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Failure is an option in federal financial aid

Saturday, July 27, 2013 6:29 PM
Last updated 7:26 PM
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A potentially costly loophole in Pell Grant funding is creating a system at colleges and universities where taxpayers pay students thousands of federal dollars to fail courses, possibly more than once.

Instead of students filing a late withdrawal and having to repay all or part of their federal financial aid, Pell Grant rules allow an alternative course of action: fail on purpose and avoid reimbursing the government for flunked courses, which at Augusta Tech­nical College and Geor­gia Re­gents University costs between $300 and $590 per class.

The two schools have successfully put policies into place in recent years to prevent dropout scams and online fraud rings. The Pell scheme is one administrators know exists, but they are not certain how to track or stop.

Through preventative measures, which include stricter attendance policies, harsher penalties and tougher eligibility requirements, GRU has reduced warnings and academic probations issued to Pell recipients by 60 percent since 2011, according to data provided to The Augusta Chronicle.

At Augusta Tech, the 72 percent success rate among Pell recipients nearly matched all course enrollment, 75 percent, in 2011, according to an annual school report.

However, in 2012, 71 percent of the 1,805 courses failed at Augusta Tech were by Pell recipients. So far in 2013, GRU has issued 211 warnings and placed 209 Pell students on probation for failing to make satisfactory academic progress, which under federal standards is a GPA of a C or better.

The fall semester, GRU records show, produces 30 percent more warnings and probations than the spring.

“We are proud that our failed enrollment is reducing – that just makes a better graduate,” Augusta Tech President Terry Elam said. “However, we continue to identify and monitor key student achievement gaps and barriers to student success.”

Elam said Augusta Tech strengthened its attendance policy to allow educators to withdraw a student from a course after midterm and automatically give them an F if they miss 10 percent of class time.

“We want to create an environment where our students know they can succeed,” Elam said. “Because in most of our programs you cannot graduate with a grade point average below a 2.0.”

Cynthia Parks, GRU’s financial aid director, said she “can’t speak” to whether faculty or staff have ever observed a student fail a course on purpose to avoid having to repay money for a class withdrawal.

Officials with the U.S. De­part­ment of Education deferred comment to federal handbooks governing the fund. Under Pell guidelines, a student must make satisfactory academic progress to be eligible for funds, and each school must have a “reasonable policy for monitoring that progress.” Students at GRU and Augusta Tech must have a 2.0 GPA – its equivalent of at least a C.

If the GPA drops below a 2.0, a student could be given a warning and eventually be put on academic probation and go through an appeals process to have the Pell money reinstated.

Until recently, the number of GRU students failing to meet satisfactory progress had risen steadily, from 390 warnings and probation placements in 2008 to 1,117 in 2011. Sanctions fell to 908 in 2012.

Parks said it is possible that a student has had to repay funds because of a change in eligibility status, but GRU does not keep data on how much money has been refunded.

Signed into law in 1965 to help military families and low-income students, Pell Grants are now so broad that 54 percent of GRU undergraduates and 63 percent of Augusta Tech undergraduates benefit. In the 2012-13 school year, 7,702 students cashed in more than $18.5 million in Pell money at GRU and Augusta Tech.

Elam, who said only a student knows the true reasons for their failures, has seen how scams against the U.S. government can distract local education.

Last month, Augusta Tech discontinued its federal direct loan program after more than 200 students received loans, dropped out of school and took the money with them – leaving the college responsible for repaying $733,000 to the federal government and the state.

Since 2001, the Education De­part­ment has accumulated more than $1.1 billion in defaulted student loans from students, known as “Pell runners,” who collected $829 million in Pell Grants with no intention to use the money for school.

“The ones we are concerned about the most are those who leave and take the money with them and leave Augusta Tech to cover the costs,” Elam said.

A new federal regulation limits the amount of Pell money a student can receive if they fail. The fund’s “lifetime eligibility” is limited to 600 percent, which equates to six years of full Pell use.

Comments (16) Add comment
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KSL
118664
Points
KSL 07/28/13 - 05:38 am
5
1
Our government at work

Our government at work

Where is specsta complaining about "corporate welfare?"

corgimom
26084
Points
corgimom 07/28/13 - 05:36 am
5
0
I was so thrilled to receive

I was so thrilled to receive a Pell Grant and to be able to finish college, I worked like crazy. Even with an infant, I made the Dean's List.

Things sure have changed.

KSL
118664
Points
KSL 07/28/13 - 05:44 am
1
0
Corgi

You know I have read your posts since 2007. You really have had a rough life. But you have done well. You live in Charlotte, near South Park. That is almost heaven. Does that offer to bail us out still stand?

wordwright
134
Points
wordwright 07/28/13 - 09:26 am
2
2
misspelled word

Please take this as constructive criticism. And, please, no snarky comments about the reporter--I'm sure that no one here can say that they have never misspelled a word or used a word that is found commonly in speech but that does not really exist. There is no such word as preventative...sorry, it is one of my pet peeves.

avidreader
2933
Points
avidreader 07/28/13 - 09:56 am
5
0
Question!!

Why does the Pell Grant go directly to the recipient? Why not allow the college or university to distribute the money as needed? This would solve the problem with Pell Runnners. I know that Pell Grants allow some living expenses, but tuition costs can definitely be controlled and save a lot of money if the student is dropped at mid-term. At this point, the student is liable for repayment. If a student owes the government money, then this person can never receive a tax refund until the debt is paid. Sounds fairly simple to me.

JRC2024
7727
Points
JRC2024 07/28/13 - 10:10 am
4
0
avid, i thought the same

avid, i thought the same thing. Never let the student have the tuition money in hand or send it in script with the students name on it to be turned in for classes and then the school sends for real money.

avidreader
2933
Points
avidreader 07/28/13 - 10:16 am
0
2
Merriam Webster . . .

does note preventative as a noun or adjective, but other dictionaries refer to it as a colloquial expression to substitute for preventive. But, I agree with wordwright as to its use.

fatboyhog
1783
Points
fatboyhog 07/28/13 - 11:04 am
2
0
Simple solution

The government can send the money directly to the school. Any unused money can be sent back to the government at the end of each semester. There should never be money "going back" to the student. If one really wants to attend college, they will be grateful for any amount if help. If one really wants an education, they will find a way to pay for it. The amount of waste, fraud, and abuse by any government giveaway makes me ill. Help those who need it, but close the loopholes that cause the misuse. I'd be willing to bet if PELL grants were considered as taxable income, fraud would go down.

Prof P
5
Points
Prof P 07/28/13 - 12:31 pm
1
0
Financial aid

At my college, pell is used first for tuition, then student loans. There are so many opportunities for scholarships but I find most of my students don't look for them.

Sweet son
9526
Points
Sweet son 07/28/13 - 02:03 pm
2
0
@wordwright

Get Sean's email address and send him a note if you find an error such as the one you mentioned. He will be happy to straighten it out. Just let him have his weekends because he works hard all week most of the time because of us who like to comment. :)

Bizkit
28155
Points
Bizkit 07/28/13 - 02:40 pm
1
0
I'd like to see the

I'd like to see the statistics on the largest recipient in the area-Paine College. My friend there is in one discipline but states probably 80-90% of the students fail their courses-many taking the course 3-4 times to finally pass. I wonder what kind of GPA that would generate?

Bizkit
28155
Points
Bizkit 07/28/13 - 08:44 pm
0
0
Student loan default rates

Student loan default rates have skyrocketed in recent years. For 2011 the default rate for the first year is 9.1% and three years 13.4%. Interestingly the national default rate was 8.8% for 2009 while
Paine College default rate for 2009 was 18.3%. The default rate is highest for blacks which is 2-4 times that of whites (depending on year) and 8X that of Asians. Hispanics have relatively low rates.

pantherluvcik
628
Points
pantherluvcik 07/29/13 - 07:31 am
1
0
I wonder why someone has to

I wonder why someone has to make a point to always make every story on this site a matter concerning race? This was about the Pell Grant and now we're into default rates on student loans by race and Paine College. Well Bizkit I attended Paine College and I repayed my student loans early. Thanks

mrenee2003
2934
Points
mrenee2003 07/29/13 - 07:58 am
0
0
pantherluvcik

Great point. If you read through their comments on other pages, they refer to people who make everything about race as "race hustlers." However, I doubt they see themselves in that light.

Bizkit
28155
Points
Bizkit 07/29/13 - 08:21 am
0
0
That's not a point but

That's not a point but anecdotal evidence. But good for you, you paid your loans early. However the data indicates a higher percentage don't at that school. It isn't about race but about Paine breaking federal laws of all sorts of which it has done nothing the last year to fix. The school is headed to lose it's SACS accreditation. I would hope you would be concerned rather than defensive. A school with a 25% default rate lost eligibility to all federal aid-that would kill the school. I don't have a problem with the school just the administration that has fired everyone involved with their problems yet the problems persist. Seems they fired the wrong people. Personally I don't believe in "race" (I've said so repeatedly). I just don't like criminal activity regardless of ethnicity (and I know for a fact with impunity they have broken the law). Go to the SACS site and they will give you a list of their problems. I didn't bring up race on this site-Dems and the media has "race" a central point. Which just demonstrates the ignorance and anti-science of Dems like they accuse of Rep. Personally I don't like either party either. So don't think it's about ethnicity or politics. It is about right and wrong-and why do some people defend wrong. Like you seemed defensive rather than shocked and wanting to fix it. Yes there are race hustlers and it has to do with Zimmerman-Martin case which has dominated everything. Sad, Sad, Sad. Yeah I know a race hustler when I read one too.

lifelongresident
1317
Points
lifelongresident 07/29/13 - 10:08 am
0
0
example of an appeal at augusta tech
Unpublished

"i's be so sorry bout missin da class fo sho cause mah baby was sick, i really wont to do da class and lean mah num-bahs and let-tahs so i's can reed and rite real good fo sho, its jess mah baby were sick so i aint not had no baby sit-tah dats why i mssed so much time, cause i reely wont to learn how to do hair and nails cuase i hnos a lots of pee-po who i can do to makes lots uh mun-nay"...so the reinstante the pell grant and "la-quanda" gits her "beauty school diploma"

mrenee2003
2934
Points
mrenee2003 07/29/13 - 01:29 pm
0
0
Default

The stats you cite are from 1993 so who knows what they are 20 years later. Anyway, the default rate for the University of Phoenix was 26.2% for 2009, with over 49,000 students in default in 2009. They are being investigated for irregularities; moreover, these for-profit schools engage is some pretty unethical tactics (e.g., hiring PI's to find students and encourage them to apply for extensions so that their default rates go down). In fact, it's the for-profit schools that are the much bigger problem. The degrees at Phoenix, DeVry, Kaplan, etc. are worthless and most people end up in very low-paying jobs (if they get a job at all) that barely cover living expenses let alone student loan repayments. In fact, 514 schools have higher default rates than graduation rates. Students should examine graduation rates and default rates before choosing a school. As well, the job rate after graduation. Rather than focus on the race of the student defaulting, it would make better sense to focus on the default rate of each school. Any school with a higher default rate than graduation rate should not be allowed to have students with government financial aid.

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