Western Governors University could face a $700M federal financial aid repayment

Western Governors University could be forced to repay more than $700 million in federal financial aid, the U.S. Department of Education’s Office of Inspector General announced this week.

In Missouri, officials for the online university have a message for their 2,500 students in the state: Don’t worry. They say the charge that the not-for-profit university was ineligible to award financial aid to its students is simply wrong.

The Office of Inspector General came to its conclusion after auditing WGU, which has 89,000 students across the country and offices in St. Louis and Kansas City.

WGU was launched in Missouri in 2013 by then Gov. Jay Nixon as a way to provide affordable higher education for citizens who had some college but no degree. One of his goals was to add people into the state’s work force.

The office of inspector general claims that too many of the university’s courses do not feature “regular and substantive interaction between students and their instructors,” a federal requirement for distance education.

The inspector general recommended the Department of Education require the university to return $712.6 million in federal grants and loans that students used to pay tuition from July 1, 2014, to June 30, 2016.

“They misinterpreted the law,” said Angie Besendorfer, chancellor of WGU Missouri. She added she was confident the matter will be resolved with no impact to students.

Besendorfer said she hasn’t even estimated how much of the $700 million might be connected to Missouri students’ financial aid. Students pay $6,000 a year for WGU Missouri online courses designed for them to work at their own pace.

“We are so confident that this is a misstep that we haven’t even begun to discuss what ifs,” Besendorfer said. “Out student have direct contact with faculty members who they talk to on a weekly basis.”

Scott D. Pulsipher, president of the university, based in Salt Lake City, Utah, told The Chronicle of Higher Education that while the inspector general “has an opinion, it doesn’t mean that opinion is right.”

Mará Rose Williams: 816-234-4419, @marawilliamskc

This story was originally published September 22, 2017 at 6:14 PM with the headline "Western Governors University could face a $700M federal financial aid repayment."