Finding Text
Finding Reference Number: 2023-001
Student Financial Aid Cluster: Federal Direct Student Loans (Assistance Listing 84.268)
Federal Award Year: 2023
U.S. Department of Education
Compliance Requirement: Eligibility
Type of Finding: Significant Deficiency and Noncompliance
Prior Year Finding: N/A
Statistically Valid Sample: No
Criteria
Under 34 CFR 685.203(d) and (e) aggregate loan limits for Direct Subsidized Loans and Direct Unsubidized Loans are established, outlining a borrowers maximum allowable outstanding loan debt, excluding capitalized interest.
Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition
During our testwork over the eligibility process, we identified 1 out of 40 instances where the student was awarded a federal direct loan and the maximum total aggregate outstanding loan debt as a result of the award was exceeded by $2,500.
Cause
The cause of the condition found was related to a student that had a C Flag and a comment code related to loan limits. When the College cleared the C Flag, College did not verify the student’s outstanding loan balance through the National student Loan Data System (NSLDS) as required by the College’s internal policies and procedures. Instead, the College reviewed the student’s aggregate loan balance within Colleague, the College’s internal system.
Possible Asserted Effect
The effect of the condition found is that the student received a federal direct loan that exceeded the aggregate loan limit.
Questioned Costs
$2,500
Recommendation
We recommend that the College review its existing internal controls surrounding the clearance of C-Flags to ensure that NSLDS is reviewed prior to clearing the C-Flag to ensure that students will not be awarded a direct loan that would result in the maximum aggregate limit being exceeded.
View of Responsible Officials
The College concurs. The College runs weekly reports from the Ellucian Colleague system to identify students with CFlags and comment codes for loan limits. While reviewing the report if a student has comment codes for loan limits, the staff member running the reports will research and assign the issue to the appropriate Financial Aid Assistant Director to adjust the loan accordingly.
For the student identified, the loan limit was calculated incorrectly in the Colleague system and the student was awarded a federal direct loan that exceeded their maximum total aggregate outstanding loan debt by
$2,500. It is our belief this was not an issue of identifying the CFLAG, it was human error with reduction of loans. To correct the issue this student was awarded institutional aid to cover the amount loans were reduced.
To confirm that no other student’s were impacted by a similar issue, a CFLAG full audit report was run for 2023. The report was reviewed to determine if there were any other students that had an aggregate loan limit issues. It was confirmed that this student was the only issue.