Finding 9675 (2023-001)

Criteria: According to 34 CFR 685.203 an eligible dependent student in their first year of school can borrow up to $3,500 in Subsidized Direct Loans and $2,000 in Unsubsidized Direct Loans. Condition: During our student file testing we noted one student out of forty was disbursed the incorrect Direct Loan amount. Based on the student’s enrollment status and need this student was eligible for $926 in Subsidized Loans and $4,574 in Unsubsidized Loans; however, the College awarded the student $230 in Subsidized loans and $5,270 in Unsubsidized loans which resulted in an under award of $696 in Subsidized Loans and an over award of $696 in Unsubsidized Loans. We consider this error in awarding to be an instance of noncompliance of the Eligibility Compliance Requirement. Statistical sampling was not used when making sample selections. Questioned Costs: $0 Effect: A student was under awarded Subsidized Direct Loans in the amount of $696 and over awarded Unsubsidized Direct loans in the amount of $696. Cause: The College’s internal controls did not identify the fact that the student was under awarded Subsidized Direct Loans in the amount of $696 and over awarded Unsubsidized Direct loans in the amount of $696. Recommendation: We recommend the College closely monitor all students who receive direct loans and verify that they receive the proper amount of Subsidized and Unsubsidized Direct Loans. Views of Responsible Officials: Management agrees with this finding and response is included in Corrective Action Plan.