President Dottie King talked to students twice this week about a federal audit which recommended the school return $42 million dollars in loans and grants. The audit, conducted by the Office of Inspector General and published late March 2012, contends that SMWC was not eligible to participate in the Title IV program because more than 50 percent of its students were participants in what they determined to be “correspondence courses.” The college as well as its accreditation body, the Higher Learning Commission, classify the college’s distance courses as “telecommunication courses.”
“We did nothing wrong,” King told students congregated in Sullivan Lounge on April 3. “This is an issue of classification. No one hid money or anything like that. This was the result of an audit, not an investigation.”
King assured students that the college’s accreditation would not be impacted and that students’ financial aid was not at risk. She emphasized that student life at the Woods would be unaffected. “This is probably going to take a couple more years to sort out, but you probably won’t hear much. There will probably be long periods of no news.”
According to King, she was informed of an impending audit on her face day of the job as College President two years ago. In 2010, officials from the OIG were set up in Guerin Hall, where they looked at a number of documents and spoke to administrators and people on campus.
After the draft of the OIG’s report was made available to the college in August 2011, the school retained an attorney, prepared a response challenging the report, explaining why their distance programs qualify as “telecommunications courses”, and submitted it to the OIG.
The school received word of the publication of the final report last Friday. “But we had the scholarship dinner and Ring Day and I wasn’t about to let anything take away from that,” said King.
King said the college did not go public with the results of the audit before because there was still hope that the OIG would listen to their response and change their recommendation. “But we always knew the likelihood of the OIG taking a balanced, reasonable response was slim to none,” said King.
“My response is, I feel a little bit of anger and disappointment in the process,” said King. “That they would look at little evidence and make such sweeping judgments, that seems unfair to me. When you hear things like “we don’t care about the quality of the program,” that seems unfair to me.”
The report recommends the college return $42 million in federal loans and grants given to students between 2005 and 2009. However, according to King, even if the Department of Education agreed with the OIG’s recommendation, in reality, that figure would be multiplied by the institution’s default rate, which is low. “It would be a fraction of that number,” said King.
According to King, SMWC is not the only school in this situation. Michael Goldstein, the college’s legal council, is representing three other institutions in similar situations.
Throughout this process, the laws classifying distance courses have not changed. It is the interpretation of those laws that has changed, King explained to students.
Because WED students did not always communicate with instructors on a weekly basis, the OIG concluded that their communications could not be considered “regular,” as is required for “telecommunications courses.”
“How do you define ‘regular’? Different people would define it differently. Still, to this day, the word ‘weekly’ isn’t in the law,” said King.
“Our distance program was designed for flexibility; it’s why our students love the program. But it’s also what the Department of Education doesn’t like.”
For the college’s statement on the audit report, visit http://www.smwc.edu/headlines/woods-online-business-as-usual/
For the full report, including the college’s response, visit http://www2.ed.gov/about/offices/list/oig/auditreports/fy2012/a05k0012.pdf