STEUBENVILLE — The Department of Education has dealt another blow to Eastern Gateway Community College, this time by designating the college as Heightened Cash Management Level 2 status for Pell Grants.

EGCC President Michael Geoghegan says the change won’t affect students themselves, though it “will impact the financial aid department and an adjustment in timing of cash flows in receipt of Pell grants.”

Typically, schools submit a request for funds equal to their immediate disbursements, but a school placed on HCM2 no longer receives funds under the advance payment method: After a school on HCM2 makes disbursements to students from its own institutional funds, a reimbursement payment request must be submitted for those funds to DOE.

Geoghegan told faculty and staff the reclassification was a setback, but, “It will not affect our ability to continue to receive Pell funding.”

“There will be some changes in the timing of our cash flows from Pell but nothing we cannot adjust to,” Geoghegan wrote. “There is no truth to any rumor that ongoing commitments to payroll and payables will not be met.”

Meanwhile, Department of Education Midwest Division Chief Jeremy Early told Geoghegan he won’t be replying to the questions he’d submitted ahead of a meeting that had been scheduled for July 27 but canceled, saying the “nature of many of the questions limits the response the department can provide.”

One of those questions apparently dealt with the college’s relationship with SRC, the third-party servicer that administered the Free College Benefit’s Program at the heart of DOE’s concerns.

DOE has demanded the program be redesigned to ensure it complies with Title IV requirements, and in an Friday letter to Geoghegan, Early said the nature of many of the questions they’d asked “limits the responses the Department can provide.”

“First, whether or not EGCC remains in its relationship with SRC is a decision that EGCC must make,” he wrote. “As such, the department will not weigh in on EGCC’s contractual relationship with SRC. Second, the department does not respond to hypothetical questions like those posed by EGCC. If EGCC provides a concrete proposal for a revised program, the department will provide its position as to whether that plan is consistent with Title IV requirements.”

DOE contends that under the Free College Benefit Program, EGCC waives tuition and fees for students that are in excess of Title IV funds and, for some students, a small amount of state grants. For students not receiving Title IV funds, the entire tuition and fees are waived.

“This results in Title IV students being charged for their educational programs and non-Title IV students not being charged, which violates Title IV requirements,” Early reiterated.

“Under longstanding policy, the department has prohibited institutions from assessing charges to a student receiving aid under the Title IV programs that are greater than what is charged to a student not receiving such aid. It is the department’s position that EGCC’s practice violates the Title IV requirements that the establishment of the tuition and fee component for Title IV recipients must be an amount that is ‘normally assessed a student carrying the same academic workload.'”

While EGCC maintains scholarship funds are applied to those students’ bills, Early insists “there are virtually no funds being provided by any sources outside of Title IV. Title IV funds are essentially funding the free tuition for non-Title IV students” and said the college needs to figure out a way to provide institutional aid for the program “that does not result in disparate charges between Title IV recipients and non-Title IV recipients.”

“As noted above, outside of this general guidance, the department will provide a determination on any concrete proposals the institution wishes to submit,” Early said. “The department will promptly review any proposals that are submitted and will provide a response as expeditiously as possible.”

Geoghegan read that as a positive, saying that DOE, “in their closing paragraphs … did recognize that there is a disagreement on the interpretation of ‘last dollar scholarship’ and provided an opportunity for us to submit a concrete proposal for restructuring of the FCB within the parameters (they’ve outlined).”

He said they planned to submit a proposal Wednesday.