Graduate students asked to give back thousands of dollars of student loan money may soon be able to toss the bills in the trash.

Victoria Valle, assistant vice chancellor for enrollment management, said Monday the university is close to settling on a resolution that would erase the unexpected bills sent last month to 19 graduate students with fellowships. The students were notified in early October their financial aid eligibility had changed and they were expected to pay back thousands of dollars in federal loans that had already been dispersed.

“It is the intention of the university not to have the students penalized for this term by that action,” Valle said.

The mid-semester change was the result of the university’s move to comply with a federal regulation that requires the fellows’ stipends be reported as available resources, making the student’s eligible for less federal student loan money. Since the students already had the loan money, the university asked them to pay it back.

The Nov. 15 billing deadline for next semester’s classes was pushed back for the affected students.

Valle said officials are working to find a solution to the problem within the university. SIUC could be held accountable for being out of compliance with the regulation, and the university is audited every year, she said.

“If you find anything that you believe to be not in compliance with federal regulation, it is the institution’s obligation to correct that,” she said.

Financial Aid Director Billie Jo Hamilton said last month the university had been working on making the change for about a year, but her office did not know the names of the affected students until October. The university already counted the tuition waivers included in the fellowships as available resources, Hamilton said.

Will Reilly, a fellow in the Diversifying Higher Education Faculty in Illinois program, said he was optimistic the situation would be resolved soon. Reilly has said he already spent much of the $7,000 the university requested he pay back.

“I haven’t heard anything on the record yet, but all my sources say SIU is doing a pretty good job with this,” he said.

Nicholas Zaunbrecher, a Dorothy Delyte Morris Doctoral fellow, said he had not heard any official word on a resolution, but he hoped the situation would work out as well as some expected.

“We’re still kind of in limbo waiting for the administration to decide whether they’re going to do the right thing or not,” he said.

Joe Crawford can be reached at 536-3311 ext. 254 or [email protected].