level (Campus Enrollment Effective Date) and the Program-Level (Program Enrollment Effective Date), however the dates may not always match, depending on the student’s circumstance. In addition, Chapter 7.14.4 of the NSLDS guide states, “NSLDS records must be accurately matched with your enrollment records. You should review, update, or verify student enrollment statuses and other information with information that appears on the Enrollment Reporting Roster file.” EFFECT Timely and accurate enrollment reporting is critical for effective management of ED programs. The accurate administration of the Title IV programs depends heavily on the accuracy of the enrollment information reported by schools. Accurate, timely, and complete enrollment data is also important to the students, who can view their current campus enrollment information and their program enrollment history. Also, if an individual no longer attends the university but their lack of attendance is not reported, the individual’s loan repayment grace period could be improperly extended, resulting in the student’s loan repayments being improperly deferred. In addition, if the university violates federal requirements, ED could impose a fine on the university and could limit, suspend, or terminate its participation in a Title IV program. These actions would negatively affect the university’s operations and the students impacted by the loss of Title IV aid. RECOMMENDATION Management should review and update its processes as necessary to ensure the Enrollment Services Office uploads and submits the correct information to NSLDS. In addition, the Assistant Vice President of Admissions and Records should ensure that staff know reporting deadlines and the importance of reporting enrollment status changes. The Assistant Vice President of Admissions and Records should also ensure that enrollment status changes are reported timely and the Financial Aid Office is promptly notified. Management should implement a review throughout each term to verify that accurate information is reported in NSLDS. MANAGEMENT’S COMMENT We concur. The management of and the compliance with Title IV programs accountability is jointly owned by the Admissions & Records Office and the Financial Aid Office, and as such require commingled remediation. While we have made significant improvements in the activities in the separate areas, including hiring additional staff, updating process documents, and re-emphasizing the process during staff meetings, these findings reflect there is more to do related to the connectivity activities and procedures of the Offices to ensure both accurate and timely reporting of students’ enrollment statuses. We have identified this is particularly critical in the compliance procedures that require sequential actions by different departments. Starting in the Fall 2025 semester, the Financial Aid Office receives an automated file of the students who have withdrawn that day. This report serves as a notice to review and update students’ enrollment statuses. The additional procedure helps to ensure accurate dates are being captured timely. In addition to the process improvements, we continue to create a higher standard of operating effectiveness to ensure all critical policies and procedures are being executed properly without exception.