UNITED STATES DEPARTMENT OF EDUCATION
WASHINGTON, D.C. 20202
In the Matter of Docket No. 97-30-SP
COOPER CAREER INSTITUTE, Student Financial Assistance Proceeding
Respondent. PRCN: 199630412732
Upon an institution's change in ownership, the institution's eligibility to receive and
disburse Title IV funds terminates, and the new owner must apply for eligibility to participate in
Title IV, HEA funding. 34 C.F.R. §600.31(a) (1996). See also In Re Amarillo West Texas
Barber Styling College, Docket No. 91-90-SA, U.S. Dep't of Education (June 7, 1994), aff'd by
the Secretary (March 16, 1995). CCI changed ownership on March 29, 1996, at the end of its
Winter Quarter, thus losing its eligibility to participate in Title IV student assistance programs as
of that date. 34 C.F.R. §600.31(a) (1996). During its Spring Quarter registration period (March
22 - 29, 1996), however, the previous owners requested and disbursed Pell Grant funds to
students enrolled in the Spring Quarter, which began April 1, 1996.
CCI used the Federal Student Aid Handbook for authority to request these Pell funds for
the Spring Quarter, relying on a provision in the Handbook which allows an institution that is
changing ownership to request any additional funds needed for its students to complete the
current payment period. The Federal Student Financial Aid Handbook, Institutional Eligibility &
Administrative Requirements, Chapter 3, Section 10 (1995-96). CCI believed the current
payment period included the entire Spring Quarter because the funds were disbursed during the
registration period for that quarter, at a time when the previous owners were still eligible.
A current payment period, as defined in 34 C.F.R. §690.3(a)(1) (1996), is a semester,
trimester, quarter or other academic term. This definition does not include quarter breaks,
which in the instant case began March 8 and continued to March 31, 1996 (as listed in CCI's
1995-96 academic calendar).
CCI argued that the Spring Quarter should be included in the period of time referred to as
the current payment period because registration for the Spring Quarter fell into the bracket of
time in which CCI was still eligible as a Title IV institution. However, neither registration nor
quarter breaks fall within the definition of a current payment period. 34 C.F.R. §690.3(a)(1)
(1996). Therefore, I find that the last current payment period for which Pell Grant funds could
have been legally disbursed was for the Winter Quarter which ended on March 7, 1996.
CCI misinterpreted the Federal Student Aid Handbook as authority to request the Federal
funds for what CCI referred to as the current payment period and it improperly disbursed Federal
Pell Grant funds for an academic quarter for which CCI was not eligible to disburse such funds.
Judge Richard F. O'Hair
Dated: August 4, 1997
A copy of the attached initial decision was sent by certified mail, return receipt requested to the
Edmund J. Trepacz, II
Office of General Counsel
U.S. Department of Education
600 Independence Ave. S.W.
Washington, D.C. 20202-2110
Joseph D. Jaap
Cooper Career Institute
2247 Palm Beach Lakes Boulevard, Ste. 110
West Palm Beach, FL 33409