July 3, 2003

U.S. Department of Education determines some Metropolitan State University students were ineligible to receive financial aid

Contact: Thomas Cook, executive assistant to the president, Metropolitan State University, (651) 793-1902 or Linda Kohl, associate vice chancellor for public affairs, Minnesota State Colleges and Universities, (651) 296-9595

The U.S. Department of Education has determined that Metropolitan State University distributed financial aid over a three-year period to some students who were ineligible to receive it, according to a letter received today by the university.

The department determined that the payments to ineligible students totaled $933,445, which the university will be required to repay to the department and lenders. In addition, the university has been informed that it will be subject to an administrative assessment of $205,000.

"From the first day that we heard from the Department of Education of the potential problems, this administration has taken this matter very seriously," said Metropolitan State President Wilson Bradshaw. "We are determined to correct these problems and to conduct our financial aid activities with accuracy and efficiency."

About 400 students were found to be ineligible for aid between 1999 through 2002 because they had failed to make satisfactory academic progress or they had dropped out and did not return the money. The university currently enrolls more than 9,000 students, about half of whom receive financial aid.

Since the payments to ineligible students were brought to the attention of the university administration in March, the Office of Financial Aid has been placed under the direct supervision of the Vice President for Finance and Administration. At the request of President Bradshaw, the Minnesota State Colleges and Universities Office of Internal Auditing is reviewing the circumstances that led up to the problem and the system's director of financial aid is conducting a review of financial aid policies and procedures.

Metropolitan State University also is conducting its own internal review of financial aid policies and procedures. The university's financial aid director has been placed on administrative leave.

Officials of the Minnesota State Colleges and Universities system said they are not aware of any similar problems at other institutions within the system but are reviewing financial aid practices.

The Minnesota State Colleges and Universities System comprises 33 state universities, community colleges, technical colleges and combined community and technical colleges located on 53 campuses across the state. The system serves approximately 235,000 students annually in credit-based courses and another 130,000 in non-credit courses.