Philadelphia-based Thomas Jefferson University will pay $2.7 million to resolve allegations that it misused and improperly kept federal dollars that were supposed to be used for student loans, according to a statement from U.S. Attorney Jacqueline Romero.
The university denies the allegations which are from financial activity between 2009 and 2016 and are related to the Primary Care Loan program established by Congress to address a national shortage of primary care physicians.
The Primary Care Loan is administered by the U.S. Department of Health and Human Services’ Health Resources and Services Administration (HRSA) which issues Primary Care Loans to medical schools.
The loan is used to establish a revolving loan account that is used to offer favorable terms to students willing to commit to practicing in primary care for ten years after completing their medical degree.
Medical schools with a so-called Primary Care Loan Fund (PCL Fund) must use the money for loans to medical students meeting the program’s qualifications.
Any earnings that accrue on the PCL Fund must go back into the fund, which increases the money available to lend, ideally, expanding the program’s reach.
But any money in the PCL Fund exceeding the school’s lending needs must be returned to HRSA annually so they can be made available to students at other medical schools participating in the program, Ms. Romero said in her statement.
The settlement with Jefferson resolved a dispute in which the Department of Justice made the following claim.
It alleges the university invested nearly all of its PCL Fund with its endowment and retained the resulting earnings for its own purposes, violating loan program terms. Specifically, 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 from that investment.
These actions allegedly violated HRSA student loan program requirements that program money be used only for loans to students and program-related expenditures; any excess cash in the PCL Fund, that is, any amount not actively on loan or projected to be in the near future, must be kept in federally insured accounts whenever possible; all earnings accrued on the PCL Fund must be placed into the fund to be used to further the program’s purpose; and any excess funds not needed for student loans, including any earnings accrued on any idle funds, be returned to HRSA annually.
No Determination of Liability
The claims resolved by the settlement are allegations only, the statement said; there has been no determination of liability.“Thomas Jefferson University expressly denies the allegations made by the government and admits no liability. 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. Thomas Jefferson University remains committed to our mission to improve lives,” an emailed statement provided to The Epoch Times from the university said.
“To be clear, records maintained by Thomas Jefferson University reflect that PCL funds were managed in accordance with its understanding of standard accounting procedures, as well as any existing guidance. During the course of this investigation, two highly respected forensic accountants and certified public accountants opined that Thomas Jefferson University’s handling of PCL funds align with generally accepted accounting principles.”
Maureen Dixon, Special Agent in Charge for the Department of Health and Human Services, Office of Inspector General, said 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 the public good.
“When a school wrongfully keeps these funds from the program, it prevents other recipients from using them to meet the primary care needs of the community,” Ms. Dixon said in a statement.
“We will continue to work with our partners at HRSA and the U.S. Attorney’s Office to investigate allegations relating to any misuse—including wrongful retention—of federal funds.”
The investigation was conducted by the Office of the Inspector General of the U.S. Department of Health and Human Services and the United States Attorney’s Office for the Eastern district of Pennsylvania. The investigation and settlement were handled by Assistant United States Attorney Lauren DeBruicker, Auditor Dawn Wiggins, and Fraud Investigator Jeffrey Braun.
“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. 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.”
