Finding Text
Federal Program Information: Federal Direct Loan Program (ALN 84.268)
Criteria or Specific Requirement: According to 34 CFR 685.303, except in the case of a late disbursement under 685.303(f) or as provided in paragraph (b)(3)(iii) of § 685.303, a school may disburse loan proceeds only to a student, or a parent in the case of a Direct PLUS Loan obtained by a parent borrower, if the school determines the student has continuously maintained eligibility in accordance with the provisions of § 685.200 from the beginning of the loan period for which the loan was intended.
Condition: The University disbursed loan funds to a student who failed to make satisfactory academic progress at the end of his probationary period.
Cause: Administrative oversight and insufficient internal control.
Effect or Potential Effect: Overpayment of Title IV funds.
Questioned Costs: Below reporting threshold.
Context: For 1 of 40 students tested, the University did not appropriately assess the student’s eligibility prior to disbursing loan funds.
Identification as a Repeat Finding: There was no similar finding identified during the prior year.
Recommendation: We recommend that the University enhance its internal controls over compliance to ensure proper determination of continuous eligibility.
Views of Responsible Officials: An incorrect satisfactory academic progress tracking status was assigned to a single student, which resulted in the one student receiving federal aid for the spring semester when they should have been marked as ineligible. The spring disbursement was corrected promptly when uncovered and funds have been returned to ED. An enhanced system is now in place to more clearly track the satisfactory academic progress of students who take a leave of absence from the university and return without demonstrating satisfactory academic progress at a different school.