August 9, 2022
The U.S. Department of Education put new restrictions on Eastern Gateway Community College’s ability to receive federal funding, it said Tuesday, ramping up oversight of the Ohio institution’s finances after a public dispute broke out over a free college program.
Eastern Gateway is now on the on the Heightened Cash Monitoring 2 list, also known as HCM2. Institutions on that list can no longer receive Title IV student financial aid funds by requesting them upfront from the Education Department before disbursing them. Instead, they must front federal financial aid disbursements from their own institutional accounts and then request reimbursement from the government.
The Education Department placed Eastern Gateway on HCM2 “to ensure that there is proper documentation prior to the disbursement of federal financial aid,” according to a statement. An Eastern Gateway spokesperson did not immediately respond to a request for comment Tuesday afternoon.
In July, the Education Department and Eastern Gateway publicly disagreed about a much-touted free college program at the institution. Eastern Gateway called the program a last-dollar initiative built on partnerships with unions, but federal regulators suggested it charged the government for students receiving Pell Grants while not charging non-Pell students.
Last-dollar programs tap other sources of financial aid, then pay remaining parts of students’ educational costs. Federal Pell Grants go to students who demonstrate a high level of financial need.
In a letter, the Education Department alleged students who received Pell Grants and state financial aid funding had that money applied to their bills, then remaining charges were zeroed out by scholarships. Students who didn’t receive public financial aid also had their balances cut to zero. But the department said outside entities actually provided little scholarship funding, in contrast to how the college said the program operated.