News reports about allegations of events in the locker room at Penn State have not been good for student recruiting. For a while, at least, whenever someone mentions Penn State, people will think about the incident in the locker room instead of the academic programs and other reasons that Penn State is a fine university. The alleged unchecked abuse of children by a staff member will harm the reputation of the university for several years to come.
Something that has not been mentioned however, is what this situation could mean to Penn State financially. In addition to the likely lawsuits to be filed against the university by parents of the children who bring charges, there is a potentially larger financial loss. The potential effect on Title IV aid.
Title IV aid includes funds that many students depend upon to attend college like Pell Grants, work study and student loans. If these funds are withdrawn from the university for failure to comply with a federal reporting requirement, the results would be devastating for students and for the university. For many universities, no Title IV means a devastating blow to enrollment and funding.
Colleges have a responsibility to report crimes that were reported to campus security or law enforcement each year to the federal government under the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act and the Higher Education Opportunity Act. Because of this Act, education consumers can look at crime statistics for colleges they are considering at www.ope.ed.gov/security.