Avoid These 6 Compliance Mistakes in Financial Aid 

When it comes to Title IV compliance, most mistakes aren’t malicious, they’re mundane.  A missed file, a policy that was never updated, or a website link that points to last year’s SAP criteria can all trigger findings during an annual audit. At FAS, we’ve seen how small missteps can turn into major risks, especially when staffing is a challenge or internal processes haven’t been reviewed in months. The good news? Most of these pitfalls are entirely preventable. 

Below are the most common (and costly) compliance mistakes, ranked by frequency in federal audits and program reviews—and what your team can do to avoid them. These insights are based on recurring findings documented in the U.S. Department of Education’s FY 2022 Top Findings Companion Report, which highlights R2T4, verification, SAP, and consumer information as common areas of noncompliance.

Return to Title IV (R2T4) Files Missing or Incomplete

• Why it matters: R2T4 consistently ranks as one of the most frequent Title IV audit findings.
• Common Misstep: Withdrawal dates aren’t accurately recorded, or R2T4 calculations are missing from the student file.
• What to do: Build a workflow that flags withdrawals in real time and ensure completed R2T4 files are stored and reviewable.

Unverified ISIR Data Leading to Premature Disbursement

• Why it matters: Disbursing aid with unresolved conflicting information is a major compliance violation.
• Common Misstep: ISIRs contain missing or conflicting data, but funds are still disbursed before resolution.
• What to do: Integrate ISIR checks into your disbursement process. Create guardrails that prevent aid from being released until eligibility is verified.

Missing or Misfiled Verification Documentation

• Why it matters: Incomplete or lost verification records put aid disbursement into question and are a frequent audit issue.
• Common Misstep: Verification documentation is inconsistent, paper-based, or missing from digital systems.
• What to do: Use a centralized, auditable tracking system and review files regularly to ensure completion and retention.

Inconsistent Application of SAP Policies

• Why it matters: Failure to apply Satisfactory Academic Progress policies uniformly can result in findings and equity concerns.
• Common Misstep: Different staff use different timelines or documentation standards for SAP reviews.
• What to do: Train staff on SAP application annually and standardize documentation templates for appeals and status changes.

Outdated Consumer Information on Public Websites

• Why it matters: Website disclosures are a compliance requirement and among the easiest for auditors to spot.
• Common Misstep: Cost of attendance or SAP info is outdated, or links are broken or missing.
• What to do: Set a quarterly review cadence to check for accuracy across all public-facing pages. 

Want to take this a step further? Explore how cross-campus partnerships impact compliance. The strongest institutions align their communication, policy ownership, and timing across departments—not just within the aid office.

Policy & Procedure Manuals That Don’t Reflect Current Practice

• Why it matters: Auditors compare written policy to actual execution—and gaps are flagged quickly.
• Common Misstep: Manuals haven’t been updated after staffing changes, regulatory shifts, or system transitions.
• What to do: Review your policies annually and document updates to show continuous improvement. 

Pro Tip: Build your compliance habits around the timing that matters most. The riskiest audit findings often happen after aid is disbursed—when schools shift from packaging to proving. Read more in The Compliance Window: Higher Ed’s Most Overlooked Audit Risk.

Mistake to Watch For: Treating Compliance Like a Once-a-Year Event

The institutions that perform best in audits aren’t perfect—they’re prepared. They’ve built compliance into the daily rhythm of their financial aid operations, not just the months before a program review. Compliance isn’t just a requirement. It’s a system of trust. And the more intentional your team is about building that trust, the fewer surprises you’ll face during a review. 

Ready to Take Action?

No matter where your team and institution is in the compliance journey, FAS can help you turn compliance from a risk into a rhythm. Connect with a consultant to assess your biggest compliance vulnerabilities, and how to get ahead of them.