Finding Text
2022-002 U.S. Department of Education Student Financial Assistance Program Cluster Federal Supplemental Educational Opportunity Grants (FSEOG) (Federal Assistance Listing Number 84.007) Federal Direct Student Loan Program (FDL) (Federal Assistance Listing Number 84.268) Federal Award Year: 2021-2022 Finding: Students were under awarded and disbursed FDL funds and under awarded and disbursed FSEOG funds. This is a repeat finding of 2021-006. Criteria: Per 34 CFR 676.16 Payment of an FSEOG (a) (1) Except as provided in paragraphs (b) and (e) of this section, an institution shall pay in each payment period a portion of an FSEOG awarded for a full academic year. (2) The institution shall determine the amount paid each payment period by the following fraction: FSEOG/N where: FSEOG = the total FSEOG awarded for an academic year and N = the number of payment periods that the institution expects the student will attend in that year. (3) An institution may pay the student, within each payment period, at such times and in such amounts as it determines best meets the student's needs. (b) If a student incurs uneven cost or estimated financial assistance amounts during an academic year and needs additional funds in a particular payment period, the institution may pay FSEOG funds to the student for those uneven costs. (c) An institution shall disburse funds to a student or the student's account in accordance with the provisions in ? 668.164. Per 34 CFR 685.200(a)(2) A Direct Subsidized Loan borrower must demonstrate financial need in accordance with title IV, part F of the Act. Per 34 CFR 685.203(a)(3) In the case of an undergraduate student who has successfully completed the first and second years of a program of study of undergraduate education but has not successfully completed the remainder of the program, the total amount the student may borrow for any academic year of study under the Direct Subsidized Loan Program may not exceed the following: (i) $5,550 for a program of study of at least an academic year in length. Condition: A student was awarded and disbursed $262.50 FSEOG funds for the spring term but was eligible for $350 FSEOG funds. Another student was awarded $0 direct subsidized loans and $7,500 direct unsubsidized loans but was eligible for $370 direct subsidized loans and $7,130 direct unsubsidized loans. Another student was awarded $4,500 direct subsidized loans and $2,000 direct unsubsidized loans but was eligible for $5,500 direct subsidized loans and $2,000 direct unsubsidized loans. Cause: For one student, the FSEOG award for spring was incorrectly calculated. A student received $175 of FSEOG funds for the fall term and $262.50 of FSEOG funds in spring term; however, the student was enrolled full-time and should have been awarded $350 of FSEOG funds in spring term based on the University?s FSEOG awarding policies. For another student, the FDL award for both fall and spring was incorrectly calculated. The student enrolled in additional credits prior to starting the fall term and the student?s award was not properly updated. The student enrolled in additional classes, which caused her to have a financial need of $370, however was not awarded or disbursed and federal direct subsidized loans to meet this need. She should have been awarded an additional $370 of direct subsidized loans for the year and her direct unsubsidized loans should have been reduced by $370. For another student, the FDL award for both fall and spring was incorrectly calculated. The student had earned 61 credit hours, and by the University's policy was a 3rd year student, and should have been awarded federal aid accordingly. However, the student was awarded as being a second year student. She should have been awarded an additional $1,000 of direct subsidized loans for the year. Effect: Noncompliance with federal regulations for FSEOG and FDL programs. Context: One of eleven students tested with FSEOG awards. One of forty students tested with FDL awards. Questioned costs: Under award of $87.50 of FSEOG funds, under award of $1,370 direct subsidized loans and over award of $370 direct unsubsidized loans. Recommendation: Management should review its awarding policies and controls to verify awarding of FSEOG and FDL funds are in compliance with the University?s awarding policy and federal regulations.