Docket No. 94-85-ST
Student Financial Assistance Proceeding

Appearances: Marie Obeso, for the Respondent

Donald C. Philips, Esq., for the Office of
Student Financial Assistance Programs, United
States Department of Education

    Before:    Judge Ernest C. Canellos


This matter involves an appeal by Kelly's Beauty School
(Respondent) of a Notice of Intent to Terminate and Fine,
dated April 19, 1994, issued by the Office of Student
Financial Assistance Programs (SFAP), U.S. Department of
Education (ED). On August 4, 1994, I issued an Order Governing
Proceedings which required the parties to brief this case. I
initially required SFAP to file its brief and any exhibits
within four weeks of the date of the Order. However, on
September 1, 1994, SFAP counsel contacted the undersigned to
advise that: he has been unable to reach the Respondent's
President; that it appears Respondent has closed its
operations; that Respondent's counsel has withdrawn from the
case; and there appears to be no one actively proceeding with
an appeal. Consequently, SFAP's counsel filed a motion for
default judgment in the case.

Pursuant to SFAP's motion, I issued a Show Cause Order on
September 2, 1994, requiring the Respondent to respond within
15 days and state why I should not act favorably upon the
pending motion for default judgment. Respondent was advised
that if no timely response was received, judgment would be
entered against it and the appeal would be dismissed. The
Order was sent by certified mail, return receipt requested
(RRR), to the Respondent, as well as by first class mail to
the only known address for Respondent. No response was

Under 34 C.F.R. . 668.89(c), the hearing official is
authorized to take whatever measures are appropriate to
expedite the proceeding. These measures may include, but are
not limited to,
setting time limits for hearings and submission of written
documents, and terminating the hearing and issuing a
decision against a party if that party does not meet those
time limits.

In light of the Respondent's failure to comply with the
Show Cause Order, the Appeal of the Notice to Terminate and
Fine by the Respondent is dismissed. It is hereby-

ORDERED that a Decision is entered against the Respondent
which terminates its eligibility to participate in the
student financial assistance programs under Title IV of the
Higher Education Act of 1965, as amended; and it is further

ORDERED that the Respondent immediately and in the manner
provided by law pay fines in the amount of $23,000 to the
U.S. Department of Education.

Judge Ernest C. Canellos
Issued: October 4. 1994

Washington, D.C.