UNITED STATES DEPARTMENT OF EDUCATION
WASHINGTON, D.C. 20202
In the Matter
UNIVERSITY, Student Financial Assistance Proceeding
Appearances: David B. Rigney, Esq., Lankenau, Kovner &
Kurtz, Attorneys At Law, New York, New York, for Chicago State University.
Edmund J. Trepacz, II, Esq., Office of
the General Counsel, United States
Department of Education, Washington, D.C., for Student Financial Assistance
Before: Judge Richard I. Slippen
From July 1, 1991, to June 30, 1992, auditors from the Department's Regional Inspector General, Region V, conducted an audit for the period of July 1, 1991, through June 30, 1992. An audit report was sent to CSU on April 6, 1994. Based on its review, SFAP issued a FAD containing findings that CSU did not comply with the satisfactory academic progress requirements (Finding # 1) and that CSU's file maintenance was inadequate (Finding # 2).See footnote 1 1 In addition to the monetary liability assessed for Finding # 1, SFAP required that CSU conduct a full file review of
for all Title IV aid recipients for the audit period in order to determine if any other recipients
failed to maintain satisfactory academic progress and, if so, the amount of the improperly
Under 34 C.F.R. § 668.116, oral argument may be heard if
the hearing official determines
that an oral argument is necessary to clarify the issues and positions of the parties as presented in
their written submissions. On April 21, 1995, CSU requested that oral argument be heard on this
matter. I hereby deny CSU's request for oral argument. I find that oral argument is unnecessary
to further illuminate the issues in this appeal.
SFAP asserts that CSU has two policies in effect: a less stringent
policy contained in the
Financial Information section of CSU's Undergraduate Catalogue and a stricter policy found in
the section of the catalogue on Academic Regulations. SFAP argues that CSU applied the more
lenient satisfactory academic progress policy to students who received Title IV assistance.
Further, SFAP argues that when the stricter policy is applied to the 26 students used in the audit's
sample, none would have been considered to be making satisfactory academic progress and,
therefore, all would have been ineligible to receive Title IV aid for the period in question. SFAP
also argues that CSU's admitted additional use of unpublished practices or rules to measure
satisfactory academic progress violates 34 C.F.R. § 668.14(e) (1991).
CSU argues that FAD Finding # 1 is invalid because the audit covered the 1991-1992 academic year and the FAD cites the institution's Undergraduate Catalogue for the 1992-1993 academic year as the source of the two policies.See footnote 2 2 CSU further argues that the FAD does not specify or explain the differences between the two policies or how SFAP determined that one policy was more stringent than the other. CSU also argues that the satisfactory academic progress policies were subject to particularized judgments in individual cases for both Title IV recipients and non-recipients, and that the institution's policies served merely as a flexible guide for determining whether students were maintaining satisfactory academic progress. CSU adds that once individualized judgments are made, without regard to students' Title IV status, and in
accordance with the institution's standards and practices, at least 17 of the 26 students identified
by SFAP were maintaining satisfactory academic progress. CSU asserts that the reduction in the
number of students who did not maintain satisfactory academic progress merits the denial of a
file review since only 9 out of the 200 student files reviewed during the audit indicated that the
students were not maintaining satisfactory academic progress. Thus, according to CSU, the
institution's error rate would be well below the 10 percent used as a standard trigger for
requesting full file reviews and should as well merit a corresponding reduction in the assessed
This tribunal previously has held that the regulation's use of the
word "publish" requires
that the institution make known to the public all of the required elements of its satisfactory
academic progress policy. In Re Santa Clara Beauty College, U.S. Dept of Educ.,
Docket No. 94-24-SP, (November 14, 1994). CSU freely admits that it used the institution's
academic progress policies only as a guide or "framework rather than as a final determinant" and
heavily relied on "judgments of individualized circumstances" and "practices or standards" not
included in the policies identified in Respondent's Exhibit 5 to determine if a student was
maintaining satisfactory academic progress.See
(Respondent's Brief at 9 - 10). CSU's admission that many of its practices were not
published in its satisfactory academic progress policies violates
the requirement of 34 C.F.R. § 668.14(e) that an institution publish its policy.See footnote 4
An institution must apply its satisfactory academic progress policy
under 34 C.F.R.
§ 668.14(e). Additionally, in order for an institution's satisfactory academic progress policy to be valid, its standards must be reasonable. 34 C.F.R. § 668.14(e) (1991). A determination of reasonableness includes the consistent application of the satisfactory academic progress standards to all students within categories of students and programs established by the institution. 34 C.F.R. § 668.14(e)(3)(v) (1991). As demonstrated by CSU's admission, its satisfactory academic progress policies were not applied due to CSU's approach of using these policies as a mere framework for its determinations. Moreover, CSU's tailoring of its policies according to
individual judgments and/or unpublished standards and practices violates the requirement that
CSU consistently apply its satisfactory academic policies.
CSU offers a lengthy explanation of how individualized judgments
and practices not made
known to the public demonstrate that 11 of the 26 students were maintaining satisfactory
academic progress as written. CSU also concedes that a "literal" reading or "rigid" application
the institution's policies would indicate that even some of these 11 students were not maintaining
satisfactory academic progress. As discussed above, CSU's satisfactory academic progress
policies violate the requirement that the institution establish, publish, and apply reasonable
standards for measuring whether a student is maintaining satisfactory academic progress. 34
C.F.R. § 668.14(e) (1991). Therefore, CSU's explanation of these 11 students as well as
remaining students who CSU argues were maintaining satisfactory academic progress as the
of individualized judgments and/or unwritten standards, is not probative evidence that the
institution has complied with the requirements of the regulation.See footnote 5
SFAP argues that CSU failed to maintain documentation such as
financial aid transcripts
or copies of high school diplomas for 10 students and that a financial aid folder was missing for
one student. Although CSU produced the missing documentation for 10 of these 11 students,
SFAP asserts that there is no evidence that CSU reviewed this documentation before disbursing
Title IV funds to these students. CSU argues that it has now provided financial aid transcripts for
seven students, documentation of high school graduation and/or completion for two students, and
an acknowledgment that one student was not in default on a Title IV loan.
Subpart H proceedings govern appeal procedures in cases which arise from audit or program review determinations. Subpart H regulations were intended to assess liability when an
institution misused funds. In Re Macomb Community College, U.S. Dep't of Educ.,
91-80-SP, (May 5, 1993). There must be some harm to SFAP in order to assess liability.
Id. At 7. In In Re Macomb Community College, this tribunal held that SFAP
could assess liability due to the institution's failure to maintain records substantiating the
expenditure of Title IV funds when that
failure resulted in the institution receiving a larger share of Title IV funds than it was entitled.
Id at 8. In the instant case, CSU was able to produce documentation demonstrating that
10 of the
eleven students were eligible to receive Title IV funds. Therefore, I find that CSU has met its
burden of proof under 34 C.F.R. § 668.116(d) that Title IV funds were lawfully disbursed
of the eleven students at issue. However, CSU remains liable for all Title IV funds disbursed to
the one student whose financial aid folder was missing.
2. CSU met its burden of proof in demonstrating that Title IV
funds were lawfully
disbursed to the 10 of the 11 students identified in FAD Finding # 2. CSU remains liable for the
Title IV funds disbursed to the one student whose financial aid folder was missing.
Judge Richard I. Slippen
Dated: April 26, 1996
A copy of the attached initial decision was sent by certified mail, return receipt requested to the
David B. Rigney, Esq.
Lankenau, Kovner & Kurtz, Attorneys At Law
New York, NY 10019
Edmund J. Trepacz, II, Esq.
Office of the General Counsel
U.S. Department of Education
600 Independence Avenue, S.W.
Washington, D.C. 20202-2110