Audit: Benedict broke federal student loan rules

Diverse Issues in Higher Education, August 24, 2006

COLUMBIA, S.C.

Benedict College has been ordered to repay $658,000 to a federal student loan program because of violations of the program's rules, according to a recent audit.

The school also has been threatened with losing its loan program if it doesn't improve its management and bookkeeping.

A loss of federal loan dollars would cripple Benedict, where more than 90 percent of the students rely on federal aid.

Benedict President David Swinton says the repayments and the threat were not something to be concerned about.

"That's what auditors do," he says. "They point out things that need to be fixed.

"That audit covered every year since the student loan program was started," he adds. "That audit took two years to do. We disagreed with it."

Unlike many other schools, Benedict administers its own student loan program and Swinton says it has been troublesome from the start.

One problem cited by federal regulators is the college's giving of loans to students who are not making satisfactory progress toward graduation. Only about 6 percent of Benedict's students complete a degree in four years. About a quarter of its students graduate in six years, according to figures from the U.S. Department of Education.

"We're not satisfied with the [graduation] rate," Swinton says. "We're dealing with students whose parents were disadvantaged. We're doing the best we can with those kids."

Benedict also has been facing a declining enrollment for the past three or four years. Enrollment peaked at just more than 3,000 students in 2002 and was about 2,550 last fall. Since the school depends on tuition and fees to pay its operating expenses, a drop in enrollment means financial losses as well.

Some of the college's 31 trustees have said they have not been fully briefed on the school's financial problems.

Newly elected trustee, state Sen. Darrell Jackson, D-Hopkins, questioned whether the school's leadership--both its president and its board--have adequately served Benedict's students.

"Claflin University and Morris College have avoided these kinds of penalties" says Jackson, who represents the district in which Benedict is located. "Other historically Black colleges have done what we are doing and have avoided these problems. I question why a student, or a parent, would be comfortable sending their children to an institution with these kinds of issues."

--Associated Press