Eastern Gateway Community College has filed a lawsuit against the US Department of Education and Secretary of Education Miguel Cardona in US District Court for the Southern District of Ohio.

In the lawsuit filed in early September claims that the Department of Education did "irreparable harm" to the school, and to approximately 30,000 students enrolled in the program. 

The lawsuit states that the DOE's actions against the school "threatens its continued operations as a community college."

In July, the DOE ordered EGCC to stop dispursing Federal Pell Grant money to any new students enrolling in the Free College Benefit Program until it was redesigned.

The DOE determined EGCC was waiving tuition and fees for students in excess of Title IV funds. For students not receiving Title IV funds, the entire tuition and fees were waived. They say that resulted in Title IV students being charged for their education and non-Title IV students not being charged, which violates Title IV requirements.

EGCC disagreed with that analysis and believes the program is fully compliant with federal law but still suspended the program on July 27th to restructure it.

In August, the DOE transferred Eastern Gateway Community College from an Advanced Payment method for Pell Grants to a Heightened Cash Monitoring 2 (HCM2) status. That means EGCC can't request the Pell Grant money first before dispursement, instead, the college will credit the students the money and then request reimbursement from the government.

While the Department of Education said it would give EGCC the opportunity to submit a proposal for restructuring the Free College Benefit Program, the lawsuit says the DOE cease-and-desist letter failed to include any requirements.
The lawsuit also claims when the college attempted to appeal the action against the schools, EGCC was denied due process.
EGCC says its last-dollar scholarship/tuition waiver complies with Federal Student Aid regulations, according to the DOE handbook. 
EGCC claims the DOE action has financially damaged the institution and will continue to damage the school. EGCC is asking the court for a trial by jury.
Eastern Gateway operates two campuses - one in Youngstown and one in Steubenville.