Debt Reduction Advice | Debt Reduction Advice

While much work remains, including increasing enrollment and raising graduation rates, Texas Southern University one of the major milestones was reached. The U.S. Department of Education has chosen to waive an $11.7 million debt. It was an issue that plagued the university for 13 years.

It root of the university’s debt problem goes back to 1996 with a $40 million penalty that was issued by the education department. The penalty was due to the school’s inability to substantiate its claims that all federal financial aid went to eligible students.

One of the major players that help TSU recover from its debt was Rep. Sheila Jackson Lee. The Congresswoman interceded on behalf of the school. The decision to waive the debt means that Texas Southern can use the money to offer more improvements in its academic programs.

Of those initiatives under consideration an expansion of the number of online courses current available since more people are seeking alternative education that does not interfere with their full-time work schedules. At the same time, such programming will be expensive to build.

Previous attempts to reduce the penalties happened during the Clinton administration when the amount was brought down to $15.7 million. Discussions continued when George W. Bush entered the Presidency, while the school managed to pay down nearly $4 million of its outstanding debt.

Jackson Lee noted that at different times during this period a settlement appeared imminent but then lost momentum when the department experienced restructuring issues.

Texas Southern maintained that the Department of Education relied heavily on a flawed statistical analysis in order to find out how many ineligible students supposedly received financial aid. Representative Lee went on to say that the administrators at the university provided records to support its claim that the issues were not as broad as they seemed.

Lee later met with Education Secretary Arne Duncan not long after he was appointed by President Obama, and he named a new team to reconsider the situation.