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Students abuse financial aid

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By Dana Mate
Collegiate staff writer

With the increase in tuition and the rising unemployment numbers it’s no surprise that many people are returning to college and receiving financial aid. The surprising part is that some people are collecting financial aid in less than honest ways.

“They might get us once, but they wont get us twice,” said Jill Nutt, Executive Director of Financial Services.

Nutt is speaking of the increase in bad debt in recent years due to students dropping classes, but keeping the financial aid they received.

More specifically, she’s speaking of people who drop classes and keep financial aid as part of a money making scheme.

While Nutt, believes the number of students who drop classes with devious intentions is minuscule, the problem remains that people are receiving money without completing the classes.

Getting a job, conflicts with scheduling, or not being prepared for college, are some of the most prevalent reasons return students drop their classes, according to Nutt.

These students often drop their classes after receiving their financial aid refund.
“With the economy the way it is it forces people who wouldn’t necessarily be in college to enroll in classes,” Nutt said. “They come here with the intentions of learning a trade, are awarded financial aid, but something comes up like a job or different opportunity. So they drop their classes.”

Regardless of excuses, the students who keep financial aid are a contributing factor to the increase in bad debt GRCC has accrued in recent years.

This bad debt is money the institution can’t collect and must pay to federal funds.

This problem, although common among two-year institutions, has no guidelines for resolution, according to Nutt.

“Federal regulation is incredibly flawed,” she said. “The laws don’t mesh. If a student is eligible for aid, we’re required to give them the money, but if they drop there is no real standard on how to get it back.”

There are a few ways for students to receive additional money, according to Interim VP of Business and Financial Services James Peterson.

If they are awarded an amount higher then the amount needed to cover tuition, they receive it from either a credit at the bookstore for books and supplies or as a refund approximately 3-4 weeks after the semester starts.

For example, according to Peterson, a student enrolling in classes can get a financial aid allotment, have some left over to buy books, and if they drop classes after 60 percent is complete, they receive the tuition paid and any other amount that they received as a refund.

They must return the money to the college only if they fail or drop before the drop date.

“Thus, the college must anticipate the loss of those funds by charging a ‘bad debt’ expense against its budget,” Peterson said. “In the fiscal year 2009-10, that expense was about $700,000. Unfortunately, that cost is considered when we establish new tuition rates for all students for the following year.”

The student is expected to pay back the money and they may not receive financial aid again until they return the money to the college, but there are no steps in place for the college to collect or hold the students financially responsible unless they re-enroll at GRCC.

“We couldn’t catch them if they tried the scam at other schools,” Nutt said. “Then we are required to pay that money to the government.”

Nutt is quick to add she believes the vast majority of students are good students, but that there is not database to check if they are bouncing to other institutions and working the financial aid flaws there as well.

“I received a Pell Grant after high school and then dropped all my classes at GRCC to get the money back,” said a Kendall student who wishes to remain anonymous.

“I didn’t know for sure if I would get the money but I scheduled classes and then dropped them. The next semester I went to Kendall and have been getting financial aid there for the past two years.”

With a system so flawed and the debt at the college increasing it would serve the college to implement a policy to collect the owed money, but, according to Nutt, sending the issue to the Student Conduct Council is the only avenue being considered.

3 COMMENTS

  1. Not only do these people cause the tuition for all of us to increase, they also waste a lot of our time during classes those first two weeks of a new semester.

    Let’s face it, when the real student sits in class the first two weeks of a new semester, how many of us can pick out exactly who won’t be in class on the third week? They’re easy to notice. Disruptive behavior typically. Their need to give the impression that they’re intelligent and “belong” in a college level classroom. Don’t even get me started on the nightmare of finding a parking spot those first two weeks.

    The standing joke with the police officers, directing traffic those first two weeks of a new semester, mirrors your point. The only difference between this article and the police? The police officers know nothing will be done. Especially since they have been directing traffic every new semesters first two weeks for how many years now?

    Be realistic with a solution. The people that do this: already have bill collectors trying to collect “owed” money. Well, I suppose, GRCC could offer a course in telemarketing? The paying students would be graded on how much debt they collected during a semester.

    The only real solution, in my opinion, is to stop charging American Citizens for a education-period.

  2. Back then, before there was financial aid or any government involvement and colleges were purely private businesses in a competitive free market, tuition was low. You could literally work a summer job and have enough to pay for all four years of college. But when the government and the banks made borrowing money so easy, what do you think the colleges would do? (which are businesses contrary to popular belief.) You would think, “Hey look, all these students now have easy easy access to a large sum of money. And they are completely willing to get themselves into debt. So let’s just raise our prices, year after year, semester after semester.”

    The bottom line is this: easy credit made college expensive. I’d wager that 99% of students going to Harvard depend on a loan. And for the rest of the colleges- almost no one can afford to pay their own way unless their families’ are rich. This was not always so.

    Just as easy credit made college expensive, so did easy credit make houses during the housing bubble expensive. Do I see some light-bulbs going off or is everyone still confused?

    If for instance, those lines of credit dried up, and were no longer available to any student going to college. Millions of students would scramble from bank to bank, from Fannie to Freddie to the White House looking for a loan to pay for college. And let’s say for instance that all the credit dried up. What would happen? The colleges would become ghost towns. The CEOs (I picture them with striped suits and gold rings) would say, “We’re not making any money! No one can afford us anymore without loans available and the cheap community colleges are being burned to the ground with a thousand people on a single waiting list! There are no butts in the seats! What do we do? We have to lower our prices so that the average middle-class family student can afford to go. We won’t make as much money as the student loan days, but we will make more than the current 15 students we have in a campus designed for several thousand.”

    Supply and demand. Cut off that gravy hose, well-meaning as it was, and you will see the free market make college affordable. Cheap credit leads to bubbles, insanely high prices, horrendous widespread debt, among other terrible things, including war. But that is another story.

    What I also find interesting is for some of these government programs that let you go to school for virtually free, they require you to sign up for Selective Service, which is like a precursor to a Military Draft. Now Mike Gravel led the fight against abolishing the Draft, thank goodness, but we still have this strange, unknown program called the Selective Service. Now I cannot think of another philosophy, another idea, another greater violation of freedom and liberty than being forced to enter a war, killing others and potentially losing your own life, against your will, against your liberty and freedom, or else face prison and fines. If that doesn’t go against everything that America and freedom ought to be, then I don’t know what does. It’s an interesting philosophy. Truly in a sense, it is like they are saying, “Listen, we’ll pay for your school and you get to go for free, but in return, we now own you. You will be registered in the Selective Service, and if push comes to shove, and we’ve got another Iraq or region rich in natural resources, or a region that is resisting our will in the name of their own sovereignty, then you will have to potentially give up your life and even murder and kill.” The government which governs least, governs best.

    But anyway, in this economic climate, community colleges are being absolutely crammed. Like life-vests, like an exodus, like the last ship out of a warzone, people are flocking and finding refuge in cheap and affordable community colleges. How can you beat a couple dozen bucks a unit? Also the trade schools and certification programs are being crammed. It’s amazing. So many unemployed and this that and the other are flocking to these schools. And I think it’s a great thing and people will see there’s a huge demand for cheaper education and most importantly:

    Our generation is waking up to the scam of overpriced colleges and worthless degrees.To spend 4 years of your life and a mountain of debt to be handed a piece of paper that couldn’t get you a job if your life depended on it – our generation is waking up to that. There’s fault on every side, from the student who picked Art History (lol) to the banks and schools and government. But I think we’ll see great expansions in our existing community colleges with more teachers and classes and building add ons, and more new community colleges as well from investors who see a good place in the market to make money. The TV show Community didn’t hurt either. So that’s where I see higher education going. The more expensive, traditional 4 year colleges with declining enrollment and then the lowering of their tuition, to a mass exodus into community colleges and trade schools in useful, practical fields, not Art History and Poetry (lol is there a 4 year major for that?). So that’s neat. Let’s let the students tell the overpriced colleges that gone are those gravy days of good living – bring the tuition costs down and most would probably prefer you guys to community colleges. But until then, we are boycotting you vicious band of thieves and bankers wanting to drown us in debt.

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