Finding Text
Finding 2024-002 – Disbursements for Student Financial Assistance Cluster (Significant Deficiency)
Information on the federal program: Federal Direct Loan Program, ALN 84.268
Criteria: 34 CFR 685.303(g), Treatment of excess loan proceeds.
Condition: University awarded Subsidized Federal Direct Loans to one student in excess of their Subsidized Federal Direct Loan eligibility, and therefore did not comply with all requirements associated with excess loan proceeds.
Cause: The Student Financial Aid Department awarded a scholarship to a student which reduced the student's overall Subsidized Federal Direct Loan eligibility. The excess Subsidized Direct Loan award was not replaced with Unsubsidized Federal Direct Loans.
Effect: Errors were made during the calculations of eligible aid causing an overaward of Subsidized Federal Direct Loans.
Questioned costs: $2,931
Context: During review of the Special Tests and Provisions disbursement testing, it was noted a portion of the Subsidized Federal Direct Loan was awarded in excess of the student’s eligibility for one student. The excess funds should have been reallocated to Unsubsidized Federal Direct Loans upon the awarding of a scholarship to the student.
Identification as a repeat finding: No
Recommendation: We recommend University enhance its Student Financial Aid procedures by implementing post-scholarship eligibility checks to recalculate Subsidized Federal Direct Loan limits and automatically reallocate any excess funds to Unsubsidized Federal Direct Loans.
Views of responsible officials and planned corrective actions: Management agrees with the finding and has prepared a Corrective Action Plan. The Plan is now in place.