Thomas Jefferson University is expected to pay $2.7 million to resolve allegations of “missed and improperly retained federal funds intended to be used for student loans” to boost investment, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced on Tuesday. 

The university admitted no liability for improperly investing federal funds meant to offer funding to aspiring primary physicians. 

“We have agreed to this civil settlement to bring this 15-year-old legacy matter to a close so that we may continue to focus on the delivery of high-quality academic, research, and clinical services during highly challenging times,” according to a statement from Jefferson denying the allegations. 

The Primary Care Loan (PCL) provides low-interest loans to medical students who commit to practicing in primary care for a decade after completing their medical degree. The participating medical schools must loan the program’s funding to medical students that meet the program’s qualifications, and any exceeding fund, must be returned to the U.S. Department of Health and Human Services annually. 

“When a medical school wrongfully retains Primary Care Loan program funds that exceed its lending needs, it doesn’t just deprive students at other participating schools the opportunity to use that money to finance their educations,” U.S. Attorney Jacqueline Romero said in a Tuesday statement. “It deprives our communities of the very resource the program was implemented by Congress to provide — primary care physicians to keep them healthy and strong.” 

In 2017, Jefferson returned approximately $5.6 million in excess program funding to HRSA. But the new settlement accuses Jefferson of using nearly all those funds between 2009 and 2016 and “retained the resulting earnings for its own purposes, in violation of loan program terms,” the U.S. Attorney’s Office said earlier in the week. 

“When schools agree to participate in the Primary Care Loan program, they must carefully account for these federal funds to ensure that taxpayer dollars are used for public good. When a school wrongfully keeps these funds from the program, it prevents other recipients from using them to meet the primary care needs of the community,” said Maureen R. Dixon, Special Agent in Charge for the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We will continue to work with our partners at HRSA and the U.S. Attorney’s Office to investigate allegations relating to any misuse—including wrongful retention—of federal funds.”

This settlement comes at a time when the university's president, Mark Tykocinski, resigned after backlash over liking controversial tweets. He also stepped down from his role as interim dean of the Sidney Kimmel Medical College. 

Tykocinski will remain a full professor, the announcement said.