Commission Extends Eastern Gateway’s Probation

YOUNGSTOWN, Ohio – The Higher Learning Commission extended Eastern Gateway Community College’s probation, citing among the reasons an “unrealistic” fiscal year 2023 budget, ongoing litigation and a federal review that hasn’t been finalized.

The commission will visit the campus in spring 2024 and determine the college’s status in November 2024.

John Crooks, Eastern Gateway interim president, said at a Nov. 15 board of trustees meeting that the college is “moving in the correct direction.”

A letter this month from HLC President Barbara Gellman-Danley to Crooks says that probation has been extended “because the Institution remains out of compliance with Criteria for Accreditation” and meets the HLC conditions for probation extension.

The commission placed Eastern Gateway on probation in November 2021, and the latest letter from the commission notes the progress made by the college since that time.

“We have very few outstanding issues with HLC, and we feel confident we can address each one prior to their scheduled focused site visit in May 2024 and their deadline of November 2024,” Dennis Willard, an Eastern Gateway spokesman, wrote in an email to The Business Journal. “We will demonstrate we have the appropriate resources in place to continue operating Eastern Gateway, adjusting our budget and projections to reflect a reduction in our student enrollment, and moving to an upfront reimbursement system instead of the more restrictive model we’ve been operating under for more than a year that has at times tied our hands financially.”

However, the college does not meet criteria regarding the HLC component criteria that “the institution’s resource base supports its educational offerings and its plans for maintaining and strengthening their quality in the future,” the letter from the commission said.

At the Nov. 15 meeting, Crooks told trustees the work is ongoing.

“We’ve had a lot of conversations about these, and we are in the process of addressing these items,” he said.

The HLC letter lists several reasons for its determination.

The U.S. Department of Education program review hasn’t been finalized, it says.

“It is unknown what financial sanctions, limitations, suspensions or other consequences may be assigned” to Eastern Gateway that may affect ongoing operations.

In his email, Willard called discussions between the college and the Department of Education constructive and fruitful.

“We are addressing each concern raised and we have seen progress,” he wrote. “In the last month, the US DOE reimbursed Eastern Gateway more than $7.2 million and we have a request pending currently for an additional $3.66 million.”

The college wants to move away from the more restrictive reimbursement program where the Department of Education pays the college after it has already educated students to one where the college receives payment upfront for educating them, the spokesman said. 

The HLC letter also listed the college’s ongoing litigation issues that could impact ongoing operations. 

Student Resource Center LLC sued Eastern Gateway in U.S. District Court for the Southern District of Ohio, arguing that the college breached its collaboration agreement with the Student Resource Center. 

SRC works with higher education institutions in “the development and marketing of online courses and programs for unions and other professional associations in light of the substantial costs and debt burden associated with traditional four-year degrees,” the lawsuit says.

Its primary institutional partner is Eastern Gateway, which represented 95% of SRC revenue as of June 2022.

The college’s enrollment grew from 5,549 students to more than 42,000 as a result of the collaboration agreement with SRC, the lawsuit says. It contends that Eastern Gateway breached that agreement by issuing a May 10, 2022, notice “asserting that SRC materially breached the collaboration agreement” by removing its then-CEO Michael Perik.

The lawsuit says the college also breached the agreement by failing to pay money owed under the agreement.

The HLC also wrote in the letter that the college’s fiscal year 2023 budget “does not appear to be realistic.”

In his email, Willard referred to the enrollment drop, from 45,000 to 15,000, adding that the college expects it will level off at about 10,000 students in the spring semester.

“We are putting pencil to paper to determine how best to address this reduction,” he wrote. “Eastern Gateway has served Steubenville for 60 years, and is the first community college in Youngstown, and we are working diligently to make the necessary changes to ensure we are here to serve our students, provide jobs for staff and faculty, and contribute to the growth of our communities for the next 60 years.”

The college ended its free college program this year after negotiating an agreement with the Department of Education. Enrollment dropped after that change.

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