Finding Text
Ensign College
Schedule of Findings and Questioned Costs
For the year ended December 31, 2024
Section III – Federal Award Findings and Questioned
Finding 2024-002 – Non-Compliance with Financial Need Requirements for Subsidized Direct Loans
Grantor: U.S. Department of Education
Program: Student Financial Assistance Cluster
Assistance Listing #: 84.268
Title: Federal Direct Student Loan Program
Award Years: 7/2023 – 6/2025
Criteria
34 CFR Section 685.203 (j)(1-2):
(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.
Condition
Of the population of students who were awarded and received federal student financial assistance during the fiscal year, 60 students were selected for eligibility testing totaling $65,827 in direct loan funding. Of the 60 students selected, two instances were noted in which students were awarded a subsidized direct loan totaling $5,088 in excess of their estimated need. These instances occurred in the Winter and Spring 2024 semesters.
Cause
The two instances pertain to an error in the University’s student information system, PeopleSoft. As a result of a system update, PeopleSoft inaccurately input the estimated family contribution (EFC) as zero for direct loan recipients during the Winter and Spring 2024 semesters, rather than inputting the correct EFC for the students’ period of enrollment. This resulted in these students receiving a subsidized direct loan
they would not otherwise have been eligible to receive.
Effect
Awarding subsidized direct loans to students without financial need resulted in disbursement of needbased federal aid to ineligible students.
Questioned Costs
$5,088
Recommendation
We recommend that the University update their student information system configuration to appropriately pull the EFC for each student to ensure federal student financial assistance is awarded to eligible students.
Management’s Views and Corrective Action Plan:
Management’s response is reported in management’s views and corrective action plan included at the end of this report.