Dive Brief:
- Eastern Gateway Community College's students will see no further changes because the U.S. Department of Education is putting the institution on its Heightened Cash Monitoring 2 list, its president said Wednesday — even though the move restricts when the Ohio institution can receive cash from the Pell Grant program.
- Students who were enrolled in Eastern Gateway's much-touted Free College Benefit program this spring or summer, or who registered for fall classes before July 18, will still be eligible for the program, according to President Michael Geoghegan. Students enrolling for classes outside of the free college program will be able to receive Pell Grants.
- Those are the same conditions that were in place before the Department of Education on Tuesday placed Eastern Gateway on its Heightened Cash Monitoring 2, or HCM2, list. But the college, which has multiple start dates for students, is working quickly to try to redesign the program to match regulators' requirements, Geoghegan said.
Dive Insight:
The future of Eastern Gateway's Free College Benefit program has been of high interest for weeks. The institution, which operates campuses in Steubenville and Youngstown, cast the program as a last-dollar initiative based on partnerships with unions, meaning it drew down other sources of financial aid like Pell grants before covering the remaining cost of students' education.
But the Education Department in July said the program was effectively charging students who receive Pell funding more than those who don't, a violation of federal law. Geoghegan has disagreed with that evaluation, but the college responded by saying new students couldn't enroll in the program.
Then on Tuesday, the Education Department said it was putting the community college on its HCM2 list “to ensure that there is proper documentation prior to the disbursement of federal financial aid.” HCM2 cuts off an option colleges have to draw Title IV financial aid funds by requesting them upfront. Instead, they must credit students with financial aid funding from their own institutional accounts and then request reimbursement from the government later.
Such restrictions could lead to cash crunches at institutions without adequate resources. But Eastern Gateway is prepared to operate under those conditions, according to Geoghegan.
"We didn't do a drawdown until two months into spring," Geoghegan said. "What we will be doing now is just preparing rosters of these students once they're enrolled and, past the drop date, get those up to the department for reimbursement."
Eastern Gateway was in a situation where it needed the advance cash flow several years ago, Geoghegan said. He described the institution as much stronger today, with deeper cash reserves. He said the college can navigate "this challenge much easier than maybe other colleges could."
The community college currently counts 31,000 students. That's down 25% from the same point last year, according to Geoghegan. But it's still far more than the 4,808 it reported in 2015-16.
The college is continuing to work to enroll new students.
"We want to assure the students that this has no impact on them," Geoghegan said. "Even though HCM2 has no direct impact on them, if they see news stories on it, it's going to feed into their anxiety. So we want to assure the students that this does not impact them — HCM2. But the issue of the free college model does impact them."
Eastern Gateway plans to submit a proposal to restructure the free college program in hopes that it will win approval from the Education Department to soon enroll new Pell-funded students.
"The department has been very, very cooperative with us," Geoghegan said. "Even though they issued those directives, we had a very good call with them yesterday. So we're hoping that we can get through this expeditiously.”
