Finding 371187 (2023-001)

Over Award Review and Correction Action Taken – Kansas Health Science Center (KHSC) Identifying Number: 2023-001 Finding: Eligibility – Determining Federal Direct Student Loan Awards Applicable Regulation: Per 34 CFR 686.203(b)(iii), in the case of a graduate or professional student for a period of enrollment beginning on or after July 1, 2012, the total amount the student may borrow for any academic year of study under the Direct Unsubsidized Loan program may not exceed $8,500. Per 34 CFR 685.203(c)(2)(v), the additional amount that a student described in paragraph (c)(1)(i) of this section may borrow under the Direct Unsubsidized Loan Program for any academic year of study may not exceed the following: in the case of a graduate or professional student, $12,000. Finding: During testing of eligibility, 7 out of 7 students selected for testing were over awarded Unsubsidized Federal Direct Loans. KHSC improperly awarded 61 out of 61 students Unsubsidized Federal Direct Loan in excess of the maximum amount for one academic year, amounting to [$4,445] per student, for a cumulative over award of [$271,146]. Summary: Prior to the commencement of the independent audit conducted for the fiscal year ended May 31, 2023, the institution discovered that it had over awarded Unsubsidized Federal Direct Loan funds to its students. Specifically, the institution awarded additional Unsubsidized Federal Direct Loan funds based on 12-month academic calendar instead of prorating the award based on a 10-month academic calendar. This error resulted in an over award of [$4,445] per student. The institution conducted a file review and refunded all amounts owed to the Federal Student Aid programs because of the file review. The institution also informed the auditor of this error. Corrective Action Taken or Planned: Once the above noted error was discovered, the institution conducted an audit of all student aid packages for students enrolled in the 2022-2023 academic year. It was determined that 61 current students had been over awarded by a net amount of $4,445, for a total of $271,146. Findings were compiled and a plan was created to return over awarded funds and communicate the error to students. The institution also consulted with the Department of Education to confirm its revised calculation was appropriate. The institution returned the funds between July 5-July 20, 2023. Further, the institution made students whole by forgiving any student balances that would have been paid by the over award amount. Emails were sent to all impacted students on July 3, 2023 notifying them of the error. The institution also subsequently notified students that any account balance that remained based on the reversal of the over award would be forgiven. Students who received an estimate financial aid award with the incorrect figures, but who had not yet received aid, were notified of the error and provided updated award information. To ensure this does not happen again the institution has updated their internal student finance audit to include a review of all aid eligibility in conjunction with the next year’s academic calendar for each class of students. Upon any determination that future aid should be prorated, calculation(s) will be completed and reviewed with leadership before implementation. An internal review and approval process will then be enacted and documented. The institution informed RSM of this error and the corrective actions taken. Contact Person Lawrence McGhee, Associate Vice President of Financial Aid, lawrencemcghee@tcsedsystem.edu Completion Date July 20, 2023