Pataki Is Set to Defer College Aid

ALBANY - Governor Pataki is expected today to propose tightening financial aid regulations for commercial colleges in the state in an effort to guard against giving grants to students who aren't academically qualified, a source said.

If implemented, the plan could reduce state spending on its largest student financial aid program by hundreds of millions of dollars.

The plan, which is expected to be announced as part of the governor's executive budget, would allow Mr. Pataki to address two problems at once: the ballooning cost of the state's Tuition Assistance Program for low-income students, and growing concerns that commercial colleges are helping students cheat on state financial aid applications.

Mr. Pataki will propose that the government defer financial aid payments to commercial colleges whose students receive TAP grants until the students demonstrate that they are academically qualified, possibly by completing a certain number of credits, the source said. The state would reimburse the colleges after that point. Under the current system, the commercial colleges receive the tuition money paid for by the state beginning when the students are enrolled.

If forced to defer the payments, commercial colleges would be deterred from cheating on financial aid forms to maximize their enrollment. For-profit schools rely on the student aid grants for much of their revenue.

As first reported in the New York Times, the New York State Education Department late last year accused one of the fastest growing commercial colleges in the state, Interboro Institute, of manipulating its students' financial aid forms and helping them cheat on entrance exams to assist them in qualifying for aid.

Interboro, which is owned by EVCI Career Colleges and operates in Manhattan, Queens, and Yonkers, is one of a number of for-profit schools whose financial aid and enrollment practices have come under scrutiny. Decker College, the technical school in Kentucky that a New York Republican gubernatorial candidate, William Weld, briefly ran before it collapsed into bankruptcy, is under investigation for similar charges.

Interboro officials responded by saying they would cooperate with the state's investigation, and this month they announced that the school would cap the number of incoming students it enrolls, which was one of the state's requirements. Interboro's enrollment, which stands at 4,500 students, reportedly has quadrupled in the past five years.

Mr. Pataki's proposal, aimed at clamping down on financial aid fraud, may be more agreeable to state lawmakers, particularly in the Democratic-controlled Assembly, than the governor's previous plans to reduce the state's spending on financial aid.

In his previous executive budgets, Mr. Pataki has sought to cut the amount of money the state spends on the Tuition Assistance Program, either by withholding awards until students graduate or by reducing award levels. During budget negotiations, the Legislature in the past has succeeded in restoring the cuts.

The largest state-sponsored student grant program in the nation, TAP grants are given primarily to undergraduate students enrolled in four-year programs. Students can receive a maximum of $5,000 a year in TAP money, which is awarded on a sliding income scale. To be eligible, students must maintain at least a C average, be in good academic standing, and be studying full time.

In the past five years, New York has increased its spending on TAP grants by more than $200 million. During the last academic year, New York gave out $876 million in TAP money to more than 300,000 recipients, with the lion's share going to CUNY and SUNY students. Last year, about 40,000 students attending proprietary schools such as Interboro received TAP money, an increase of about 10,000 students over the 2000-01 academic year.