Fine Could Hamper Southeastern U. Merger

2008 U.S. Review Says School Improperly Disbursed Federal Aid to Students

A potential fine for an alleged violation of federal education regulations could imperil the prospective merger between ailing Southeastern University and neighboring GS Graduate School, according to a school official.

The U.S. Department of Education found in a 2008 review that Southeastern had improperly disbursed federal aid to students in an unaccredited online education program, according to an Aug. 21, 2008, investigative report.

Southeastern lost its accreditation entirely at the end of August. School officials say the institution will shut down barring a merger with GS. No classes are being offered this fall.

Founded by the YMCA, Southeastern has operated since 1879 in southwest Washington, serving lower-income and international students. Its accreditation from the Middle States Commission on Higher Education lapsed over concerns of diminished rigor and dwindling enrollment and faculty.

Leaders of Southeastern remain optimistic about merging with GS, which serves 150,000 students a year, most of them government workers.

Southeastern officials contend they never operated an unauthorized distance-learning program. In a November letter to federal officials, former Southeastern president Charlene Drew Davis wrote that only 122 of the approximately 650 students took half or more of their courses online.

Federal regulators initially spoke of fining Southeastern up to $10 million for the alleged violation, according to J.R. Clark, chairman of the school's board of trustees. "We couldn't pay that. It might as well have been a billion dollars," he said.

Discussions last week might have yielded a breakthrough. Federal officials might be willing to settle on a much smaller penalty, Clark said, potentially removing the issue as an impediment to a merger.

He and GS officials would not discuss details of the talks or the proposed fine.

"If we can overcome this, that's the last hurdle," Clark said.