21 News has learned that a major loophole in state law and how community colleges are funded has been closed and will fully take effect by 2021.

This comes after scrutiny by some lawmakers and others about the online college practices of Eastern Gateway Community College.

Republican Senator Matt Dolan of Chagrin Falls, who is also the chairman of the Senate Finance Committee, tells 21 News the change in the law is for a good reason.

"If we didn't make that change, Eastern Gateway would have sucked up all the community college dollars. It would have all gone to Eastern Gateway, and other community colleges would have received nothing," Senator Dolan said.

It's a funding glitch that came to light because of Eastern Gateway's rapid online growth.

"My guess is when a formula was put in place, the idea of online schooling was on nobody's mind," Senator Dolan said.

There's concern that taxpayer money here in Ohio was being used to educate out of state students.

The Republican senator says, "There is nothing wrong with having an online program. But what we saw was they listed their online program as extremely high, and we found out that those online students were not students who ever set foot in the State of Ohio. And likely didn't have any intent to stay in Ohio."

According to the governor's office, the online students at Eastern Gateway were not only from Ohio but all over the United States and the South Pacific.

Some were getting financial help from Ohio tax dollars, even if they did not live in Ohio and had no intention of moving to the Buckeye State.

According to Senator Dolan it's a little complicated, but community colleges are eligible for what is called SSI.  Eastern Gateway officials say SSI actually stands for "State Share of Instruction."  It's money that the state provides to those colleges to help students pay for their tuition.

According to a June 2017 State Auditor's Report, revenue for Eastern Gateway Community College in 2017 increased $11.3-million or nearly 61-percent from 2016. Because of online student growth. State subsidy growth grew in 2017 by $1.2-million, and on-line union schooling also grew tremendously, and that was three years ago.

The way the community college money is distributed is based on enrollment -- and the percentage of state funds distributed goes to the schools with the highest enrollment first. 

"So I don't want to say that any suggestion of what they did was illegal. At the worst, from my perspective, you could say they took advantage of the law as it's stated with technology. We are saying -- you better correct that," Senator Dolan said.

Eastern Gateway replied to 21 News' request for comment saying:

"Last year, the Ohio legislature worked to modernize Ohio's funding formula for community colleges, especially given the significant increase in online educational programming over the last decade. Because of Eastern Gateway's success in offering quality online programs, the college worked directly with legislators to ensure a transition period extended through 2020. As a result of smart financial planning through the transition, the 1,000 jobs in eastern Ohio supported by the subsidy and the programming to students, in Ohio and across the country, will not be impacted when the change goes into effect in 2021."

- Michael Geoghegan
Chief Financial Officer, Eastern Gateway Community College

The college did not comment on how this change in the law, which was part of the latest budget bill, might impact out of state students who may be interested in taking online classes at Eastern Gateway or any Ohio college in the future, if at all.

Eastern Gateway tells 21 News that state funding provided to the college and not out of state students was used by Eastern Gateway to support 1,000 jobs in Eastern Ohio.