Pursuit's Take
OIG found that the Department did not comply with IPERA because the fiscal year (FY) 2015 improper payment rate did not meet the reduction target for the William D. Ford Federal Direct Loan Program (Direct Loan). The Department established a FY 2015 reduction target of 1.49 percent for the Direct Loan program; however, the improper payment rate for the Direct Loan program was 2.63 percent after the Department recalculated this rate to correct for the formula execution errors we identified. Therefore, the Department failed to meet one of IPERA’s six compliance requirements.
The Department’s recalculated estimated improper payments in the Direct Loan program increased more than $1 billion in FY 2015 compared to FY 2014, and its recalculated estimated improper payments in the Pell program declined almost $227 million.