Over $23 million in annual federal grants and loans issued to Peralta Community College District (PCCD) students could be in jeopardy, according to a report issued on Feb. 1 by the Department of Education’s (DOE’s) Office of Federal Student Aid. PCCD is currently awaiting a response from the DOE on its proposed solutions to the 15 areas of noncompliance identified in the report.

Until the district receives feedback from the DOE, they cannot be sure about the potential consequences of the report, according to Interim Chancellor Jannett Jackson, during the April 11 meeting of the PCCD Board of Trustees. Jackson noted that the DOE has the ability to put sanctions in place, and laid out one of the possible penalties.

“They also have the ability to take away the district’s and the colleges’ ability to even administer Title IV funds which means that none of our students would be able to get financial aid,” Jackson explained.

She added that, in her opinion, it is unlikely the DOE will take away Peralta’s ability to provide Title IV funds, but that they may “impose some kind of financial penalty.” 

The DOE report was based on an audit of district records conducted in November 2022.

Some of the “findings requiring action” cited in the DOE report include missing internal controls within the district, recordkeeping deficiencies, uncashed checks not returned to the DOE, and PCCD’s failure to adequately administer Title IV funds. 

Title IV refers to a section of the Higher Education Act passed by Congress and signed by President Lyndon B. Johnson in 1965. The Higher Education Act was designed to provide financial assistance to college students and established minimum standards for participating colleges. Access to Title IV funds is what allows institutions like PCCD to provide financial aid for its students. 

The DOE report was particularly critical of “repeat findings” regarding Title IV funds that have been mentioned in previous reports, but have yet to be corrected. If the district does not correct these “repeat findings,” they may be referred to the DOE’s Administrative Actions and Appeals Service Group for “possible adverse action.”

“Such actions may include a fine, or the limitation, suspension or termination of the eligibility of the institution” to participate in federal student aid programs, the report states.

The district issued a formal response to the DOE on March 31 describing the “corrective action taken to resolve” each of the 15 findings. 

Ken Lira, District Director of Financial Aid at PCCD, told The Citizen that the DOE requested some additional records after the district’s response was sent. Because of this, Lira said he does not expect a response from the DOE before early June. 

Lira and Tina Vasconcellos, the district’s Associate Vice Chancellor of Educational Services, provided an update on the DOE report to the PCCD Board of Trustees at its April 11 meeting. 

In their presentation, Lira and Vasconcellos consolidated the 15 findings from the DOE report into six categories.

Lira, who joined PCCD in April 2022, told the trustees “this is totally fixable,” and assured them that the district is “tightening up procedures and making sure the staff are trained and ready.” 

Lira told The Citizen that he has responded to reviews by the DOE at three schools where he previously worked (Irvine Valley College, University of La Verne, and Azusa Pacific University).

The presentation elicited comments and questions from all but one of the seven trustees. 

Trustee Nicky González Yuen commented he was “gratified to hear this is fixable,” but said that financial aid issues have been a problem at Peralta since Elihu Harris was Chancellor from 2003-2010. Financial aid issues were also mentioned in the Financial Crisis and Management Assistance Team’s (FCMAT) report on the district in 2019. 

In response to Yuen’s comments, Jackson said stability of leadership is a key requirement for addressing the problem. 

She pointed out that her two-year tenure as interim chancellor makes her “the longest standing CEO that you’ve had for five years,” and added that if Lira were to leave for some reason, the district would be “right back where we started,” in regards to their financial aid issues.

Jackson also described a “system of oral history” used to train people at Peralta rather than having “written standard operating procedures.” She used the example of a new person starting at Peralta who is instructed to go and learn a procedure required to do their job from another employee. 

“‘Go talk to Cindy, she’ll tell you how to do it.’ But what if Cindy has been doing it wrong all these years? It perpetuates the problem,” Jackson explained. 

Jackson said she has convened a “Chancellor’s Work Group” to develop more written documentation for a “district-wide, systemic approach” to addressing the student financial aid issues, rather than having each college handle it on their own. 

“Some of these are quite serious, but they’ve been around for a while with the district, which is why we are taking a different approach than we have in the past,” Jackson told the trustees.

Newly appointed Trustee Paulina Gonzalez-Brito asked Jackson to provide an updated presentation in June after the DOE response has been received and most of the proposed solutions have been implemented. 

When asked by The Citizen if Peralta students should be concerned about potentially losing their financial aid, Lira gave an optimistic response. 

“The district is confident in resolving all of the findings which will ensure students continue to receive their funding. Everything is fixable, and we’ve been doing a lot of work for the last year across the district to ensure we stay in compliance with the Department of Education,” Lira said.

Lira also said that the DOE may be returning to the district in 2024 or 2025 to review PCCD’s progress, and that the district is “working to make sure we are ready for that visit as well.”