The University of Southern California may have to return thousands in federal financial aid that the Education Department Office of the Inspector General said was improperly awarded to students.
The Office of the Inspector General recommended in a new report that Federal Student Aid require USC to return the money, review its student records and make other changes after an audit found the university didn’t follow federal law when applying “professional judgment.” That authority is outlined in a federal law that allows financial aid administrators to make case-by-case adjustments to a student’s financial aid in light of special circumstances. Administrators can make cost-of-living adjustments, for instance, and adjust a family’s income.
The inspector general’s office calculated that the university might have disbursed as much as $68,343 more in federal financial aid than students would’ve received without a professional judgment. The auditors couldn’t determine that exact figure of aid because of how the university tracks professional judgment adjustments, per the final report.
USC disagreed with the inspector general’s findings and recommendations. In a response included with the report, university officials argued that the inspector general was applying a higher standard than what federal law requires for applying and documenting professional judgment.
“Financial aid administrators need flexibility to consider a cost-of-living allowance because living in a high-cost area of the country could have had a significant effect on a family’s ability to make contributions toward the student’s educational costs,” officials wrote. “Families generally do not know what specific professional judgment categories to request; they simply know that they cannot afford to pay the cost of their student’s education based on their current expected family contribution.”
This was the third in a series of audits looking at professional judgment. The Office of Inspector General doesn’t generally disclose why it selects a university to audit.
The inspector general’s office recommended that USC review its records for the 6,062 students who received a professional judgment during the 2019–20 and 2020–21 academic years, identify how much federal financial award was improperly disbursed, and return that money. USC said reviewing those records would be overly burdensome.
The inspector general’s office responded that a review was necessary because of the “high error rates for the students included in our samples.”