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Financial aid error costs Metropolitan State $1 million
The $1.1 million error in financial aid for students at a Minnesota university has other schools taking note of accuracy efforts before distributing government funds.
In early July, Metropolitan State University was notified by the U. S. Department of Education that it had awarded financial aid to approximately 400 ineligible students between 1999 and 2002. The students were either not earning satisfactory grades or had dropped out of classes altogether.
Since the school did not catch the errors before funds were distributed, it now must repay the $933,445 it awarded and $205,000 in fines, all of which goes to the Education Department. Investigators from the Education Department gave the university 45 days to repay the funds.
Thomas Cook, executive assistant to the school's president, said it is fair to say that bad decisions or mistaken judgments were made. Jim Cleaveland, the school's financial aid director, was placed on paid administrative leave.
Dan Mann, director of financial aid at SIUC, said mistakes of this magnitude do not happen at SIUC.
"It's a federal regulation that universities have satisfactory progress policies that students follow to stay eligible for aid," Mann said. "The financial aid office has to stay on top of things."
He explained the main step in processing need-based financial aid awards.
"The FAFSA [Federal Application for Financial Student Aid] determines what aid a student is eligible for," Mann said. "It must be filled out and evaluated before a student can get any aid through the school."
The financial aid system at SIUC has a number of fail-safes. The system keeps up with students' grade progress and students staying enrolled in a minimum number of credit hours.
"Once a week, we run reports that tell us if a student has changed the number of hours enrolled or withdrawn altogether," Mann said. "We also run satisfactory progress reports at the end of spring semester and warning letters go out in December if a student needs to make significant improvements the following spring."
If a student owes part or all of a financial aid award due to withdrawal or non-compliance with satisfactory progress policies, the student is allowed two weeks to repay the University. Mann said performing refund calculations in a timely manner keeps students and the financial aid office aware of funds that should be coming back to the school.
"For students that withdraw, it's almost never a surprise," Mann said. "When they withdraw at the Transitional Services Office they are told at that time they may have to repay some of their financial aid, depending on how much of the term is left."
Mann said that to avoid errors in financial aid awards, it is crucial that staff stay informed about federal regulations and updates.
"You have to have professional office staff who are well trained," Mann said. "Your staff has to participate in the training offered at the federal and state levels. The government has hundreds of regulations to follow, but we have a fiduciary duty to keep up with them."
In a statement issued by the Education Department, investigators wrote that in failing to catch the multitude of errors, eligible students are deprived of aid and expenses are increased for the Department.
Metropolitan State has not decided if it will try to recover the funds from the students. Cook said the students have not been contacted.
"Each incident like this has to be reviewed on a case-by-case basis," Mann said. "If this is a case where the students were not informed and the school is at fault, the school should be held responsible in the end."
