After Nearly 15 Years, Education Dept. Revives Fines Against Two Institutions

"Earlier this year, the Education Department suddenly told officials at two universities they needed to pay up for minor infractions of federal student aid rules alleged to have occurred from 1994 to 1996. The institutions -- the University of Colorado at Boulder and Yale University -- had initially objected to the fines when, in 1998, the Education Department’s Office of Inspector General issued reports finding them at fault for going too far in exercising discretion over how it awarded federal financial aid to students," Inside Higher Ed reports. "Under federal law, college financial aid officers are permitted to use their own 'professional judgment' in determining whether special circumstances exist for a student that would entitle him or her to more federal financial aid. In 1997, the Education Department’s inspector general launched an audit into the University of Colorado’s use of 'professional judgment' for the 1994-95 and 1995-96 academic years. Those investigators issued a report in July 1998 that concluded that the university misused its discretion, and sought a repayment of funds. The university objected to the OIG report, but was informed in December 2000 that the Education Department had decided to hold off on deciding whether to impose the fines because it wanted to wait until litigation was resolved in other, similar cases. Then, in April of this year, the university received a notice from the department in which the department decided to accept the recommendation of the 1998 report and impose a fine of $305,561. ... The University of Colorado has since entered into a settlement with the Education Department to resolve the case. That settlement would require the university to pay $40,000 and is currently pending review from the Department of Justice, said Bronson R. Hilliard, a Colorado spokesman. In Yale’s case, which played out along the same timeline as Colorado's, the university settled the matter with the Education Department in August, agreeing to pay $9,288, according to a university spokesman, Thomas Conroy. ... Justin Draeger, president of the National Association of Student Financial Aid Administrators, called the delays 'outrageous' and said that his organization will be pushing for legislation that caps the amount of time the Education Department has to make a decision when it reviews an institution’s financial aid program. 'The issue is: what’s the point of a program review?' Draeger said. 'Is it to right wrongs or is it really about being punitive? If there are existing rules that are so unclear or so insufficient where the department doesn’t immediately know how to resolve them, then how would it be reasonable to hold a school responsible for knowing?' he added." 

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