Finding Text
Federal Program: Student Financial Assistance Cluster, Federal Direct Loan Program Federal Agency: U.S. Department of Education Pass-Through Entity: Not applicable Assistance Listing Number: 84.268 Federal Award Year: June 30, 2022 Criteria: Title IV regulations state in no case may Federal Direct Loans awarded exceed the student's estimated costs of attendance for the period of enrollment for which the loans were intended, less (1) the student's estimated financial assistance for that period and (2) the borrower's expected family contribution for that period. Condition: For one student out of seven tested, a student was awarded two direct plus loans which caused the student's financial assistance received to be greater than the student's cost of attendance. Cause: The Organization did not award loans correctly when calculating the student's award package. Effect: The student was over-awarded $4,800 of Federal Direct Loans he or she was not eligible to receive. Questioned Costs: Questioned costs of $4,800 were noted during testing. The full population of withdraws was tested. Context: Our sample was not a statistically valid sample. Total population sampled included 32 students for $564,857 of Federal Direct Loans. Sample size was seven students for a total of $107,735 of Federal Direct Loans. Recommendation: The Organization should remit the over-awarded funds back to the Federal Direct Loan program. Additionally, the Organization should revise its procedures for awarding student financial aid to ensure that federal aid is awarded correctly and that safeguards are in place to prevent, or detect and correct, over-awarding of federal funds. Views of Responsible Official(s): Management agrees with this finding and has recognized their need for a qualified individual who is knowledgeable about financial aid requirements. The Organization has hired a new Director of Financial Aid and Student Housing who started July 1, 2022. This individual clearly understands the limitation parameter of the cost of attendance. Over-awarded funds will be remitted back to the Federal Direct Loan program.