YSU Executive to be ‘On Loan’ to Eastern Gateway

YOUNGSTOWN, Ohio – The vice president of student affairs, institutional effectiveness and board professional at Youngstown State University will serve as an “executive on loan” to Eastern Gateway Community College.

The college announced in a news release that Mike Sherman, who has been at YSU since 2018, “will oversee an immediate assessment of the college’s internal operations and the development of an action plan to promptly address the most critical priorities needed to stabilize the institution.”

“I’m going to be working with a number of individuals that are being added to a small team I’ll have to work with [and] the leadership of Eastern Gateway to help assure optimum continuation of operations and student services [at Eastern Gateway] in the near term,” Sherman said. 

That team is being assembled and will include financial analysts and human resources professionals, he said.

The work will help Eastern Gateway meet the conditions associated with the release of a state share of instruction funding from the state Controlling Board last week. 

The state Controlling Board on Dec. 18 approved advancing the college $6 million to assure adequate cash flow and allow it to meet payroll. It amounts to a three-month advance in state share of instruction.

Lauren Mounty began working with Eastern Gateway as a consultant Dec. 11. The news release from the college said she “will continue to serve as the lead person responsible for review and evaluation of the college’s financial aid department, specifically with the goal of updating internal processes and procedures to facilitate timely and consistent Pell Grant reimbursements from the U.S. Department of Education.”

Mounty’s work is expected to take three to six months, and she’ll earn $13,000 per month.

John Crooks, interim president since July, will continue in that role, “focusing on items identified by the Higher Learning Commission (HLC) to maintain the college’s accreditation status,” the news release states.

While Eastern Gateway maintains its accreditation, it has been on probation since November 2021 and will remain on probation until at least November 2024.

The college has addressed six of the seven items identified by the Higher Learning Commission, according to the news release from the college.

The U.S. Department of Education placed it on Heightened Cash Monitoring 2 status in August 2022, meaning the college must use its own resources to credit student accounts and then wait for federal student aid reimbursements from USDOE.

Jim Gasior, chairman of the college’s board of trustees, said in the news release that he’s grateful for the expertise of Crooks, Sherman and Mounty.

“We believe there is a bright future ahead for Eastern Gateway, and the work we do now will help ensure the lasting legacy of our college,” Gasior said.

Sherman, who served for 25 years at The Ohio State University and six years at the University of Akron before coming to YSU, said the details of how he will divide his time between YSU and Eastern Gateway is being worked out. He expects his work at the community college to last “no longer than spring semester.”

“I would imagine that emerging from these conversations is, how do we enhance that relationship” between YSU and Eastern Gateway “to the benefit of the region?” Sherman said.

He said his involvement came through former YSU President Jim Tressel, the Ohio Department of Higher Education and conversations with Gov. Mike DeWine’s office. He was asked if he would consider it, and after speaking with Michael Peterson, YSU trustees chairman, and U.S. Rep. Bill Johnson, YSU president-designee, he decided he would.

“We’re still working out how to serve both institutions in a highly professional way and give due diligence” to the process, Sherman said. “This will be a great opportunity to help figure out how to optimize post-secondary education for the region.”

The advance through the state Controlling Board was approved with a list of conditions that Eastern Gateway must meet.

Among them, by Jan. 15, the college must adopt a board-approved financial recovery plan that includes:

• An analysis of the financial difficulty and the causes of all significant revenue or expenditure problems.

• A description of efforts or initiatives proposed and/or undertaken by the college to address the financial difficulties, including an estimate of the time required to resolve the financial difficulties.

• An analysis of how the efforts or initiatives will resolve the financial difficulties, and other potential circumstances that could worsen the financial difficulties.

• A detailed financial forecast for at least three years, including a description of key assumptions and methodology, which will fully stabilize the fiscal conditions of the college at the end of the three-year period.

Also by Jan. 15, a time line, which will be approved by college trustees, must be developed to conduct a search for a college president. By March 1, a “determination shall be made regarding opening for the summer/fall semesters, based on the anticipated financial viability of the institution in the long term.”

Also listed among the conditions:

• Immediate review and elimination of all nonessential expenses.

• Immediate pursuit of structural operating budget expense reductions that are aligned with ongoing revenue projections derived from conservative student enrollment estimates.

• Immediate enactment of internal expense controls to “review and approve all operating budget expenses above a board-determined” threshold.

• Immediate review of the college’s organizational structure and recommendations to streamline for enhanced efficiency of operations.

• Immediate movement on a fall 2023 Pell submission to the U.S. Department of Education with a first payment arriving by mid-February.

• Exploration of supplemental HR assistance options to navigate college rightsizing process.

• Exploration of supplemental finance assistance options to assist with budgetary controls/management/development.

Eastern Gateway’s problems stem from the college’s free tuition program that enabled enrollment to balloon from about 5,000 in 2017 to close to 45,000 at its height. The college expects 10,000 students to be enrolled for spring 2024.

The U.S. DOE in July 2022 ordered Eastern Gateway to cease and desist its Free College Benefit program and stopped Pell grant funds for new students. The department alleged that Pell Grant recipients were charged more than those who didn’t receive the grants.

Eastern Gateway sued the department, asking the court to stop enforcement of the order, saying it threatened the college’s ability to continue operations. Pell Grant funds amounted to nearly 75% of Eastern Gateway’s overall revenue at the time.

The college also argued that the federal officials exceeded their authority; their actions were arbitrary; they failed to provide any recourse for appeal; and they violated the college’s right to due process.

The parties settled the suit in August, and the free tuition program ended.

Copyright 2024 The Business Journal, Youngstown, Ohio.