Thomas Jefferson University to pay $2.7m after allegedly misusing millions in federal funds
The Philadelphia university will pay the settlement after being accused of improperly using federal loan money meant for medical students.
The university, however, says it was following the rules of the loan as it understood them.
Thomas Jefferson University, a private university in Philadelphia, will pay $2.7 million as part of a settlement with a U.S. attorney’s office in Pennsylvania after being accused of improperly using federal loan money meant for medical students. The university maintains that it has done nothing wrong.
The money in question came from The Primary Care Loan (PCL), a low-interest government award for medical students meant to alleviate shortages of primary care physicians. The Health Resources and Services Administration, a part of the Department of Health and Human Services, administers the loans.
The university is accused of investing nearly the entirety of the money it received from the PCL Fund from 2009-2016 into its endowment– money that was supposed to be given to students or put back into the fund to increase its reach. The university allegedly kept the money it gained on returns. Jefferson then returned $5.6 million in excess cash in 2017.
“When schools agree to participate in the Primary Care Loan program, they must carefully account for these federal funds to ensure that taxpayer dollars are used for public good,” Maureen Dixon, special agent in charge for the Department of Health and Human Services, said in a statement released by the U.S. Attorney’s Office in the Eastern District of Pennsylvania.
The U.S. Attorney’s Office’s press release states that the “settlement resolves allegations that Jefferson improperly invested federal monies expressly intended to be loaned to qualified medical students to finance their medical education, and retained all returns gained from that investment.”
Requirements allegedly broken by the university relate to restrictions stipulating that the funds only be used for student loans or “program-related expenditures,” and that any excess cash or earnings be kept in federally insured accounts and returned to the fund annually, according to the press release.
Despite settling, the university continues to deny the allegations. “Thomas Jefferson University expressly denies the allegations made by the government and admits no liability,” a university spokesperson told Campus Reform. “We have agreed to this civil settlement to bring this 15-year-old legacy matter to a close so that we may continue to focus upon delivery of high quality academic, research, and clinical services during highly challenging times.”
U.S. Attorney Jacqueline Romero criticized the university in the statement, noting that other schools that needed the money could have received it.
“When a medical school wrongfully retains Primary Care Loan program funds that exceed its lending needs, it doesn’t just deprive students at other participating schools the opportunity to use that money to finance their educations,” Romero said. “It deprives our communities of the very resource the program was implemented by Congress to provide—primary care physicians to keep them healthy and strong.”
Campus Reform contacted the office and Thomas Jefferson University for comment.
