IN THE MATTER OF HEALTH CARE TRAINING INSTITUTE,
Docket No. 92-124-SP
Student Financial Assistance Proceeding
Appearances: Robert S. Butler, Esq., of Arlington, Tennessee
for the Respondent
Donald C. Phillips, Esq., of Washington, D.C.,
Office of the General Counsel, United States
Department of Education for the Office of Student
Before: Judge Allan C. Lewis
This is a proceeding initiated by the Office of Student Financial
Assistance, United States Department of Education (ED), to
recover $21,900,000 in Federal funds advanced to Health Care
Training Institute (HCTI) under the student financial assistance
programs, to require HCTI to repurchase from the lending
institutions the outstanding balances on all Stafford Loans for
the period of July 1, 1987 through December 31, 1990, and to
repay to the Department all interest and special allowances paid
on the Stafford Loans. By letter dated November 16, 1992, HCTI
filed an appeal of the program review determination issued on
September 30, 1992. Due to related issues, this matter was then
consolidated for hearing with a termination and a fine proceeding
initiated against the institution.
Thereafter, on January 19, 1993, HCTI filed a motion for summary
disposition alleging that it properly administered the ability to
benefit test, and, since no triable issue of material fact
exists, HCTI is entitled to, in effect, judgment as a matter of
law related to the program review determination and a partial
judgment in the termination and fine proceedings. ED responds to
this motion by urging this tribunal to deny HCTI's motion for
summary disposition and to grant its motion for summary judgment
on the grounds that the ability to benefit test administered by
HCTI did not adequately measure the student's aptitude to
successfully complete the program to which he or she has applied.
For the reasons stated infra, the HCTI's motion for summary disposition relating to the program review determination is granted, ED's motion for summary judgment in this regard is denied, and the program review determination is found not to be supportable in its entirety.
Under the Federal student financial assistance programs,
financial assistance is available for postsecondary education to
qualified students. A qualified student is an "eligible student"
who is admitted to an institution of higher education by
receiving a high school diploma, securing a general education
development certificate, or demonstrating an ability to benefit
from the training offered.See footnote 1
See 20 U.S.C. § 1141(a) (1991).
Under the ability to benefit requirement, a student is eligible
for financial assistance under a Title IV, HEA program, only if
[is] administered a nationally recognized, standardized or
industry developed test, subject to the criteria developed
by the appropriate accrediting association, measuring the
applicant's aptitude to complete successfully the program to
which the applicant has applied . . . .
20 U.S.C. § 1091(d)(3)(A).
Similarly, 34 C.F.R. § 668.7(b)(1) provides that a student becomes eligible for financial
assistance if, before admission,
he or she--
(1)(i) [i]s administered a nationally recognized,
standardized, or industry-developed test, subject to the
criteria developed by the institution's nationally
recognized accrediting agency or association, that measures
the student's aptitude to complete successfully the
educational program to which he or she has applied; and
(ii) [d]emonstrates that aptitude on that test . . . .
Initially, there is no dispute between the parties that, under 20
U.S.C. § 1091(d)(3)(A) and 34 C.F.R. § 668.7(b), HCTI utilized a
valid, nationally recognized test from July 1, 1987 through
December 31, 1990 as part of its admission procedure. In this
regard, it employed the Wonderlic Scholastic Level Exam
(Wonderlic) which measures aptitude for training in a particular
job task by assessing general adult intelligence.
In administering the Wonderlic test, HCTI utilized a cutoff or
pass/fail score of 7 in determining whether an applicant
possessed the ability to benefit from its nursing assistant
program. This standard was established by virtue of the criteria
of its accrediting agency which required each member institution
to establish written procedures regarding the admission of
students on an ability to benefit basis. ED asserts that HCTI
should have used the Wonderlic test publisher's suggested cutoff
score of 15. Thus, the dispute centers on whether, in
determining the aptitude of an applicant, the standard is
determined pursuant to criteria promulgated by the accrediting
agency of the institution or whether the standard shall be the
test publisher's cutoff or pass/fail score.
According to ED, the statutory and regulatory phrase "measuring
the applicant's aptitude to complete successfully the
program" somehow mandates the usage of the test publisher's cutoff score. On the other hand, HCTI focuses on the dependent clause in the statute and regulation "subject to the criteria developed by the appropriate accrediting association." It argues that this dependent clause requires that an accrediting association, not a test publisher, establishes the criteria employed by its member institutions to determine whether an applicant possesses the ability to benefit.
In the instant case, the language of 20 U.S.C. § 1091(d)(3)(A)
and 34 C.F.R. § 668.7(b) is clear and unambiguous. The
accrediting association establishes the criteria for its member
institutions to ascertain whether a student applicant possesses
the ability to benefit. Such a directive by Congress includes
the selection of the appropriate cutoff score for a national test
by the accrediting agency or association. The plain meaning of
the phrase relied upon by ED--measuring the applicant's
aptitude--does not mandate the usage of the test publisher's cutoff score. Rather, this phrase simply articulates the type of national test to be administered by each institution, namely, one that measures the aptitude of an applicant regarding the particular program for which he or she is applying. Thus, ED's legal position is not supported by the statute or the underlying regulations.
This analysis is consistent with the statutory scheme adopted by
Congress in the student financial assistance area. Accrediting
agencies are employed to establish and monitor a wide range of
educational standards for vocational institutions, colleges, and
universities from the approval of an institution's curriculum and
course content to its physical facilities. Hence, accrediting
agencies possess the expertise, at least in the view of Congress,
to establish an appropriate ability to benefit standard.
ED also relies upon the testimony of the Director of the Division of Policy and Program Development for the Office for Student
Financial Assistance. In the Director's view, the regulations
require an institution to establish a cutoff score "in accordance
with the standards established by the test developer and the
accrediting agency." ED Br. at 14-15. ED urges the tribunal to adopt the Director's oral
interpretation asserting that the
Supreme Court in Chevron, U.S.A. v. Natural Defense Council, Inc., 467 U.S. 837 (1984) has
instructed courts to defer to the agency's interpretation as long as the interpretation is not
clearly erroneous or contrary to the plain meaning of the
This approach was rejected in In re Technical Career Institute, Dkt. No. 92-91-ST, U.S. Dep't of
Education (Oct. 8, 1993) and its
reasoning is equally applicable in the instant case--
ED is wrong in its contention. This Tribunal owes no
deference to unsupported interpretations, positions, or
characterizations of the HEA or its implementing
regulations, the source of which is an administrative
component within the Department of Education. Chevron deference is owed to the Secretary. In
this proceeding ED
is an advocate for its position and does not speak for or
stand in the shoes of the Secretary and therefore is not
entitled to clothe itself in the mantle of Chevron deference. For the purposes of this case, the
is an administrative component of the Department of
Education. Interpretations should be based upon statute,
legislative history and decisions of the Secretary.
Technical Career Institute at 24.
ED also complains that the cutoff score of 7 employed by HCTI was
not a valid indicator of an applicant's ability to benefit. Such
a score, according to testimony in a prior proceeding between the
parties, is equivalent to an IQ score of 73 which is on the
borderline of the mentally retarded range.See footnote
ED has a legitimate concern; however, the real source of its complaint lies with
HCTI's accrediting agency, not HCTI.
HCTI's accrediting agency, the Commission on Occupational Education Institutions of the Southern Association of Colleges
and Schools, promulgated criteria for its member institutions
regarding the admission of students on an ability to benefit
[p]rovisions may be made for the admission of students on an
"ability to benefit" basis. If students are admitted on
this basis, the institution must establish written admission
procedures, apply these procedures uniformly, provide
documented evidence on the use of the procedures, maintain
records on the progress of students admitted under this
provision, and evaluate the effectiveness of the procedures
used in identifying students who are capable of benefiting
from the training offered.
In short, HCTI's accrediting agency delegated the responsibility
to select the appropriate national test and to establish the
cutoff score to its member institutions. While common sense
dictates that HCTI's selection of 7 as a cutoff score was
inappropriate, its action was, nonetheless, performed in
conformance with the procedures adopted by its accrediting agency
pursuant to 20 U.S.C. § 1091(d)(3)(A) and 34 C.F.R. § 668.7(b).
While the standards adopted by HCTI's accrediting agency were
questionable, ED is not without fault in this case. Under the
Department's initial and continuing recognition process for
accrediting agencies, the Secretary determines, inter alia, whether--
an accrediting agency maintains . . . current written
materials clearly describing . . .
(k) [w]ith regard to institutions . . . that admit students on the basis of their ability to benefit from the education or training offered, any criteria established by the agency with respect to nationally recognized, standardized, or industry-developed tests designed to measure the aptitude of prospective students to complete successfully the program to which they have applied.
34 C.F.R. § 602.13.
Moreover, the Secretary also determines whether an accrediting
agency, in making its accrediting decisions regarding its current
and prospective members, obtains and considers accurate
[d]etermining that institutions . . . admitting students on
the basis of ability to benefit employ appropriate methods,
such a preadmission testing . . . for determining that such
students are in fact capable of benefiting from the training
or education offered.
34 C.F.R. § 602.17(d).
In addition, the Secretary re-evaluates each recognized
accrediting agency at least once every five years and employs the
National Advisory Committee on Accreditation and Institutional
Eligibility to assist the Department. 34 C.F.R. §§ 602.3(e) and
Under these circumstances, ED had the means and opportunity to
correct its perceived problem regarding the cutoff score in the
present case. In fact, HCTI's accrediting agency was re-
evaluated in 1989 and 1990 by the Department and the National
Advisory Committee and received a renewal of its recognition by
the Department. However, no changes were proposed or made in its
criteria governing the procedures concerning the ability to
Accordingly, HCTI's motion for summary disposition is granted and
ED's motion for summary judgment is denied.
On the basis of the foregoing findings of fact and conclusions of
law, and the proceedings herein, it is HEREBY ORDERED--
1. That the program review determination is found not
supportable in its entirety;
2. That the demand by ED to recover $21,900,000 in Federal
funds advanced to Health Care Training Institute is vacated;
3. That the demand by ED to require Health Care Training
Institute to repurchase from the lending institutions the
outstanding balances on all Stafford Loans for the period of July
1, 1987 through December 31, 1990, is vacated; and
4. That the demand by ED to require Health Care Training
Institute to repay to the Department all interest and special
allowances paid on the Stafford Loans is vacated.
Allan C. Lewis
Administrative Law Judge
Issued: November 4, 1993
Donald C. Phillips, Esq.
Office of the General Counsel
U.S. Department of Education
Room 4083, FOB-6
400 Maryland Avenue, S.W.
Washington, D.C. 20202
Robert S. Butler, Esq.
11002 Highway 64
Arlington, Tennessee 38002