Financial Aid Default

A co-worker told me today that WGU’s student loan default rate had decreased (according to management), so she didn’t see a problem with the way students were allowed to borrow money without making progress – “They must be paying it back”.  So, I went to the Dept of Education to see what they said about WGU’s default rate.  Below is what I found.

This is what I see (sorry, I’m no math genius) – our default rate has declined, but our number of students in default has remained stable.  I’m assuming this is because the number of students in repayment has increased???

How many students do we expect to enter repayment in the next few years?  Especially since enrollment is now about 30,000 (note the enrollment for FY09 was only 13000).  Do we expect about 1,500 students per year to be in default?  Do we expect MORE students to be in default because the fraud now appears to be rampant at the university (I don’t remember it being so bad a few years ago)?

I would appreciate hearing some feedback on this issue.

FY09                       FY08                    FY07

Default Rate  4.9  6  4.4
No. in Default  166  169  90
No. in Repay  3345  2782  2028
Enrollment figures

Percentage Calculation

 13362

25

 11797

23.6

 8735

23.2

Fraud

I decided to start with something that I think is a big problem at WGU – financial aid fraud!  It took me a few years (I’m a slow learner) to figure out how it happens, but now that I know – I’m mad!  Frankly, taxpayers would be furious if they knew what happened here.  Let me tell you how it works…..

Ben (a false name of course) registers to attend WGU as a full-time student.  During his first 6-month term, he passes just one class worth 3 CUs (CUs  stands for competency units and are like credit hours at other universities).  Now, what is important for everyone to consider is that in this case Ben did not even try to pass his other courses!!  He didn’t take notes, do quizzes or even fail the exam!  HE DIDN’T “SHOW UP” TO THE COURSE ONCE  AND WAS NOT SUSPENDED OR EXPELLED FROM THE UNIVERSITY!!!!!!!!!!!!!!!!!!!  But because he talked to his mentor off and on throughout the term, he was able to stay enrolled and collect ALL of his financial aid money.   He admitted to using the money to start a new business.  The new business was consuming a great deal of his time and that is why he said he didn’t work on his other courses – he was busy.  Unbelievable.  He’s using federal loans to pay for his education and tuition at WGU is really cheap, about $3,000 per term, so he was able to collect a ton of “overage” – somewhere around $8,000.  $8,000 to start his new business!!!  Paid for by me and you – the American taxpayer!  OK, there is some more you should know.  Because WGU is so “generous” (with taxpayer dollars) they allowed Ben to register for ANOTHER term and “try again”.  So, Ben registered again as a full-time student, collected around another $8,000 dollars from the taxpayer and this time passed two courses.  Improvement right??  Well, when you consider that he was supposed to complete four courses to be full-time, he’s obviously still far from the mark.  OK….here’s the rub – WGU, again being oh so generous with the taxpayer dollars, see he’s “improving”, AND GRANT HIM ANOTHER TERM OF FINANCIAL AID!!  What??  Are we nuts?? Another $8,000 of overage for his “business” while he’s completing 50% or less of his courses?  Again, he’s not even “showing up” for them!  He’s not even trying!   Ben has collected over $20,000 of taxpayer dollars and he’s completed only three courses.  Yes, three is the total because in his third term he didn’t complete a single course.  Yep, that’s what I said – he didn’t complete a single course and we still paid him his $8,000 of financial aid overage.  Unbelievable.

I know some of my co-workers are not outraged by this because they believe that the money is a loan and the student will have to pay it back eventually. I think they’re being a bit overoptimistic.  Check out this recent article from the New York times http://www.nytimes.com/2011/09/13/education/13loans.html, stating that default rates are sharply increasing.  It also talks about the new loan repayment programs that limits monthly payments to about 15% of the student’s discretionary income for 25 years, then the rest of the loan is forgiven.  OK, let’s think about that, when a student makes $35,000 and has a family of 4, their repayment amount is $18 per month.  If they only make $30,000 and have a family of 4, they pay NOTHING.  Don’t believe me?  Check it out here http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRPlan.jsp.

Fellow WGU employees, what do you think?  Am I the only mentor that has seen this happen?

Fellow taxpayers, what do you think?  Does this upset you?

Everyone at the Dept of Education – is this fraud?  Misrepresentation?

 

 

 

Why I’m here

Hi! I started this blog because I work at Western Governors University (WGU) and am unable to vent my feelings of frustration anywhere else.  You see, at WGU if you say anything slightly negative or critical, management will help you find your way to the unemployment line.  Like many of my co-workers, I’m finding it hard to find another job right now, so venting at work is not an option.  I know many of my current (and former) co-workers are just as frustrated as I am, so I think this blog will serve as a safe place for us to “have a say” in a retaliation-free environment.  So, I invite everyone to read and post – students, current and past employees and yes…even management.  If anyone from management finds their way here, please feel free to post.  We won’t retaliate against you because unlike you, we believe every side/opinion should be heard and considered.