Education

An Audit Report on Student Financial Aid at Four-Year Public Universities

December 2000

Report Number 01-010

Overall Conclusion

At least 775 students did not receive the full state financial aid consideration for which they were eligible due to problems at two of four audited universities. We noted problems at Southwest Texas State University (SWTSU) and Texas Woman's University (TWU) in two programs (Toward Excellence, Access, and Success [TEXAS] Grant and Texas Public Education Grant [TPEG] Emergency Loan). In addition, survey responses from other universities (responses were received from 52 percent of the universities surveyed) show that the risk of similar problems exists at universities throughout the State. In contrast, our audits at The University of Texas at Arlington (UTA) and the University of North Texas Health Science Center (UNTHSC) found adequate processes in place for state student financial aid programs.

State universities reported spending approximately $14 million in fiscal year 2000 for the TEXAS Grant program and $79 million in fiscal year 1999 for the TPEG Emergency Loan program. As state student financial aid funding increases, it will become more important to prevent problems and their impact on students.

Key Facts and Findings

SWTSU and TWU did not identify 198 qualified students (SWTSU [184] and TWU [14] for the TEXAS Grant, although their universities had $159,727 in remaining funds available. Subsequently, these funds were disbursed to students at other universities.
One university, SWTSU, charged students an interest rate exceeding the statutory limit of 5 percent for delinquent TPEG Emergency Loans, resulting in $268,113 in additional interest charged to students for fiscal years 1995 through 1999.
It is not clear if 577 students at SWTSU and an unknown number at TWU in 1999 and 2000 (reviewed in July 2000) were consistently informed of the state-mandated emergency loan deferment option, which can allow some students to continue their education. The universities lack written operating procedures to ensure that students in financial need are informed of and considered for this option.
TWU and SWTSU limited the maximum amount of an emergency loan to half of a student's tuition and fees instead of the full amount as required by statute. Even though this method allows the universities to provide emergency loans to more students, it is not in compliance with state law.

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