Removed Mid-Continent University trustee Gale Hawkins says the school became a "student mill" by lowering admission standards and promoting financial aid in recent years to boost enrollment.
The university's steadily increasing enrollment in the past few years, he said, was due in part to lax admission guidelines and the enticement for students to receive federal grants and loans.
The June 30 closing of Mid-Continent has been attributed to improper paperwork filings for federal financial aid. But Hawkins says the paperwork was improperly submitted because of neglect to collect proper admissions information.
"They basically let everybody in, for years," he said.
Hawkins said an MCU financial aid officer had found some students had been admitted in recent years who had high school graduation GPAs of less than 2.0, and a few had less than a 1.0.
"What I only learned recently was the Advantage program had in part became a student mill where standards/requirements were set aside, making it impossible for these students to legally get financial (aid). Hence we lost federal funding for all students," Hawkins said.
Hawkins said some students received grant or loan money that was more than the tuition, and they hoped to leave with the extra cash. Some students, he said he was told by the financial aid officer, were motivated to sign up for classes by the prospect of receiving residual funds, which are living expense dollars included in the loans.
Hawkins emphasized that he knows most students had no intention of cheating the system, but he thinks former administrators tried to build enrollment by advertising "free money" to prospective students if they enrolled.
On July 14, the MCU board removed Hawkins, who had served as a member for 11 years. He was voted off for violating board policy by sharing information with the media and public, according to MCU officials.
In an interview six months ago with a Lexington television station, John Mercer, MCU's former director of corporate development, said the Mayfield university had grown largely because of its abundant grants.
"The biggest reason is because of the grants that are out there and our low tuition cost," he said.
He said there was about $4,500 available in federal grants per student per semester.
"So that makes our grant situation larger than what our tuition costs," he said in the interview.
Mercer said the university had grown by 399 percent over 14 years.
"The fastest growing university in the state of Kentucky," he said.
Asked for comment, MCU Chief of Staff Bill Bartleman sent a response to the Sun Tuesday.
"Since we don't know all of the statements and allegations that are being made by Gale Hawkins, who was dismissed from the board of trustees, and John Mercer, the brother of Jackie Imhoff who was fired as vice president for adult services, we'll wait and respond appropriately after the story has been published."
The news about MCU's impending closure came in February, when Board of Trustees Chairman Tom Butler announced that years of improperly filed paperwork for federal financial aid had led the U.S. Department of Education to halt the school's receipt of federal funds.
Until August of 2013, according to Hawkins, MCU students were authorized to receive federal student aid. Then, the school was placed on heightened-cash monitoring, which meant it could loan the institution's own money, but MCU had to submit the proper paperwork before it could be reimbursed with federal loans.
MCU again this year did not file the right paperwork, which led to its closure.
Hawkins said the issue of improper paperwork is related to weakened admission standards at the university, which he thinks were directed by former university president Robert Imhoff and his wife, Jackie Imhoff, who was also employed at the university. They both resigned in February.
The university did not request or maintain the records it needed to file the proper paperwork with the Department of Education, Hawkins said, because Jackie Imhoff was allowing the enrollment of students who typically would not have met admissions standards by not always requesting documents such as high school transcripts.
Hawkins said the Imhoffs would receive raises from the board when enrollment numbers were up.
Meanwhile, Hawkins said, the board was kept in the dark regarding the school's finances.
Hawkins said the school's finance committee met three times a year and has yet to meet this year.
While much of the blame for MCU's fall has been placed on the Imhoffs, Hawkins, a Murray resident, said the board should have been more accountable.
"The Imhoffs only served at the request and continued request of the Board of Trustees," he said.
"The Imhoffs may have created the action, but it was the Board of Trustees that enabled the environment for them to do that. It all goes back to the trustees. We were responsible."
Hawkins said the MCU administration didn't share with trustees the university's annual audits, which would have highlighted the financial aid problems.
Contact Lauren Duncan, staff writer, at 270-575-8692 or follow @laurenpduncan on Twitter.