Finding Text
FINDING 2022-003 ? Subsidized Loan Allocation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program ALN and Program Expenditures: 84.268 ($6,877,168) Award Number: P268K222030 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The amount of Subsidized and Unsubsidized Federal Direct Loans awarded was incorrect for one of the fifty-four students in our sample that received Federal Direct Loans. Criteria: The annual subsidized Federal Direct Loan limit is $3,500 for freshmen, $4,500 for sophomores, and $5,500 for juniors and seniors. Cause: The student in question declined to participate in the Federal Work Study program. When this occurred, unsubsidized loans were awarded later to the student without reviewing the student?s remaining subsidized loan eligibility. Possible Asserted Effect: The student was eligible for an additional $1,407 of subsidized federal direct loans. However, the student received a $1,407 unsubsidized loan. Repeat Finding: There was not a similar finding the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: $1,407 of unsubsidized loan funds should be reclassified to subsidized loans. Procedures should be improved to ensure that subsidized loan eligibility is reviewed before awarding unsubsidized loans. Management Response: The Financial Aid Director updated reallocated $1,407 of unsubsidized loan funds as subsidized loan funds on August 3, 2022. Procedures will be improved to ensure that subsidized loan eligibility is reviewed before awarding unsubsidized loans.