STEUBENVILLE – The Department of Education has dealt another blow to Eastern Gateway Community College, this time designating the college as an increased cash management tier for Pell Grants.
EGCC president Michael Geoghegan says the change will not affect the students themselves, however “It will affect the financial aid department and an adjustment in the timing of cash flows in the receipt of Pell grants.”
Schools typically submit a request for funds equal to their immediate disbursements, but a school placed in HCM2 no longer receives funds using the advanced payment method. After an HCM2 school makes disbursements to students from its own institutional funds, a reimbursement payment request for those funds must be submitted to the DOE.
Geoghegan told faculty and staff that the reclassification was a setback, but “It will not affect our ability to continue receiving Pell funding.”
“There will be some changes in the timing of our Pell cash flows, but nothing we can’t adjust to,” Geoghegan wrote. “There is no rumor that ongoing payroll and accounts payable commitments will not be met.”
Meanwhile, the head of the Department of Education’s midwest division, Jeremy Early, told Geoghegan he would not respond to questions he had sent ahead of a meeting that had been scheduled for July 27 but was canceled, and said that “The nature of many of the questions limits the response the department can provide.”
One of those questions apparently dealt with the university’s relationship with SRC, the third-party administrator that administered the Free College Benefits Program at the center of the DOE’s concerns.
The DOE has demanded that the program be redesigned to ensure it meets Title IV requirements, and in a Friday letter to Geoghegan, Early said the nature of many of the questions they had asked. “It limits the responses the Department can provide.”
“Firstly, whether or not EGCC continues its relationship with SRC is a decision for EGCC to make.” He wrote “As such, the department will not influence EGCC’s contractual relationship with SRC. Second, the department does not respond to hypothetical questions such as those raised by EGCC. If EGCC provides a specific proposal for a revised program, the department will provide its position on whether that plan is consistent with the requirements of title IV.”
The DOE states that under the Free College Benefit Program, EGCC waives tuition and fees for students who exceed Title IV funds and, for some students, a small amount of state grants. For students not receiving Title IV funds, full tuition and fees are waived.
“This results in Title IV students being charged for their educational programs and non-Title IV students not being charged, which violates Title IV requirements.” Repeat early.
“Under long-standing policy, the department has prohibited institutions from assessing fees to a student receiving aid under Title IV programs that are higher than those charged to a student not receiving such aid. The position of the department is that EGCC’s practice violates Title IV’s requirements that the tuition and fee component establishment for Title IV recipients must be an amount that “normally assesses a student with the same workload academic”.
While EGCC maintains that scholarship funds are applied to these students’ bills, Early insists “There are virtually no funds provided by any source outside of Title IV. Title IV funds essentially fund free tuition for non-Title IV students.” and said the university needs to figure out a way to provide institutional support for the program “this does not result in disparate charges between title IV recipients and non-title IV recipients.”
“As noted above, outside of this general guidance, the department will provide a determination on any specific proposal the institution wishes to submit.” He said early. “The department will quickly review any proposals that are submitted and provide a response as quickly as possible.”
Geoghegan read this as a positive, saying that DOE, “In their closing paragraphs … they acknowledged that there is disagreement on the interpretation of the ‘last dollar grant’ and gave us the opportunity to present a concrete proposal for the restructuring of the FCB within the parameters (which they have outlined)”.
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