UNITED STATES DEPARTMENT OF EDUCATION
WASHINGTON, D.C. 20202
In the Matter of Docket No. 97-143-EA
Docket No. 97-145-ST
SUE BENNETT COLLEGE, Student Financial Assistance Proceeding
On October 6, 1997, the Office of Student Financial Assistance Programs (SFAP) of the U.S. Department of Education (Department) imposed an emergency action against Sue Bennett College (SBC) and issued a Notice of Intent to Terminate the institution from participation in the Federal student financial assistance programs authorized by Title IV of the Higher Education Act of 1965, as amended (HEA). 20 U.S.C. § 1070 et seq. and 42 U.S.C. § 2751 et seq. SFAP issued its notice in accordance with 20 U.S.C. § 1094(c)(1)(G) and (H), and 34 C.F.R. §§ 600.41 and 668.83. In response to the notice, on October 23, 1997, SBC requested a hearing in the above-captioned proceedings.
According to the Department, both the emergency action and termination action were
based upon SBC's failure to meet the definition of an eligible institution of higher education. In
order to satisfy the definition of an eligible institution, an institution must be, among other
things, accredited by a nationally recognized accrediting association or agency or must have
been granted preaccreditation status. See 20 U.S.C. §§ 1141(a), § 1085(a) and 1088(a), (b), and
(c). By letter dated September 23, 1997, SBA's accrediting agency, the Southern Association of
Colleges and Schools (SACS), informed the Department that it had affirmed its decision to
remove SBC's accreditation, effective September 22, 1997.See footnote 11 SBC does not dispute that SACS
withdrew the institution's accreditation effective September 22, 1997. SBC merely reiterates
that it has litigation pending in U.S. District Court for the Eastern District of Kentucky to have
SACS reinstate its accreditation.
The pertinent facts in this case are not in dispute. SBC lost its accreditation, effective September 22, 1997. If the basis for the loss of eligibility is the loss of accreditation, the sole issue before me is whether the institution has the requisite accreditation. 34 C.F.R.
§ 600.41(e)(1). I have no authority to consider challenges to the action of the accrediting agency. Id. Consequently, SBC's pending action in federal district court is neither determinative nor relevant in the instant proceedings. Accordingly, I find that SBC, by virtue of its loss of accreditation, fails to satisfy the definition of an institution of higher education, and as a consequence, is ineligible to participate in the Title IV, HEA programs.
An emergency action must be upheld if: 1) there is reliable information that SBC
violated provisions of Title IV of the HEA; 2) immediate action is necessary to prevent misuse
of Federal funds, and 3) the likelihood of financial loss outweighs the importance of adherence
to the procedures for limitation, suspension, and termination actions. 34 C.F.R. § 668.83(c).
Here, SBC failed to meet its burden of showing that it meets the statutory definition of an
eligible institution. Therefore, a violation of Title IV has occurred. As such, continuing to
operate within the Title IV programs would lead to further misuse of Federal funds. The final
prong is irrelevant given the nature of this combined proceeding. Having found that the three-
pronged test for imposition of an emergency action has been met, I affirm the emergency action.
As previously stated, if an institution loses its accreditation, the institution no longer
satisfies the statutory requirements that define it as an eligible institution, and, on that basis, the
Department may terminate the institution's eligibility designation. 20 U.S.C. § 1088(b)(4), 34
C.F.R. § 600.5(a)(6). See In re Academy of Hair Design and Technology, Docket No. 93-124-
ST, U.S. Dep't of Educ. (August 4, 1994). Given my finding that SBC does not meet the
definition of an eligible institution, I find that the termination action taken against SBC is
Judge Richard I. Slippen
Dated: February 10, 1998
A copy of the attached initial decision was sent by certified mail, return receipt requested
to the following:
Steven J. Moore, Esq.
109 South Main Street
P.O. Box 1566
Corbin, KY 40702
Sarah J. Wanner, Esq.
Office of the General Counsel
U.S. Department of Education
600 Independence Avenue, S.W.
Washington, D.C. 20202-2110