The Register-Herald, Beckley, West Virginia

December 8, 2012

Financial aid for MSU students on hold

By Wendy Holdren
Register-Herald Reporter

— Many Mountain State University students are still awaiting financial aid disbursements for November, and interim president Dr. Richard Sours is asking everyone to remain patient.

“At the start of the school year, the Department of Education (DOE) changed the way MSU awards financial aid,” Sours said, adding that the change was “in response to MSU’s accreditation status.”

He said in the past, MSU sent student records to the DOE, then they sent MSU the funds and they were distributed.

“Now the department is requiring MSU to disburse financial funds up front from our own cash reserves, then they will reimburse us later,” Sours explained.

“In accordance with this new policy, MSU distributed financial aid in September and October, but we have not yet received the reimbursement from the Department of Education.”

He said financial aid money for November, approximately $2.5 million, will be the final disbursement for the school.

“We do not have these funds to distribute until we are reimbursed for previous months.”

The previous two months’ disbursements were not as large as the November amount, according to Sours.

“We need to make sure the cash flow is OK, that we can pay our bills and pay our payrolls before we commit to more student aid. We really thought this process would move more quickly and we would have the initial reimbursements.”

He added, “Hopefully we’re going to be able to make the final disbursement to students soon, but we’re still working those details out.”

MSU senior Kimberly Kerr said she is struggling without the financial aid.

“We have no word on what is going on; financial aid at MSU doesn’t answer our phone calls or e-mails. The Department of Education is also avoiding our phone calls.”

She said many students are “lost” right now and have “given up on their dreams.”

Kerr is also concerned about the remaining balance of her account at MSU; she said, “Anyone that has a balance on their account must pay off the debt before the degree is given.”

According to the Federal Student Aid website, “You must repay your loans even if you don’t complete your education, can’t find a job related to your program of study, or are unhappy with the education you paid for with your loan. However, certain circumstances might lead to your loans being forgiven, canceled, or discharged.”

Direct Loans and Federal Family Education Loan (FFEL) program loans may be eligible for discharge under either of the following circumstances: 1. Your school closes while you’re enrolled, and you do not complete your program because of the closure. Any federal student loan obtained to pay your cost of attendance at that school could be discharged. 2. If you were on an approved leave of absence, you are considered to have been enrolled at the school. 3. Your school closes within 90 days after you withdraw.

The website also says, “You are not eligible for discharge of your Direct Loans or FFEL Program loans if your school closes and any of the following is true: 1. You withdraw more than 90 days before the school closes. 2. You are completing a comparable educational program at another school. If you complete such a program at another school after your loan is discharged, you might have to pay back the amount of the discharge. 3. You have completed all the coursework for the program, but you have not received a diploma or certificate.”

MSU is set to close on Dec. 31, but MSU officials presented a final appeal Tuesday on the North Central Higher Learning Commission’s decision to pull accreditation.

Sours said the university should hear back within two weeks, and he is unsure what will become of outstanding loans for MSU students.

The Department of Education did not immediately respond to requests for comment.

— E-mail: wholdren@register-herald.com