Finding Text
Program Information: Federal Direct Student Loan Program (ALN 84.268)
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): E. Eligibility – Aggregate Loan Limits for Subsidized and Unsubsidized Loans: Aggregate loan limits for subsidized and unsubsidized loans are: $31,000 for a dependent undergraduate student (except for dependent students whose parents cannot borrow a PLUS loan) (subsidized loan portion may not exceed $23,000 of the aggregate limit amount); $57,500 for an independent student and for a dependent student whose parents cannot borrow a PLUS loan (subsidized loan portion may not exceed $23,000 of the aggregate limit amount); and $138,500 for a graduate or professional student
(subsidized portion limited to $65,500). This $138,500 limit includes loans for undergraduate study.
Condition: Certain students selected for testing were disbursed Federal Direct Student Loan funds in excess of the aggregate Subsidized and Unsubsidized direct loan limit.
Cause: Administrative oversight.
Effect or Potential Effect: The University is not in compliance with packaging Federal Direct Student Loans within aggregate loan limits.
Questioned Costs: Below reporting threshold.
Context: For 1 of 60 students selected for testing, the student was packaged and disbursed Federal Direct Student Loans in excess of the aggregate loan limit.
Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2020-012 in the prior year schedule of findings and questioned costs.
Recommendation: We recommend that the University enhance its procedures to ensure that Federal Direct Student Loans are awarded/disbursed in accordance with federal guidelines.
Views of Responsible Officials and Planned Corrective Actions: The financial aid department has developed a Direct Loan workflow process in accordance with federal guidelines. With the implementation of Colleague, this issue has been resolved. Utilizing Colleague's software, the financial aid office can now accurately assess our students' aid eligibility to ensure they are appropriately awarded. Colleague has Award Eligibility Criteria (AEC) rules invoked at transmittal to determine if the student is eligible to receive loan funds. Items this rule checks for include half-time enrollment, completion of Entrance Interview, Satisfactory Academic Progress, etc. AEC is primarily used as a criterion a student must pass before aid can be transmitted to Accounts Receivable. There are two sets of rules on the AEC form: Eligibility Criteria for Awarding and Eligibility Criteria for Transmitting. These rules monitor students' aggregate loan limits, SAP, as defined by Uniform Guidance rules and requirements for federal awards, and provide SAU with the internal controls needed for their Title IV program. The Financial Aid Director follows Ellucian Colleague’s best practice recommendations.