Eastern Gateway sues US Department of Education over restrictions on free college programs

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Diving brief:

  • Eastern Gateway Community College sued the U.S. Department of Education in federal court on Friday, alleging that regulators exceeded their legal authority, violated due process and jeopardized the institution’s future by telling it to stop offering a free university program.
  • The actions of the Ministry of Education “create certain and imminent financial losses so serious” that they threaten the operations of Eastern Gateway, according to the trialfiled in the United States District Court for the Southern District of Ohio.
  • Eastern Gateway is asking for a jury trial and a declaration that several actions of the Department of Education were illegal. Those actions include regulators sending a cease-and-desist letter telling Eastern Gateway to stop enrolling new students in its free college program, limiting how it receives federal aid dollars. and demanding a teaching agreement that, according to the lawsuit, effectively requires students to transfer to other institutions. The lawsuit also seeks damages and attorney’s fees.

Overview of the dive:

Friday’s lawsuit escalates a weeks-long battle at the intersection of free college programs, institutional financial aid practices, and regulations governing federal aid like the Pell Grant, which typically subsidizes college tuition. low income.

For seven years, Eastern Gateway, which has campuses in Steubenville and Youngstown, Ohio, has operated a free college benefits program for union-affiliated students. The community college characterizes the program as a last-dollar scholarship that pays for the remaining tuition for a student after other financial aid has been applied. The program has fueled massive growth at Eastern Gateway, which now has some 30,000 students. against about 4,800 in 2015-16.

In July, the Department of Education intervened in the program, arguing that it charges students who receive Pell funding more than it charges students who do not – a violation of federal law. Under the program, students who receive Pell grants and those who do not see their remaining bills go to zero, according to a letter the department sent Eastern Gateway. But regulators have found few scholarships from outside the college, which they say leaves the federal government footing the bills for Pell Grant recipients, even if no one is paying for other students.

Eastern Gateway disagreed with these features. But it’s suspended new enrollment in the free college program in July.

The Department of Education then placed the college on the Enhanced Cash Watch List 2. This list, known as HCM2, prevents colleges from dipping into federal financial aid funds in advance and requires them to use institutional resources to credit students with financial assistance before asking the federal government to reimburse them later.

Eastern Gateway asked the Department of Education how it could revise the program or meet federal financial aid standards, according to Friday’s lawsuit. But the department declined to respond to a proposal to overhaul the free college program, grant a regulatory appeal hearing or answer follow-up questions, the lawsuit says.

He also accused the Department of Education of requiring Eastern Gateway to enter into a teaching agreement within 30 days that would effectively require students to leave college to complete their university programs.

An Aug. 10 letter from the Department of Education, which Eastern Gateway included in its lawsuit documents, says the teaching agreement is intended to “help students if they are unable to complete their study programs.

About 30,000 students were enrolled in the Free College Benefit Program for the summer or fall terms. Access to federal financial assistance is important to Eastern Gateway, which derives 74.5% of its total revenue from Pell Grants, according to the lawsuit.

The Department for Education has not released the review of the program that led to its enforcement action, Eastern Gateway President Michael Geoghegan said in a statement.

“In order to preserve access to education for our students, we had to take this legal action,” Geoghegan said. “We are optimistic that the court will agree that there is a better and fairer way to address the concerns expressed by ED officials and help us maintain access to higher education for our students.”

The Department of Education declined to comment on the ongoing litigation.

The Eastern Gateway lawsuit argues that the college charges all students in the free tuition program the same tuition and fees, whether or not they are eligible for federal financial aid.

He adds that the Ohio Department of Higher Education approved the Last Dollar Scholarship, approving tuition waivers of up to $3,500 for in-state students and up to $6,000 for out-of-state students.

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