Finding Text
Criteria: Per 2 CFR Part 200 Appendix A, Section IV of the Uniform Guidance; Student Financial Assistance
(SFA) Programs, the determination of need based SFA award amounts is based on financial need. Financial need is defined as the student’s cost of attendance (COA) minus the student’s expected family contribution (EFC) (as
computed by the central processor and included on the student’s SAR/ISIR). Once a student is awarded any financialaid, to find remaining financial need one would use the following formula – COA minus EFC minus Estimated Financial Assistance (EFA) (§ 668.2) equals remaining need. To avoid overpayments, need-based SFA awardscannot exceed the student’s overall financial need.
Condition: A student received a direct subsidized loan despite showing no financial need, as the student’s EFC was higher than the student’s COA. The student’s EFC was determined to be $24,282, whereas their COA was $20,686. Despite no financial need existing, the student was awarded a direct subsidized loan of $3,500, resulting in an over award.
Cause and Effect: As a result of inadequate reviews of student’s financial need during the application process, the College awarded a direct subsidized loan to an ineligible student as no EFA existed for this individual.
Recommendation: We recommend that management implements a more thorough review of individual student
files before distribution of direct subsidized loans and other need based SFA awards. This review process should
include a careful examination of each student’s EFC and COA to ensure that only eligible students receive needbased aid.
Management Response: Management agrees this student had an incorrect type of loan awarded. Based off the
students EFC number the loan should have been an unsubsidized loan and not the subsidized loan. The Financial
Aid office will make the corrections of the loan type to the student’s account. Financial Aid will add an internal
control process to ensure there is a second verification of student federal loans in place.