Finding Text
Criteria: A student may not receive a Federal Direct Subsidized Loan amount that exceeds the student’s estimated cost of attendance for the period of enrollment less the borrower’s expected family contribution and estimated financial assistance for that period. Further, a student’s final year must be prorated based on the remaining credits enrolled during the shortened academic year (34 CFR 685.203). Condition: We tested forty files, thirty-five of which were Federal Direct Loan recipients, and two students received incorrect subsidized and unsubsidized loan amounts. We consider this to be an instance of non-compliance and is repeated from the prior year finding at 2024-004. Cause: The condition was caused by not using remaining enrolled credits to prorate the student’s final shortened academic year. Effect or Potential Effect: The result is students received incorrect Federal Direct Loan amounts. Questioned Costs: $1,564 Recommendation: We recommend the Institution return ineligible $1,564 and increase controls over packaging direct loans. Views of Responsible Officials: Management agrees with the finding.