Finding Text
U.S. Department of Education:
Student Financial Assistance Cluster – Federal Direct Student Loans (ALN 84.268)
Federal Award Number and Year: P268K241813 (7/1/23 – 6/30/24)
Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample.
Prior Year Finding: Not applicable
Finding Type: Significant Deficiency
Criteria
In determining loan amounts for Direct Subsidized Loans, the financial aid administrator subtracts from the
COA, the EFC, and the EFA for the period of enrollment that the student (or parent on behalf of the
student) will receive from Federal, state, institutional or other sources. Direct Unsubsidized Loans, Direct
PLUS Loans, TEACH Grants, loans made by an institution to assist the student, state-sponsored loans,
private education loans, and any other non-need-based loans may be used to replace the EFC (34 CFR
685.102(b)). A financial aid administrator may use professional judgment to offer dependent-level Direct
Unsubsidized Loans (but no other Title IV aid) to a dependent student whose parents do not support the
student or who refuse to complete a FAFSA (20 USC 1087(a)).
The annual loan limits apply to the length of the institution’s academic year. Except for Direct PLUS loans
and Direct Unsubsidized Loans made to graduate or professional students, proration of the annual loan
limit is required when a program is less than an academic year as measured in either clock hours or credit
hours or number of weeks; or when a program exceeds an academic year but the remaining portion of the
program is less than an academic year in length. For the purpose of determining annual loan limits for a
borrower who received an associate or bachelor’s degree and has re-enrolled in another eligible program
for which the prior degree is a prerequisite, the grade level determination includes the number of years that
a student has completed in the previously completed program of undergraduate study.
In addition to the requirements and limits described below, awards must be coordinated among the various
programs and with other Federal and nonfederal aid (need and non-need based aid) to ensure that total aid
is not awarded in excess of the student’s financial need or cost of attendance (34 CFR 668.42, FWS, and
FSEOG, 34 CFR 673.5 and 673.6; Direct Loan, 34 CFR 685.301).
Condition and Context
The University has a process in place which exception reports are reviewed by an authorized financial aid
counselor to ensure they are completed timely and ensure students are eligible to receive Federal aid
disbursements. For the 45 selections we tested, we noted one instance where the University’s process in
place failed to identify the total aid awarded was in excess of the student’s financial need or cost of
attendance. The aid disbursed in excess of the student’s financial need or cost of attendance was $283.
The control did not operate effectively to detect the over award.
Cause
An incorrect budgetary item was utilized when calculating the student need based aid on the academic
year 2024 cost of attendance for this individual student resulting in an award amount larger than needed for
Federal unsubsidized direct loans.
Effect
Total aid in excess of the student’s financial need or cost of attendance was disbursed.
Questioned Costs
Not applicable as the finding is a significant deficiency.
Recommendation
We recommend that the University strengthen its controls in place to ensure the review is performed at a
precision to detect awarding and disbursing aid in excess of student’s financial need or cost of attendance.
Views of Responsible Official
The University agrees with the finding. The University has had a significant amount of staff turnover and
reorganization in fiscal year 2024 in the financial aid office. The Interim Director of Financial Aid is
collaborating with the Controller’s office to make sure that the University has internal controls in place over
Federal programs to assure that requirements are executed in compliance with Federal statutes, regulation
and terms and conditions of the Federal award. The University is investing in making sure that the Financial
Aid Office is staffed and creates policies and procedures that ensure that we improve internal controls over
the Eligibility and Cost of Attendance process.