The U.S. Department of Education is limiting access to student-aid funds at a campus of Corinthian Colleges Inc. in San Jose, Calif., company officials have said. The restrictions on government aid, which began in December, were imposed at one of the company’s Bryman Colleges after the agency found that the institution was not complying with federal procedures on financial aid.
The company said it fired two of Bryman’s financial-aid officers who had “failed to comply with the company’s own policies” and the policies of the Education Department, said a spokeswoman, Cecilia Wilkinson. In a statement, Corinthian said it had taken other corrective action as well but did not elaborate.
Jane Glickman, a spokeswoman for the Education Department, said that a “program review” at Bryman by the department’s Office of Federal Student Aid had turned up “significant findings of noncompliance in the school’s administration of Title IV funds.” Title IV is the section of the Higher Education Act that governs student aid.
According to the spokeswomen, the program review found inconsistencies and discrepancies between information that students filed on their financial-aid applications about their financial need and information that appeared in supporting documents, such as their tax returns. It was on the basis of those discoveries, Ms. Glickman said, that the department put the college on “reimbursement status.”
The action affects the flow of Pell Grant funds and money from other programs for which the government is the source of aid. Under the standard practice, a college can receive such funds from the government in advance, based on the college’s calculations of students’ financial-aid eligibility. Under reimbursement status, however, Bryman receives that money only after the Education Department has certified the eligibility and financial need of each student for whom the college is seeking payment, a process that could delay disbursements.
Reimbursement status also affects the way the college receives proceeds from federally subsidized student loans.
The student-aid actions were first disclosed in an article in the Financial Times, which said that the Education Department had uncovered “fraud” at the college. Citing unnamed “legal sources,” the newspaper said that inspectors had discovered that Bryman admissions officers were assisting students in manipulating their financial-aid forms so they could qualify for additional aid.
Ms. Wilkinson said the company was not aware of any other investigation under way at Bryman. Corinthian, based in Santa Ana, Calif., received an initial copy of the agency’s program review on June 21. The company has 45 days to respond.
http://chronicle.com Section: Money & Management Volume 50, Issue 44, Page A28
