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ED officials cite mid-session budget review processes and provide verbal assurances, while Texas and other states argue delays threaten smaller agencies. The disagreement also raises concern that administrative cost allowance funds may be considered to offset Pell Grant 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","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-11-03","2026-09-28",true,{"@type":102,"interactionType":103,"userInteractionCount":29},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"What prompted Texas to file a federal lawsuit?","Question",{"text":112,"@type":113},"Texas sued to compel payment of more than $5 million in federal administrative funds that it said were being withheld despite repeated assurances.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"Why did the Education Department say the payments were delayed?",{"text":117,"@type":113},"ED officials said payment was held up due to mid-session budget review processes, and they stated the review was completed and checks would be issued soon.",{"name":119,"@type":110,"acceptedAnswer":120},"How did the dispute relate to Pell Grant funding?",{"text":121,"@type":113},"Sources raised concern that ED might consider using cost allowance money to offset remaining Pell Grant shortfalls, potentially leading to student award cuts if additional funds were not found.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},419410,1790864680,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":19,"category_name":20,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":29,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":34,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":143,"read_time":144,"preview_page_count":4},137451211410,"https://ap-avatar.wpscdn.com/avatar/2000bb0a9246f588df?x-image-process=image/resize,m_fixed,w_180,h_180&k=1786362646172706240","Vo1。14,No。139  \nMonday,July 21,1986  \n# LOAN AGENCY ADMINISTRATIVE FUND DISPUTE WITH ED SPILLS INTO COURT\n\nPromises proved to be small consolation last week as the Texas Guaranteed Stu-dent Loan Corp.took the Education Department to federal court to force paymentof more than $5million in federal administrative funds to the state agency.  \nED officials repeatedly have assured guarantee agency officials that checks areforthcoming,but the Texas agency board of directors became tired of waiting.  \nJoe McCormick,executive director of the corporation as well as president ofthe National Council of Higher Education Programs(NCHELP),had been threaten-ing such a lawsuit for months.\"There comes a time when you have to do whatyou have to do,\"he said.  \nED DispleasedFor their part,ED officials are angered by the Texas law-suit,Assistant Secretary for Postsecondary Education C.Ronald Kimberlingsaid payment of the administrative funds had been held up because of mid-ses-sion budget review processes.But,he added,the revlew has been completed andthe checks should be issued soon.  \n\"We are very disappointed that the guarantee agencies have initiated thisprecipitous and unnecessary action,\"Kimberling said last week,adding that hewould \"swear on a stack of Bibles\"that the administrative allowance paymentprocess had begun \"prior to the issuance of the suit.We were not prodded.\"  \nThe suit,Texas Guaranteed Student Loan Corp.v.Bennett,was filed July 14 inU.S.District Court in Austin,Texas.In a telephone interview,McCormick saidthe Texas agency board believed it had been walting far too long for the funds.  \n\"The only thing I've ever seen in writing from the department was an April 1985letter that said that the cost allowanee payments would never be paid again,\"McCormick explained,adding that while ED officials privately have said thepayments will be made,\"we wanted to make sure we were paid in full for 1985and 1986.\"  \nThe lawsuit marks yet another chapter in the continuing administrative fundstory.A lengthy saga,it has been nearly two years in the making.  \nUntil 1984,ED made quarterly administrative fund payments,known as adminis-trative cost allowances,to the agencles。The fund payments,provided throughthe Higher Education Act,are used to pay a varlety of administrative costsincurred by the agencles.Payments were equal to 1 percent of an agency's loanvolume.(more)  \nS  \n      July 21,1986  \n# LOAN AGENCY ADMINISTRATIVE FUND DISPUTE WITH ED SPILLS INTO COURT(Cont.)\n\nED stopped sending the cost allowance checks in October 1984,claiming paymentwas not mandatory.NCHELP,however,said payment of the funds was necessaryfor the survival of several small agencies and helped convince Congress tomandate payment of the funds this year through the fiscal 1986 budget recon-ciliation act,P.L。99-272.In all,state agencies expect to receive more than$100 million in delayed cost allowance payments.  \nAgency officials say that should have closed the book on the dispute,at leastfor this year.But state and Capitol Hi11 sources say ED added a new twist tothe cost allowance story that is causing agency officials additional concern.  \nThose sources say ED has been looking into the possibility of using the federalcost allowance money to offset some of the remaining $220 million shortfall inthe Pell Grant program。Although the underfunded Pell program has received asupplemental appropriation of $146 million,ED stil1 must cut thousands ofstudent awards this fall if more money 1s not found.  \nOptions ReviewedWhile not admitting that they looked at using adminis-trative funds for the Pell shortfal1,an ED official said\"a number of optionshad been reviewed but they were never seriously considered.\"  \nUse of the funds to cover the Pell Grant shortfall could just have been “avicious rumor,\"agreed James Flippen,director of the Mississippi GuaranteedStudent Loan Agency.Sti11,he said,many state guarantee agencies-1ikeMississippi's--need the allowances for financial survival.“Any discus","cbCaioUzYAxWaOjQ","https://ap.wps.com/l/cbCaioUzYAxWaOjQ","pdf",1852981,"English","# LOAN AGENCY ADMINISTRATIVE FUND DISPUTE WITH ED SPILLS INTO COURT\n## Background and filing\n## ED response and assurances\n## Pell Grant shortfall concerns\n## Options and legality debate\n## Meetings, assurances, and GAO criticism","[{\"question\":\"What prompted Texas to file a federal lawsuit?\",\"answer\":\"Texas sued to compel payment of more than $5 million in federal administrative funds that it said were being withheld despite repeated assurances.\"},{\"question\":\"Why did the Education Department say the payments were delayed?\",\"answer\":\"ED officials said payment was held up due to mid-session budget review processes, and they stated the review was completed and checks would be issued soon.\"},{\"question\":\"How did the dispute relate to Pell Grant funding?\",\"answer\":\"Sources raised concern that ED might consider using cost allowance money to offset remaining Pell Grant shortfalls, potentially leading to student award cuts if additional funds were not found.\"}]","LOAN AGENCY ADMINISTRATIVE FUND DISPUTE WITH ED SPILLS INTO COURT | PDF",1790616906,18]