Finding 513129 (2024-001)

Finding 2024-001: Eligibility – Determining Federal Direct Student Loan Awards Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $20,593,109 Questioned Costs: $119,443 Criteria: Per 34 CFR 685.203(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 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 Federal Direct Unsubsidized Loan Program for any academic year of student may not exceed the following: in the case of a graduate or professional student, $12,000. Condition: During testing of eligibility, six out six students selected for testing within the Doctor of Naturopathic Program were overawarded Federal Direct Unsubsidized Loans, noting this encompasses all students within the program. Eligibility testing was performed over 40 other students with no exceptions. We determined that UWS improperly awarded 6 out of 6 students Federal Direct Unsubsidized Loans in excess of the maximum amount for one academic year of $20,500. The total overawards accumulated to $119,443 in total loan funds. Cause: The students were awarded the higher annual Federal Direct Unsubsidized Loan limits for certain graduate and professional health professions students. Schools may award the increased unsubsidized amounts to students who are enrolled at least half time in certain health professions programs. The programs must be accredited by specific accrediting agencies for students to qualify for additional unsubsidized loan amounts. The UWS Naturopathic Medicine Doctoral program has not yet achieved the required accreditation from The Council on Naturopathic Medical Education. Effect: UWS is required to return overawarded funds to the Department of Education in accordance with Department guidelines. Noncompliance with federal guidelines could impact future funding. Questioned Costs: $119,443 Context: Six out six students subject to eligibility testing within the Doctor of Naturopathic Medicine program were overawarded Federal Direct Unsubsidized Loans in excess of the maximum allowed amount of $20,500 for an academic period. Eligibility testing was performed over forty other students with no errors. Management detected the overaward subsequent to year-end, but prior to the start of the audit and informed RSM of the error. Repeat Finding: No. Recommendation: We recommend UWS strengthen internal controls around the establishing of financial aid award limits. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.