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College must repay nearly half a million


Gaston College also faces lawsuit from former financial aid chief who says she reported school to the feds


Managing Editor

Gaston College has to pay back nearly half a million dollars to the federal government following a scathing U.S. Department of Education review that found multiple violations.

Additional fines and legal damages for the community college that operates campuses in Lincoln and Gaston counties could still result from the matter, which is also the subject of a lawsuit from a former college employee.

That employee, former Financial Aid Director Peggy Oates, claims the college fired her last year, telling her she was to blame for the findings in the review. Although Oates’ civil action against the college has been widely reported, the details of the federal findings and the full scope of college’s liability have not received much public attention until now.

For her part, Oates asks why she was singled out when the review found serious problems with other departments, especially the Registrar’s Office.

She also claims that she not only tried to persuade other college officials to comply with federal regulations, but was the person who reported them to the Department of Education when they refused.

The Times-News has obtained copies of emails that Oates claims were sent between her and several Atlanta-based DOE officials in 2011.

DOE spokesperson Jane Glickman advised the Times-News on Tuesday that her office might not be able to confirm the validity of those emails because of the ongoing lawsuit between Oates and Gaston College, but she also did not deny that they were legitimate.

The emails appear to show that Oates began reporting problems in February 2011. A May 2011 email that appears to be from DOE to Oates promises that her action as a whistle-blower will not be revealed to college administration during an upcoming DOE site visit. A subsequent email in June appears to advise Oates that the DOE has uncovered many issues of concern at Gaston College, “many of them being administrative issues outside financial aid.”

Oates’ lawsuit claims that a reckless attitude toward compliance with federal law existed among the college’s top administrators. She quotes one school official as telling her not to bother with filing a certain report, saying, “If you don’t do it, how will the feds know?”

The college has been relatively tight-lipped about the matter, citing pending litigation. However, Linda Greer, a college vice president who handles public relations, told the Times-News on Tuesday that the college has reached an arrangement with DOE to pay the full $469,247.77 in liabilities identified in the DOE review.

Oates, who is African American, has also filed an Equal Opportunity Employment Commission complaint against Gaston College, claiming that administrators tried to force her to terminate another minority employee in order to insulate them from EEOC liability.

The school’s attorney has been quoted in area media with denials of that specific allegation, but most of Oates’ claims related to her role as a whistle-blower have not received any response other than repeated and so far unsuccessful efforts by the college to have her lawsuit dismissed.

Regardless of the outcome of Oates’ lawsuit, which focuses on her dismissal from the school, the college now makes no denial of the findings in the DOE’s final report, which raises serious questions about the school’s procedures, practices and internal accountability.

Among the key faults identified in the DOE review:

  • The school began awarding financial aid through federal programs to students at its Belmont campus in 2009 without having reported that campus’ existence to the DOE. The school may face further DOE fines as a result.
  • The school was not correctly reporting credit hours for students receiving federal financial aid funds.
  • The college lacked an adequate policy to define the satisfactory academic progress of students receiving financial aid, with the DOE finding multiple areas of noncompliance. The school is responsible for repaying improperly distributed funds.
  • Where the college did have polices for satisfactory academic progress, they were not always properly monitored. The school must repay federal grants as a result.


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