The U.S. Department of Education said Tuesday it is not yet ready to say whether it will seek repayment from Cheyney University of all or part of nearly $30 million in federal financial aid that apparently was mishandled.
The answer to that question is of pressing concern as the school’s finances, including the potential liability, figured into a decision in recent days by a regional accrediting body to place Cheyney, which is near Philadelphia, on probation.
Since early September, the Education Department’s office of federal student aid has conducted its own review and analysis of findings from a consultant hired by the State System of Higher Education. The consultant, after reviewing aid that flowed through the state-owned university, concluded that $29.6 million awarded between 2011 and 2014 may have to be returned.
“Being that the review process is ongoing, we are not in a position to comment further on any potential actions, including recoveries or sanctions, which may be levied in this instance,” the office said in a statement. “As is always the case, our goal is to ensure that all institutions are complying with federal financial aid regulations so that students and taxpayers are protected.”
Cheyney’s status as one of the nation’s first historically black colleges has added to the sense of urgency within the State System and beyond for finding ways to reverse Cheyney’s financial and enrollment losses.
“Those efforts must and will continue,” State System chancellor Frank Brogan said Monday, reacting to the Middle States Commission on Higher Education’s decision to place Cheyney on probation.
What is less clear is where the money would come from if the Education Department were to seek its return. Cheyney began the fiscal year with no net unrestricted assets and is operating in part on a line for credit from the system.
State System spokesman Kenn Marshall would not discuss whether the State System might be called upon to pay. “We can’t speculate,” he said. “We have to wait for the department to make a decision.”
Colleges are obliged to reconcile federal financial aid records each year. Officials have said that although that was not done properly between 2011 and 2014, an improved system now is in place.
Bill Schackner: bschackner@post-gazette.com, 412-263-1977 and on Twitter: @BschacknerPG.
First Published: December 2, 2015, 5:00 a.m.