LMC violates federal aid regulation

JACKSONVILLE — This spring, Lon Morris College students received their federal loan and grant refunds from the college more than 14 days after the college received them, which violates a regulation set by the U.S. Department of Education, Lon Morris officials confirmed.

After being awarded Federal Direct Loans and Federal Pell Grants, students’ funds are sent to the college. The college then deducts students’ tuition and fees and room and board, if applicable, from the amount awarded and issues checks to the students, refunding him or her for the remaining amount.

According to the 2010-2011 Federal Student Aid Handbook, all colleges “must disburse a FSA credit balance to a student within 14 days of the date it was created or within 14 days of the first day of class.”

“The rule and regulation, I believe, is 14 days upon receiving the money. We try to adhere to that but to be honest one of the challenges has been we did not have the computer system in place to appropriately process 1,100 students,” said Lon Morris President Dr. Miles McCall in an interview with the Daily Progress on May 6.

Sara Gast, spokesperson for the U.S. Department of Education, said there are no provisions to the regulation that would allow a college to issue refunds after 14 days of receiving the funds.

“There’s no loops around that rule,” Gast said. “Fourteen days is the rule.”

According to a letter from the U.S. Department of Education issued Feb.10, Freshman Adrian Darkins’ Direct Loans were slated for disbursal on Feb. 14 and March 7, but as of April 15, Darkins said, he hadn’t received anything.

“They tell us the system shut down because then they couldn’t pay the teachers,” Darkins said April 15.

Each time Darkins asked administrators when his refund would be issued, he said, he was told a different date.

“They told us after Spring Break and then they told us the first week of April,” Darkins said. “We’ve haven’t heard anything.”

All refunds were issued by May 5, Lon Morris officials said, but for students like Darkins, not having their refunds during the spring semester proved difficult.

“I got a zero balance (for my bank account). I got no money,” Freshman Chris Emere told the Daily Progress April 15. “We’re struggling.”

According to Emere’s balance statement from Lon Morris, issued April 15, the college received his Federal Pell Grant and Federal Direct Loans between Feb. 11 and March 10, but still owed him a refund check of $1,800.

After Lon Morris was unable to pay its 167 employees on time this semester, administrators had a meeting with the faculty and staff to discuss the college’s financial troubles.

Emere said he would like the same courtesy.

“They’re not even explaining to us what’s happening,” he said. “There’s an internal problem going on and they’re not telling us.”

Tommy Ferguson, vice president of business and administration at Lon Morris, confirmed that the college did not conduct a meeting to inform students about the difficulties the college was having processing refunds.

Increasing the student body from 300 to more than 1,000 over two years has created shortfalls, McCall said.

“Because our systems, whether we’re talking about our computer systems, the number of beds we have for dorms, the number of security guards we have trained, to the number of computer stations we have, to the number of tutors we have for students who have remedial issues, we just outgrew ourselves,” he said.

In the spring semester, only a few students were issued their refunds more than 14 days after the FSA credit was received, Ferguson said.

“This is not too uncommon and usually it’s because their invoices are not in order. They may have fines that are coming in. They may have other charges,” Ferguson said. “We have to make sure those invoices are correct before we issue a check because if we don’t get the money before we issue the check, then we’re likely not to get it.”

According to the 2010-2011 Federal Student Aid Handbook, college must obtain authorization from a student or parent burrower to use FSA funds to pay for allowable charges other than tuition, fees and room and board.

Lon Morris officials also said some refunds have still not been issued due to incomplete applications for federal student aid.

In order for federal loans and grants to be awarded and then sent to the student’s institution, the U.S. Department of Education has processed the student’s Free Application for Federal Student Aid (FAFSA). Incomplete FAFSAs cannot be processed.

For violating the Federal Student Aid Handbook regulation, Lon Morris may receive a fine or lose program eligibility, depending on the number of violations, Gast said.

Before a college can be penalized, the U.S. Department of Education conducts a program view, which may include “questioning the school’s administrative capability to administer the Title IV programs at their institution,” Gast said.

If a program review is not yet completed, Gast said, the U.S. Department of Education cannot talk about it.

“When an investigation is ongoing we can’t confirm or deny anything,” Gast said.

Gast went as far as to say that a program review had not been completed.

Ferguson said Wednesday the U.S. Department of Education was not conducting a program review of Lon Morris.

Students who don’t receive their refunds within 14 days after the college has received their federal aid may log a complaint with the U.S. Department of Education, Gast said.

“If the students have tried to resolve this with the school and have failed to do so, they can contact our ombudsman’s office to resolve the complaint,” she said.

To learn more, visit ombudsman.ed.gov.

Local News

Search Results

Discussion

Site Map

Contact Us