Finding Text
Eligibility – Direct Loan Awarding Federal Agency: Department of Education Federal Program Title: Student Financial Assistance Cluster ASSISTANCE LISTING Numbers: 84.268 – Federal Direct Student Loans Federal Award Identification Number and Year: P268K240362 2025 Award Period: June 1, 2024 to June 30, 2025 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matter Criteria or specific requirements: Direct Subsidized Loans and Direct Unsubsidized Loans are subject to annual loan limits that vary based on a student’s grade level and, for Direct Unsubsidized Loans, dependency status, in accordance with 34 CFR §685.203. The annual loan limit represents the maximum amount a student may receive for an academic year. For undergraduate students, there is a combined annual loan limit for Direct Subsidized and Direct Unsubsidized Loans, of which no more than a specified portion may consist of Direct Subsidized Loans (the “annual subsidized maximum”). Condition: During eligibility testing, we identified one student who was classified as an independent junior and was eligible to receive up to $5,500 in Direct Subsidized Loans. However, the student was awarded only $5,000 in Direct Subsidized Loans. The student was also awarded $7,500 in Direct Unsubsidized Loans, consistent with the applicable annual loan limit. The student’s financial aid package was adjusted using professional judgment; however, an error in recalculation resulted in the student being underawarded $500 in Direct Subsidized Loans and overawarded Direct Unsubsidized Loans by $500. Questioned costs: None. Context: Out of a sample of 41 students tested for eligibility of federal student financial aid awards, the University did not properly award one student the full amount of Direct Subsidized Loan for which the student was eligible. Cause: The error was due to human error during the manual packaging and recalculation process. Effect: The student was underawarded Direct Subsidized Loans and correspondingly overawarded Direct Unsubsidized Loans during the 2024–2025 award year. Repeat finding: No Recommendation: We recommend that the University enhance its policies and procedures related to the packaging and awarding of financial aid, particularly in situations requiring manual calculations or professional judgment, to ensure student eligibility is accurately determined and awards are properly calculated. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. Management has addressed their corrective action plan in a separately issued letter.