LOUISVILLE, Ky. (WDRB) – A federal judge met privately with lawyers for the U.S. Department of Education and St. Catharine College for roughly six hours on Wednesday, but didn’t rule on a dispute over financial aid payments.

Instead of a hearing in open court over St. Catharine’s request for an injunction forcing the education department to make the reimbursement payments, U.S. District Judge Greg N. Stivers instead took turns calling in attorneys for private discussions.

Stivers and the two sides have scheduled a conference call for April 4.

St. Catharine has warned in recent filings it needs “immediate” court intervention in order to remain open. The small, Roman Catholic college near Springfield, Ky., claims it is owed hundreds of thousands of dollars in aid that hasn’t been reimbursed.

St. Catharine president Cindy Gnadinger, who took over the top position last year, said Wednesday that the college is waiting on roughly $778,000 in reimbursements, in addition to about $2.5 million it was expecting to be paid starting last December.

St. Catharine can’t send in new aid submissions until previous ones are reconciled, and the college is haggling with the federal government over requests made last November, she said. “That’s really what the crux of our problem is -- the logjam that we have,” she said.

At issue is whether St. Catharine needed federal approval to give financial assistance to students enrolled in undergraduate degree programs that were added from 2011 to 2014. The education department hasn’t yet completed a review of the programs that started in early 2015, said Michael D. Ekman of the U.S. Attorney’s Office.

Speaking during a brief court hearing, Ekman noted that prior audits of the college showed problems in how the college handled financial aid, including a default rate of 50 percent in some loans in years before 2015.

In an interview, Gnadinger said the aid payments are critical because “very few” students have the ability to pay full tuition. The college says in court documents it has used a scholarship and loan program to cover the shortfall of aid funds.

She said she hopes to have a resolution “In the next few weeks.”

If that doesn’t happen, she said college officials will “have to look at the possibility of what our future holds."

“Students need their financial aid dollars or they can’t attend St. Catharine,” she said. “We have to have students.”


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