President of Eastern Gateway: Enhanced Cash Watch 2 status ‘has no impact’ on students

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Diving brief:

  • Students at Eastern Gateway Community College will see no further change as the U.S. Department of Education places the institution on its Enhanced Cash Watch List 2, its president said Wednesday — though the move limits when the Ohio facility can receive money from the Pell Grant program. .
  • Students who were enrolled in Eastern Gateway’s Free College Benefit program this spring or summer, or who enrolled in fall classes before July 18, will still be eligible for the program, according to President Michael Geoghegan. Students who enroll in courses outside of the Free University Program will be eligible to receive Pell Grants.
  • These are the same conditions that were in place before the Ministry of Education placed tuesday Eastern Gateway on its Enhanced 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 meet regulators’ demands, Geoghegan said.

Overview of the dive:

The future of Eastern Gateway’s Free College Benefit program has been the subject of intense interest for weeks. The institution, which operates campuses in Steubenville and Youngstown, touted the program as a last-dollar initiative based on partnerships with unions, meaning it tapped into other sources of financial aid like Pell grants before covering the rest of the cost of student education.

But the Department of Education said in July that the program effectively charges students who receive Pell funding more than those who do not, a violation of federal law. Geoghegan does not agree with this assessment, but the college answered by saying new students could not enroll in the program.

Then on Tuesday, the Department of Education said it was listing the community college on its HCM2 list “to ensure there is proper documentation before federal financial aid is disbursed.” HCM2 removes an option that colleges must withdraw Title IV financial aid funds by requesting them in advance. 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 liquidity shortages in institutions without adequate resources. But Eastern Gateway is ready to operate under these conditions, according to Geoghegan.

“We didn’t do a draw for two months in the spring,” Geoghegan said. “What we’re going to do now is just prepare rosters of those students once they’re enrolled and, after the release date, send them to the department for reimbursement.”

Eastern Gateway was in a situation where it needed the cash advance several years ago, Geoghegan said. He described the institution as much stronger today, with larger cash reserves. He said the college could meet “this challenge much more easily than other colleges.”

The community college currently has 31,000 students. That’s down 25% from the same point last year, according to Geoghegan. But it’s still much more than the 4,808 he reported in 2015-16.

The college continues its efforts to enroll new students.

“We want to assure students that this has no impact on them,” Geoghegan said. “Even though HCM2 doesn’t directly impact them, if they see news reports about it, it’s going to fuel their anxiety. So we want to assure students that it doesn’t affect them – HCM2. But the issue of the free college model impacts them.”

Eastern Gateway plans to submit a proposal to restructure the free university program in hopes that it will gain Department of Education approval to enroll new Pell-funded students soon.

“The department has been very, very cooperative with us,” Geoghegan said. “Even though they issued these guidelines, we had a really good call with them yesterday, so hopefully we can get through this quickly.”

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