UNITED STATES DEPARTMENT OF EDUCATION
WASHINGTON, D.C. 20202
In the Matter
CAPRI SCHOOL OF BEAUTY
________________________________________ PRCN: 94405081
Appearances: Leslie D. Zitzka, Director, Chicago, IL, for Capri
School of Beauty Culture.
Alexandra Gil-Montero, Esq., Office
of the General Counsel, United States
Department of Education, Washington, D.C., for Student Financial Assistance
Before: Judge Richard I. Slippen
The FPRD, which resulted from a program review of Capri's Title IV compliance for the 1992-1993 and 1993-1994 award years, contained six adverse findings. Only FPRD Finding # 4 is at issue in this appeal.See footnote 2 2 Finding # 4 found that Capri failed to properly compute pro rata
Effective July 23, 1992,See footnote 3
any institution participating in the Title IV, HEA programs must have a fair and equitable
refund policy in effect under which the institution refunds unearned
tuition, fees, room and board, and other charges to students who receive Title IV assistance and
who either 1) did not register for the period of attendance for which the assistance was intended,
or 2) withdrew or otherwise failed to complete the period of enrollment for which the assistance
was intended. 20 U.S.C. § 1091b(a). The institution's refund policy shall be considered to
and equitable if it provides for a refund in an amount that is the largest of 1) the requirements of
applicable State law, 2) the specific refund requirements established by the institution's
recognized accrediting agency and approved by the Secretary, or 3) the pro rata refund
calculation described in § 1091b(c) if the student was attending that institution for the first
and withdrew before completing at least 60 percent of the period of enrollment. 20 U.S.C.
A pro rata refund means a refund of not less than the
portion of tuition, fees, room and board, and other charges for the period of enrollment for which
the student has been charged that
remains on the student's last date of attendance. 20 U.S.C. § 1091b(c). The refund should
rounded downward to the nearest 10 percent of the period of enrollment. Id. The
amount of the pro rata refund is minus any unpaid charges and the assessment of a
reasonable administrative fee. Id. For educational programs measured in clock hours,
the portion of the period of enrollment that remains is determined by dividing the total number of
clock hours for which the student has
been charged into the number of clock hours remaining to be completed as of the student's last
date of attendance. 20 U.S.C. § 1091b(c)(2)(B).
SFAP argues that Capri improperly calculated pro rata
refunds for 17 students because the institution calculated its refunds using the number of clock
hours the students were scheduled
to complete rather than the actual number of hours the students completed prior to their last dates
of attendance. Capri appears to argue that it only owes refunds to nine of the 17 students cited in
the FPRD because it either 1) recalculated the pro rata refund amounts given in its
previous response to the program review report, or 2) that the institution already refunded the
Capri also argues that a pro rata refund should not have been calculated for one student
due to her withdrawal after the 60 percent completion point. See Respondent's Exhibit 3.
Additionally, Capri argues that it does not have to pay these refunds due to the injunction
collection of these refunds issued in California Cosmetology Coalition v. Richard W.
Riley, 871 F. Supp. 1263 (C.D. Cal. 1994).
An institution appealing an FPRD must demonstrate that it properly refunded Title IV funds under 34 C.F.R. § 668.116(d). Capri concedes that it improperly calculated pro rata
refunds for nine of the 17 students identified in FPRD Finding # 4. Capri's assertions regarding
the differing amounts of Title IV funds for these nine students, that the Title IV funds for the
remaining students were refunded, and that one of the remaining students completed at least 60
percent of her educational program are not supported by any evidence presented to this tribunal.
Therefore, I find that Capri has failed to meet its burden under 34 C.F.R. § 668.116(d) and
remains liable for the Title IV funds at issue.
Further, Capri's argument that it is not required to pay these refunds
due to an injunction
prohibiting the Department from collecting refunds is without merit. California Cosmetology
Coalition involved the issue of deducting unpaid charges for refund calculations other than
pro rata refunds calculations. 871 F. Supp. at 1265. As stated by the court, pro
rata refunds were not at issue in the California Cosmetology Coalition decision. Id.
Therefore, there is no basis for Capri's withholding payment of the pro rata refunds to the
Judge Richard I. Slippen
Dated: May 15, 1996
A copy of the attached initial decision was sent by certified mail, return receipt requested to the
Leslie D. Zitzka, Director
Capri School of Beauty Culture
2653 W. 63rd Street
Chicago, IL 60629
Alexandra Gil-Montero, Esq.
Office of the General Counsel
U.S. Department of Education
600 Independence Avenue, S.W.
Washington, D.C. 20202-2110