WASHINGTON, November 7, 2013 — A state audit shows that Maryland students were unable capitalize on more than $17 million in unused funds dedicated to scholarships. The audit, conducted by the state’s Office of Legislative Audits, blamed the Maryland Higher Education Commission (MHEC) for the situation.
The report says “MHEC did not take intended actions to use accumulated scholarship funds to increase the number of need-based scholarship awards to eligible applicants on its waiting list.”
Accordingly the audit showed that approximately 7,800 students missed an opportunity for scholarships they were eligible for. There are 31,000 students on MHEC’s scholarship waiting list, and if the funds had been used, the list could have been cut by approximately 25%.
As written on its website, “MHEC is the State of Maryland’s higher education coordinating board responsible for establishing statewide policies for Maryland public and private colleges and universities and for-profit career schools. MHEC also administers state financial aid programs that affect students on a statewide basis.
“The Commission’s Office of Student Financial Assistance administers 23 financial aid programs totaling almost $83 million in FY 2003 and providing assistance for almost 46,000 students to attend college.
“Need-based aid makes up slightly more than half of the total State financial assistance. Service-based programs, which require students to work in certain fields after graduation, make up almost 30%. Merit-based aid accounts for around 6% of the total.”
In 2011, it was identified that unused funds were $9.9 million. Accordingly, Chapter 397 of the 2011 Laws of Maryland created a method by which the unused funds would be funneled into need based scholarships.
Instead, the amount of unused funds ballooned to $17.2 million, leaving thousands of students without recourse for an education.
MHEC acknowledged its responsibility to direct the funds correctly in testimony to the Maryland state legislative body in February of 2012, but since then has taken “virtually no action” to do so, according to the audit.
Responding to the findings of the audit, the Maryland Secretary of Higher Education, Danette Howard penned a letter on behalf of the Commission.
Howard’s response concurs with the findings of the audit in regards to the unused funds. Accordingly, MHEC has appropriated $14 million for the Educational Excellence Program, which provides need based scholarships. The funds are designated for the 2014 fiscal year.
The state lists four need based scholarships, two legislative scholarships, and one merit based scholarship. There are nine different career based scholarships available, and eight scholarships available with service obligations.
There are six scholarships available for unique populations, including one titled the “Veterans of Afghanistan and Iraq Conflicts Scholarship.” The deadline for the Veterans scholarship for the 2013 school year has passed.
Last month, the U.S. District Court ruled in favor of MHEC after the Commission was sued over allegations that its policies violated the Civil Rights Act of 1964 and the Equal Protection Clause of the U.S. Constitution by discriminating against the State’s historically black institutions.
The court held that no such discrimination was taking place, however that MHEC’s policies do have some segregative effects, and recommended mediation to resolve the issues.
The audit also found fault with the MHEC for inappropriate measures taken to defend their IT infrastructure, even allowing personal information to be left accessible via an insecure server. The commission is working to resolve those problems.
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