UNITED STATES DEPARTMENT OF EDUCATION
WASHINGTON, D.C. 20202
In the Matter
No. 94-218 SP
IN THE MATTER OF
INSTITUTE OF JEWISH CULTURE Assistance Proceeding
____________________________________ PRCN: 93202012
Appearances: Herbert Schlager, Administrator, for the Institute of
Jewish Culture and Heritage
Howard D. Sorensen, Esq., Office of
the General Counsel, United States
Department of Education, Washington, D.C., for Student Financial Assistance
Before: Edward J. Kuhlmann, Administrative Law Judge
On May 5, 1993, The New York State Education Department wrote to respondent's attorney,
George Shebitz, informing him that the respondent's catalog of courses contained a number of
courses that required a state license before they could be offered. The letter noted that the
materials for filing a license application were sent to Rabbi Kantor on March 1, 1993. Mr.
Shebitz was told that if the respondent reduced its course offering to only religious subjects, it
would be eligible for an exemption from the licensing requirement. If respondent chose to do so,
respondent was told by the state that it must submit an updated catalog which would eliminate
secular subjects. The respondent was given 20 days to respond. On September 7, 1993,
respondent submitted a current course outline and textbooks to the state which it represented
demonstrated that the courses were strictly religious. Respondent, on the basis of that
representation, was granted an exemption from state licensing on September 13, 1993.
On May 11, 1994, the respondent represented to SFAP that it "does not and has never
course that required state licensure." Respondent further represented that it was not
teaching, nor had it ever taught, such courses as American Government and The Growth of
America that required a state license. In its inquiry to respondent, SFAP had pointed out that the
New York State Education Department had, on June 28, 1993, informed respondent that those
courses would require a license. SFAP attached documentation to the FPRD that demonstrated
that during 1992, contrary to respondent's representation, it did offer courses in American
Government in which students enrolled, exams were administered, and results were recorded on
the students' permanent records. From this documentation, SFAP concluded that the respondent
did teach courses that require a state license.
Respondent was informed in the FPRD that because it was not licensed, as required by the State
of New York, it could not meet the definition of an institution of higher education and was,
therefore, not an eligible institution under the Higher Education Act. SFAP states in the FPRD
that because respondent was ineligible to participate in federal student assistance programs, it
would have to reimburse the Department for all federal funds advanced to the respondent for
intended eligible student beneficiaries. Respondent received $2,678,040.See footnote 2
The respondent maintains that it was exempted from state licensure. It states as follows in its appeal from the FPRD: "When we became aware that [our] courses may have to be licensed, we applied for an exemption and were granted one .... The courses themselves as originally taught were never modified. The only requirement with the State Licensing Bureau was that the course descriptions be modified. We plan to take up this issue with the State and ultimately make the exemption we have retroactive." Respondent states its understanding was that even though it
taught courses that needed a license, it would be considered by the state to have been in
"continued compliance and good standing" upon receiving an exemption.
SFAP argues that, under New York law, every private institution in New York State that charges
tuition must be registered or licensed by the state. NY Educ. Law § 500l (a) (Consol.
Institutions are exempted under § 5001 (f) if they teach only religion. SFAP points out
respondent was exempted, on December 10, 1991, in May of 1993, the state found courses in
respondent's catalog that required a license. The state identified 16 courses that required
respondent to obtain a license. Respondent then convinced the state that it had dropped the
courses or did not actually offer them which resulted in the state again recognizing the
as an exempt institution on September 13, 1992. However, SFAP in its review of the 1991/92
and 1992/93 award years found that respondent was offering courses that the state had identified
as requiring a license.
SFAP does not dispute respondent's representation that it has not been sanctioned or found by
state to have operated illegally. Instead, SFAP maintains that that does not demonstrate that
respondent was "legally authorized." In fact, SFAP states, Associate Commissioner
Education Van Ryn found after reviewing the evidence collected by the Department that the
respondent did offer courses that require a license.
Respondent has failed to meet its burden of proof that it is legally authorized to offer a program
of postsecondary education in the State of New York. The State Department of Education told
respondent that its courses in American government would require that it file an application for
and receive a license. Respondent did not apply for and obtain a license, although its records
demonstrate that it did offer courses that required one. The Higher Education Act, the statute
that governs Title IV funds, requires that an institution obtain state authorization to provide a
program of postsecondary education. 20 U.S.C. § 1141 (a) (1992). In the absence of legal
authorization, an institution is liable for all Title IV funds received. In the Matter of Simmons
School, Docket No. 93-6-SP, U.S. Dept. of Educ. (August 2, 1993), aff'd ED Secretary (Nov. 4,
1994). The finding of liability is affirmed.
Edward J. Kuhlmann
Administrative Law Judge
Date: March 25, 1996
A copy of the attached decision was sent by certified mail, return receipt requested to the
Institute of Jewish Culture and Heritage
5313 18th Avenue
Brooklyn, NY 11219
Howard Sorensen, Esq.
Office of the General Counsel
U.S. Department of Education
600 Independence Avenue, S.W.
Washington, D.C. 20202-2110