Mid-Continent University in Mayfield is offering students a no-interest loan to repay their debt to the university over the next 10 years.
Acting President Robert "Tom" Walden issued a notice to students late Thursday night explaining the policy of repayment.
"Instead of exercising our legal right to require immediate payment of your unpaid balance, MCU has decided that in fairness to our students who assumed they would pay for their educational program over time, the university will offer an interest-free institutional loan to be repaid over a period of 10 years," he said via letter.
Students who would have been eligible for federal loans from Aug. 13, 2013, to June 30, 2014, can take advantage of this loan.
The loan will be for the amount of the student's remaining obligation to MCU, after applying any federal Pell or Supplemental Educational Opportunity grants to which the student was entitled. The university stated it will deduct these grants from the student's account in an effort to honor $4.5 million of federal grants that students were entitled to but did not receive.
The college began to have issues with improper and incomplete federal student financial aid paperwork in 2011 with two rounds of paperwork rejected. Funding was cut off last September, the Board of Trustees was notified in October, and issues became public knowledge in late February.
In March, the school received notice that subsequent submissions of paperwork were also denied.
Although students applied and were eligible for federal loans and grants from Aug. 13, 2013, to June 30, 2014, the letter noted, "the U.S. Department of Education (did not approve) certain documentation necessary for the university to receive payment" on federal direct loans and grants.
Student can pay their debt in equal, monthly installments with no interest over 10 years. According to the university, this calculates to a monthly payment of $8.33 for every $1,000 owed.
Students will receive further details by mail.
According to the letter signed by Walden, if a student fails to respond to the repayment packet being sent by mail, the university "will assume you have made other arrangements to pay the amounts due to the institution."
The Mid-Continent Board of Trustees has established a team to explore the possible use of the campus for a theological training program that might locate there.
Mike Rose, board member, has been named chairman of the strategic planning team. He will appoint other team members.
More than 60 years after the private Southern Baptist college opened its doors, Mid-Continent University will close to about 2,000 traditional and Advantage students on June 30.
Students with questions about the repayment process can call MCU at 270-247-8521.
Contact Carrie Dillard, a Paducah Sun staff writer, at 270-575-8657.
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