Finding 497657 (2023-001)

Criteria According to 34 CFR 685.203(j): Maximum loan amounts. In no case may a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan amount exceed the student’s estimated cost of attendance for the period of enrollment for which the loan is intended, less – (1) The student’s estimated financial assistance for that period; and (2) In the case of a Direct Subsidized Loan, the borrower’s expected family contribution for that period. According to 2 CFR Part 200, Appendix XI of the Compliance Supplement updated April 2022: In determining loan amounts for unsubsidized Stafford loans, the financial aid administrator subtracts from the COA, the EFC and the estimated financial assistance for the period of enrollment that the student (or parent on behalf of the student) will receive from federal, state, institutional or other sources. Unsubsidized Stafford loans, PLUS loans, loans made by a school to assist the student, and State-sponsored loans may be used to substitute for EFC. According to Volume 3 Page 143 of the 2018-2019 Student Financial Aid Handbook: Except for Pell Grants, FSA (“federal student aid”) award amounts are also constrained by the other aid that a student receives, known as Estimated Financial Assistance. The general rule is that the student’s total aid may not exceed the student’s financial need (Need = Cost of Attendance minus EFC). The cost of attendance for the Campus-Based, TEACH Grant, and Direct/Direct PLUS Loan programs is based on the student’s enrollment status and costs for the period in which the aid is intended. The Cost of Attendance used for Pell Grants and Iraq & Afghanistan Service Grants is always the full-year costs for a full-time student, so you may have to prorate actual or average costs up for students who are attending less than an academic year (or who are part-time in a term program) or prorate down for students who are attending for periods longer than an academic year. Condition The Financial Aid Department is responsible for awarding federal, state and institutional financial aid. The Federal Government requires the College to compare the student’s Cost of Attendance (“COA”) with the student’s Estimated Family Contribution (“EFC”) and Estimated Financial Assistance (“EFA”). EFA must include all grants and scholarships the College anticipates the student will receive regardless of the source. The total aid awarded to a student cannot exceed the student’s COA. Financial aid awarded by outside sources is often sent directly to the Bursar to be applied against the student’s account. The Bursar notifies the Financial Aid Department to ensure the outside aid is included in the student’s EFA. During our testing, we noted 1 student, out of a sample of 40, that received aid in excess of their financial need and cost of attendance. Cause The Student Financial Services Office failed to notify the Financial Aid Office of outside aid received on behalf of a student who received other financial aid. As a result, the student’s EFA was incorrect. Effect The Financial Aid Department awarded the student financial aid based on an incorrect EFA. As a result, the student received federal and state grants, federal loans and private loans that in total exceeded their cost of attendance. Questioned Costs $533 Perspective Our sample was not, and was not intended to be, statistically valid. Of the 40 students selected for testing, 1 student, or 2.5% of our sample, was awarded financial aid in excess of the student’s cost of attendance. Identification as a Repeat Finding, if applicable Not applicable Recommendation The College should create formal procedures for when aid is sent directly to the Student Financial Services Office. These procedures should include a review of the student’s billing statement to determine if the financial aid has been disbursed and timely notification of the aid to the Financial Aid Office. Once the Financial Aid Office is notified of the outside aid, the student’s financial aid award should be reviewed to determine if any adjustment needs to be made to the award. View of Responsible Officials The College agrees with the finding.