WASHINGTON -- Administrators of Baltimore's Sojourner-Douglass College have not submitted an acceptable financial aid audit since 1982, prompting questions about the allocation of $8 million in federal student financial aid at the college, a lawyer for the U.S. Department of Education alleged.
A 1988 review revealed that inadequate record-keeping at Sojourner-Douglass -- a problem cited in a review in the early 1980s -- has continued. The shortcomings include a lack of verification in many student financial aid applications, the review found.
As a result of the violations, the small private college at 500 N. Caroline St. in Fells Point was notified last summer that its student grant and loan programs were being terminated by the government, an act that Sojourner-Douglass administrators yesterday called the "death penalty" for their school.
College officials appealed the revocation order, and a three-day hearing on the appeal opened here yesterday before Department of Education Administrative Law Judge John F. Cook. He is expected to render a written decision by the fall.
Stephen Kraut, general counsel of the Education Department, described 10-year-old Sojourner-Douglass College as an institution that had lost track of its "fiduciary responsibility." The college repeatedly failed to administer and monitor student financial aid programs, thus costing taxpayers because of a loan-default rate of 34 percent, he said.
Kraut and federal investigator John Kolotos charged that Sojourner-Douglass verified information on financial aid applications only after the college was ordered to do so. They also found that the information supplied by some students often contradicted the data listed on their original aid applications.
Kolotos reviewed 20 randomly selected student files, as well as college bank statements, quarterly reports and federal reports.
Kraut said the government is seeking a fine of $220,000.
Leslie H. Wiesenfelder, the attorney representing Sojourner-Douglass, characterized the termination of student aid as a "death penalty" for the college because it relies on financial aid payments and a $200,000 annual grant from the Maryland General Assembly to operate.
"Without financial aid, the college will die," said Wiesenfelder.
Wiesenfelder described the violations as "mistakes" that are now being corrected. The college has graduated 300 students in 10 years, he said, and is attempting to build an endowment and broader support.
Before the revocation, Sojourner-Douglass was ordered to repay $659,752 to the government and private lenders based on loan defaults and college reviews that showed inaccurate bookkeeping. The college appealed that decision and and won reductions in the fines, although they remain unpaid.
The 305 students now enrolled at Sojourner-Douglass are eligible for financial aid pending the outcome of the appeal.