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.