Finding Text
Department of Education
Student Financial Aid Cluster
CFDA # 84.268 – Federal Direct Student Loans
CFDA # 84.038 – Federal Perkins Loan Program
CFDA # 84.063 – Federal Pell Grant Program
2022-2023 Award Year
Eligibility – Calculation of the Amount of Pell, Subsidized and Unsubsidized Direct Loan Assistance Awarded
Material Weakness in Internal Controls over Compliance and Noncompliance
Criteria: 34 CFR section 690 provides the applicable criteria and guidance on awards under the Federal Pell Grant Program. 34 CFR section 685 provides the applicable criteria and guidance on awards under the Federal Direct Student Loans Program.
Condition: During testing over the eligibility requirements, the following deficiencies were noted:
•2 of 60 students were not awarded the correct amount of Pell. One student was under awarded by$2,773 and one was over awarded by $862.
•7 of 60 students were not awarded the correct amount of subsidized loans. 4 students were underawarded subsidized loans based on being awarded as the wrong academic year in school; and 3 studentswere over awarded subsidized loans as the students did not have financial need.
•5 of 60 students were not awarded the correct amount of unsubsidized loans. All 5 of the students witherrors were under awarded unsubsidized loans based on being awarded as the wrong academic year inschool.
Cause: Presentation College experienced a staffing shortage along with turnover in the financial aid department and errors occurred as part of determining the student aid throughout the year. Along with this, the College determined that errors in the software they were using to determine student aid were causing issues with over awarding when students did not have financial need.
Effect: Students were not awarded the proper amount of aid.
Questioned Costs: Pell error: $1,911 under awarded; Direct subsidized Loans: $3,952 under awarded and $6,185 over awarded; Direct unsubsidized Loans: $5,940 under awarded.
Context/Sampling: A nonstatistical sample of 60 students who received Title IV disbursements out of 485 students who received aid. The total aid tested in sample was Pell grants of $144,700 and Direct loans of $359,880.
Repeat Finding from Prior Year(s): Yes.
Recommendation: Based on the announced College closure, we recommend the students with errors be corrected.
Views of Responsible Officials: Management agrees with the finding. Management has reviewed the errors and made corrections as needed.