Department of Education letter to Michigan Jewish Institute

8/18/2019 Department of Education letter to Michigan Jewish Institute

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Rabbi Kasriel Shemtov

Michigan Jewish Institute

6890 West Maple Road

APR1 5 2016

Sent Overnight Via UPS

Tracking Number: IZA879640195406575

West Bloomfield, MI 48322-3032

Re: Denial of Recertification Application to Participate in the Federal Student

Financial Assistance Programs-Michigan Jewish Institute, 6890 West Maple Road, West

Bloomfield, MI 48322-3032; OPE-ID: 03284300

Dear Rabbi Shemtov:

On

February 25, 2016, the U.S. Department of Education (Department) advised Michigan Jewish

Institute (MJI) that its application for recertification to participate in the student financial

assistance programs authorized pursuant to Title IV of the Higher Education Act of 1965, as

amended, 20 U.S.C.

§§

1070

et seq

(Title IV, HEA programs), had been denied. In this

February 25, 2016 denial, the Department found that MJI breached its fiduciary duty to the

Department by awarding Pell Grant funds to students who were not regular students as

required for the receipt of those funds. In addition, the Department found that MJI failed to

exercise required standard s of administrative capability by not maintaining consistent and

reliable student records. Finally, the Department found that MJI presented false information to

its accrediting agency. As the denial letter made clear, any one of these bases, standing alone,

was sufficient to deny MJI's request for recertification.

After seeking and receiving an extension to its March 10, 2016 deadline to respond to the

Department's denial, on March 24, 2016, MJI submitted a 33-page response, plus 44 exhibits, to

factually challenge the bases for this decision. The Department carefully and thoroughl y

considered the points raised by that submission. Following its review ofMJl's contrary

contentions, the Department reaffirms its finding in all three areas and concludes that MJI's

rendition of events is inaccurate. Therefore, MJI is informed that the Department's decision to

deny MJI's recertification application is hereby affirmed and is the agency's final decision.

I. MJI Breached Its Fiduciary Duty To The Department

In particular, the Department noted that (a) nearly 2,000 U.S. citizens, who are Israeli residents,

received Pell Grants for s tudying abroad at Israeli institution s from 2006-2012, without ever

Federal tudent

All OFFICE of he U. S. DEPARTMENT of E DUCATION

Administrative Actions and Appeals Service Group

830 First St. N.E. Washington D.C. 20002-8019

StudentAid.gov


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studying at, or graduating from, MJI,

1

(b) 25 of30 students in 2012-2013 and 2013-2014, as

identified by a Department program review, were Israeli residents who received Pell Grants for

studying abroad at Israeli institutions without ever studying at, or graduating from, MJI, ( c)

524 purported MJI students were enrolled in a computer degree program, with more than 75%

earning zero computer-related credits, and the vast majority of the rest having only one

computer-related course listed on their transcript, (d) Israeli resident students were enrolled full

time, and graduated from, Israeli institutions, and (e) U.S. residents were not regular students of

MJI studying abroad.

In response to the Department's first finding, MJI claims, apparently, that all of these 1979

students were studying on1ine, as opposed to studying abroad, as MJI has otherwise

represented, and that 570 actually did graduate from MJI, while another 117 are still enrolled,

after many years, at MJI. (MJI's Response at 8-9.

2

)

The documents MJI submits do not

corroborate its conclusions.

In support of its claims regarding the 570 students, MJI submits the transcripts for 337 students.

(MJI Ex. 8.) How it believes these documents support its conclusions regarding the remaining

233 for whom no transcript was offered is unknown. All 337 transcripts-- which specifically

state whether the student graduated or not-- either say no on this score, or are blank. It is

certainly unconventional to claim that a student graduated when the student's transcript states

otherwise. Nonetheless, apparently, MJI is claiming that all 337 graduated because they

purportedly received a one-year certificate in Judaic Studies.

3

MJI's contention that these 570

In this regard, the Department expressed its awareness of wholly inappropriate advertisements in Israel soliciting

American citizens to enroll in MJI as a ruse to secure Pell Grants. After acknowledging that such advertisements

seem(ed) widespread throughout the country (MJI Ex. 15 at 2), MJI stated in its response that it acted properly to

disassociate itself from these ads. (MJl's Response at 12.) Yet, MJI included transcripts from students enrolled in

dubious partner schools in its Ex. 8. In fact, these transcripts show exactly what is wrong with MJl's behavior. For

example, MJI enrolled, from a single suspect yeshiva, in the same two semesters starting in the Winter, 2012, five

individual s with the same last name, two of whom, aged 66 and 24, are at the same address , and two of whom, aged

24 and 37, have consecutive social security numbers and must be male and female siblings, along with another

female aged 39 and another male aged 22 . See MJI Ex. 8 at 1827-1856.) The fact that this yeshiva was enrolling

both women and men, along with the fact that these supposed students are related, are enrolling in the same two

semesters starting at an off time, that one is in his 60's, and none of the rest are ofa traditional college age, suggests

that, assuming these are real persons, they were responding to a free -money advertisement, without regard for

actual educational attainment. And yet MJI had no problems seeking Pell Grants on their behalf .

2

MJI claims that the Department's list of 1979 students duplicates numerous students and provides a few

supposed examples. Id. at 8, n.1. This statement is false. If students are listed twice on the Department's

Attachment A, it is because they were enrolled during nonconsecutive years or because the Department has no

student transcript information, or because they attended two different schools in two years. The overall count of

unique students, however, is correct.

3

MJI's 2011-2012 catalogue describes this program as intending to serve the needs of severa l different and unique

post-secondary student populations, and lists one as students already enrolled in BAS academic programs at MJI

who find quite attractive the ability to demonstrate academic milestone achievement by earning certificate(s) along

the way to completing their bachelor degree requirements. (ED Ex. 1 at 2.) Apparently this is the category in

which MJI believes all 337 of these students belong. MJl's catalogue further acknowledges that, Students who do

not initially

intend on continuing on to a Bachelor of Applied Sciences (BAS) Degree (as evidenced by an initial

application for both the Certificate and BAS in Judaic Studies) are not eligible for Title JV Financial Aid Programs.


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students earned

either a certificate in Judaic Studies, a bachelor's degree from MJI, or both

(MJI's Response at 9, emphasis added), when not a single one earned a bachelor's degree, when

233 lack a transcript depicting anything, and when the rest received only a certificate from a non

Title IV eligible program, is alarmingly inaccurate.

An

analysis of the 337 transcripts reveals other stark peculiarities. The transcripts MJI supplied

show that students in Israel who were enrolled in yeshivas and seminaries were studying Jewish

texts and rituals, and students in the MJI online classes were studying the same subjects, leading

one to question why any student would enroll in MJI other than to obtain financial aid for their

otherwise ineligible Israeli program. Furthermore, the MJI online classes were not individually

selected by the students: in general, each semester of each year that MJI has

run this program,

the same two MJI online classes were required of every female student, and a different set of two

MJI online classes were required of every male student. And it mattered not whether the student

was a first year student, a second year student, or any other:

e.g.,

the female students in the Fall,

2011 semester in Israel enrolled in MJI Online courses took the same two Judaic Studies classes

(Rabbinical Literature and Jewish History-Second Commonwealth), and the same two Judaic

Studies classes in the Winter, 2012 semester (Rabbinical Literature and Jewish History-Biblical

Period), and the same two in the Fall, 2012 semester, and the same two in the Winter, 2013

semester. All courses consisted of Judaic Studies. The same pattern is seen for male students

with different classes. Without access to, and a review of, all MJI transcripts, it would be

difficult for any accreditor or auditor to understand that there was no permitted course selection

and that the rigid, and extremely limited, curriculum likely served no other purpose than to

disguise the absence of a legitimate academic program necessary to properly secure access to

Pell Grant funds.

As to MJI' s claim that 117 of its 1979 students are still in an active status (MJI Ex. 9), there are

likewise multiple problems. In particular, MJI claims that students who have been away from

the school for up to eight years have re-enrolled, some with no financial aid. In fact, it is

claiming that 48 students are active for whom MJI has not obtained any Pell Grant funds for

2014-2015 or 2015-2016, and 44 for whom MJI has not obtained any Pell Grant funds since

2012-2013, but were last enrolled as far back as 2007-2008.

(See

ED Ex. 2.) Yet, there is no

evidence offered that any of the active students without Pell Grants are paying tuition to MJI,

and otherwise remain actively engaged in the pursuit of a Bachelor's Degree which they initially

intended to pursue from MJI.

In MJI's Ex. 9, as was the case with MJI's Ex. 8, MJI cherry-picked students and transcripts in

order to make it appear that students in general have more MJI credits than is factually accurate.

Because MJI claims that some of these students are still enrolled and current, in order to make a

meaningful comparison, the Department analyzed all 1252 Israeli students as to whom it is

undisputed have had no connection to MJI since the 2011-2012 school year and evaluated their

Id . (emphasis

in original.) The only Title IV-eligible certificate program that MJI offers is a different certificate

program in Talmudic Law and Jurisprudence.


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Michigan Jewish Institu te

Page4

total credits, MJI credits, and percentage ofMJI credits of the total. Not only does MJI claim

none of these students as active, none of them have had any Pell Grants since 2011-2012.

For these students, the average percentage ofMJI credits is 13.4%, far less than the minimum

necessary for the type of contractual relationship that MJI contends it has implemented with

foreign institutions, and far less than is represented on the selectively chosen students contained

in MJI' s Ex. 9. More than one-half of the students, or 679, have zero MJI credits. Only 43 of

these no-MJl-credit students are included in MJI's Ex. and only

one

of them has a transcript

included in Ex. 8. Not a single one of these 1252 student s has more than one year of MJI credits

(24). And not a single student has sufficient overall credits for graduation from any Pell-eligible

program in which they were enrolled. (ED Ex. 3.)

In total, MJI's Ex. 9 contains only 262 of the students whose connection with MJI concluded by

the end of 2012. (ED Ex. 4.) 160 of these students have no matching transcript included in

MJI's Ex. 8. It is not surprising that non-typical outliers will predominate in a skewed selection

of this type, and therefore MJI is able to make it appear from its Ex. 9 that 33% of the credits its

students have received are from MJI, two and a halftimes the actual percentage when this group

is looked at as a whole. Significantly, even taken at face value, this percentage of foreign

content, 66%, is still far beyond the Department 's maximum allowance of 49% for students

study ing at a Title IV ineligible institution with a contractual relationsh ip with an eligible

institution. 34 C.F.R. § 668.5(c)(3)(ii)(A).

It is also perhaps unsurprising that 25% of the students who are not included by MJI in either its

Ex. 9 or its Ex. 8 are in academic difficulty, with up to nine F grades on their transcript, and even

those enrolled in a small number of

MJI

online classes show Fs, Incompletes, or Ds in those

classes. In fact, there are 33 students who were actually enrolled in MJI classes who have zero

MTI credits simply because they failed all MJI classes or otherwise have all incomplete grades .

(ED Ex.

5.)

This is what you might expect to see in a situation where the stude nts have no

incentive to do anyth ing more than the minimum-necessary amount ofMJI work in order to

remain Pell Grant-eligible, and is less likely the picture you might see of students who had

selected MJI as a schoo l where they planned to obtain a degree.

Related to the claim s that MJI makes concerning its ongoing students are signatures provided

on behalf of a small number of them from

the

original graduating classes of 2016 and 20 17.

They purportedly voice their intent to receive a degree from MJI by sign ing a prepared statement

that includes the sentence that they are greatly insulted by the suggest ion that [obtaining a

degree or other credential] was not our purpose or intent when enro lling in MJI. (MJI Ex. 44.)

Of the students in the original graduating class of2016-- those who entered in the Fall, 2012,

representing 1051 students new to MJI-- only seven can be found in MJI's Ex. 44 .

See

ED Ex.

6.) In other words, less than 1% of the original class of2016 say that they intend to actually

obtain a degree in 2016. Another 17 of these 1051 say they will graduate a year later , in 2017.

Id.) In total, no more than 2% of the original entering class of2016 are willing to say that they

are even potentially intending to obtain a degree with their class, or obtain a degree a year later.

Similarly, the Class of 2017 entered in Fall, 2013 , consisting of a cohort of 972 students new to

MJT. MJI produced statements from only 24 students out of the 972 who are willing to say that

they intend to obtain a degree in 2017.

Id.)


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The remaining students in MJI's Ex. 44 include seven who first entered the school in 2014 and

who could not possibly accumulate enough credits to support their representation that they intend

to obtain a bachelor's degree by 2017, three who entered in 2008, four who entered in 2009, 20

who entered in 2010, and 10 who entered in 2011.

There are 3582 students who first entered the

school from 2008-2011, almost all of whom have obtained Pell Grants, and virtually none of

whom have graduated. It is not surprising that MJI can find only a tiny number of these students

who are willing to state that they still intend to get a degree, however unlikely that may be.

Although not a surprise, these are still extraordinary numbers.

The Department's requirements are really not that all that remarkable. Nor are they difficult to

understand. For an institution to be eligible to receive Title IV funds, it must award those funds

only to eligible students. And for a student to be eligible to receive federal student financial

assistance, he or she must intend to receive a degree from the institution where he or she has

enrolled. Title IV funds are not available for the benefit of institutions; they are available for the

benefit of students attending those institutions. Here, MJI created a scheme with little or no

regard for the integrity of the Title IV programs, and the Department, as steward of these funds,

must end MJI's Title IV eligibility.

Regarding the Department's second finding, MJI claims, once again, that many of the students in

the Department's program review were enrolled for more than one year, and that several

graduated or are ready to graduate. (MJI's Response at 18-20.) MJI again fails to adequately

support its contention and misses the point of the Department's finding.

As a threshold matter, and as MJI repeatedly states, the Department, naturally, recognizes that

students do not necessarily have to be physically present to receive training because authorized

institutions may offer instruction through the provision of distance education. The Department

further acknowledges that U.S. citizens

may

be eligible for Title IV funds even while residing

overseas. Nonetheless, when evaluating a student's purported connection to the institution

through which it supposedly intends to obtain a degree, it is fully appropriate for the Department

to consider the totality of the institution's operations, and the nature of the relationship it

maintains with its students, especially when none, or almost none, of its alleged students

graduate with a degree.

Of the 30 MJI students reviewed pursuant to the program review, the Department found the same

sort of casual connection between them and the institution that was discussed immediately

above. Nothing MJI asserted in its response, as reflected in the provision of supposedly updated

transcripts, alters that conclusion.

The key consideration here is how many students graduated, or could still potentially graduate,

as opposed to how many students were able to secure Pell Grants over more than one year of

enrollment.

5

In particular , per MJI Ex. 24, only one student graduated with the degree in which

4

There are also eleven students who, as far as available Pell Grants records show, were never MJI Title

JV

recipients. (ED Ex. 7.)

For example, MJI asserts that, 93% of the 30 students in the random sample (28/30) took online courses directly

with MJI. (MJI Response at 19.) While this is true, only six of the 28 had terms in which they purportedly took


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she purportedly enrolled in MJI for the purposes of obtaining.

6

Yet, this student's transcript is

most peculiar. At the time of the program review, Student S's transcript went through the

Winter, 2014 term, wherein she had completed 95 credit hours. (ED Ex. 8.) The updated

transcript also reflects that this term was the student's final term in which she was enrolled at

MJI, and she is listed with a graduation date of 6/30/2014. (MJI Ex. 24 at 37-38.) However, the

transcript obtained during the program review reflected zero transfer credits; the updated

transcript indicates 29 transfer credits from three different institutions/areas . Further, 12 of these

credits are from the same institution in which the student studied abroad.

7

It is highly unusual

that none of the transfer credits were posted until after the Winter, 2014 term ( and after the

program review), even though the student started at MJI on 9/1/2010, the time to traditionally

award students any applicable transfer credits. The state ofMJl's student academic records casts

doubt on the legitimacy of these credits or, at a minimum, reflects adversely on the quality of

MJI's recordkeeping practices.

8

In addition , MJI claims that, One student (Student #18) is on pace to graduate this year and two

others earned all necessary credits for graduation. (MJI Respon se at 19.) Once again, the

evidence MJI submits does not support its conclusions.

Student #18 has zero reported transfer hours. Per her transcript, she has earned 66 credit hours,

plus two most recent terms in which she has NG as a grade,9 for potentially 24 more credits.

1

The BAS General Judaic Studies degree takes 120 credit hours; thus, barring a surplus of new

heretofore unknown transfer credits, she still has substantial work to complete before her degree

is finished, resulting in no meaningful likelihood that she will graduate this year.

In addition, it is unclear who the other two students are as MJI does not identify them , and the

transcripts it submits do not readily suggest who they may be. Arguably, however, there are two

candidates.

only MJI online courses (the remaining 22 bad terms in which online courses were taken in combination with study

abroad courses). In addition, of those six, five also had at least one term in which they were taking a combination of

online and study abroad.

6

Eleven others received the same Certificate discussed above, which does not provide evidence of graduation

within the context of a regular student.

7

Eleven credits are from something called ''Torah Accreditation, and another six are from something called NYU

Foreign Language Proficiency Test. MJI's catalogue references the

NYU

Test as a source of potential transfer

credits. (ED Ex. I at 6.) The catalogue does not reference Torah Accreditation as a basis to receive transfer

credits.

8

See Part II of this letter below.

9

NG as a grade stands for no grade and suggests that a grade may be pending .

1

The student has received three ''F grades before, so there certainly is no assurance that these classes will result in

earned credits.


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Student #l3's final tenn was Winter, 2014. She had earned 87 credits and had 33 transferred

hours (21 from the same institution in which she was studying abroad).

11

This equals 120 credit

hours, but she also has an r' grade for her final class, a six credit Internship/Externship, in

Winter, 2014, for which she also received six credits in Winter, 2013. The transcript begs the

question,

If this student really completed her studies in Winter, 2013, why is her graduation still

pending? Such an anomaly suggests, once again, that either there are problems with the

legitimacy of her transcript, or MJI's administration of its academic programs is so woefully

inept that a student has been kept pending graduation for multiple years.

12

Similarly, Student #22's final tenn was Winter, 2014. She had earned 101 hours and had 15

transferred hours (from the same institution in which she was studying abroad). It is unclear how

101 credits can satisfy a requirement for 120 credits to graduate. In her final term, she also has

listed the same six credit Intemship/Extemship as Student #13 above, for which no grade was

issued, and thus, arguably remains pending. A transcript that reflects a no grade for more than

two years is a transcript that cannot be relied upon.

13

Accordingly, the program review data continues to reinforce the conclusions that the Department

reached regarding MJI's failure to enroll regular students.

As to the Department's third argument, MJI alleges that the absence of any meaningful number

of computer credits earned by its 524 students who were purportedly pursuing a computer

related degree is irrelevant because these students were also expected to earn certain non

computer credits as part of their degree. (MJI' s Response at 13-17.) Apparently, MJI wants the

Department to believe that it is sheer coincidence that nearly every single MJI student who

enrolled in MJI for the

purpose

of obtaining a computer-related degree

from

MJI decided to

wait to take

any

computer classes until after completing certain religious studies, and that after

completing those religious studies, or a portion of those religious studies, withdrew from MJI

without earning

any

computer-related credits from MJI. This claim cannot withstand even the

most minimal scrntiny.

14

Rather, what is much more likely to have occurred reflects the fact that MJl's accreditor, the

Accrediting Council for Independent Colleges and Schools (ACICS) is certified to accredit

institutions that offer programs in professional, technical, and occupational fields. It is not

certified to accredit religious studies programs. MJI therefore apparently led ACICS to believe

that some substantial component of its curriculum consisted of technical education, specifically,

11

The other 12 were purportedly from the NYU Foreign Language Proficiency Test.

12

ee Part II of this letter below.

13

Finally, MJI notes that, 15% (4/26)-- presumably MJI means 4/27-- of the students in the sample remain active in

the current semester. (MJI's Response at 20.) Accepting for these purposes that the updated transcript data is

accurate , that would still mean that with four current students, and one graduate, and two ready to graduate, that

23 out of 30 have withdrawn, which reflects a much less-than-stellar drop-out rate of 76%.

14

MJI makes no claim that even a single MJI student who enrolled in MJJ for the

purpose

of obtaining a computer

related degree from MJI graduated from MJI with such a degree.


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computer and business degree programs, to which the religious studies were ancillary. Even

though MJI had virtually no classes in these technical areas, and virtually no students enrolled in

MJI's online classes in anything other than religious studies, MJI masked this fact by reporting to

ACICS that it had substantial numbers of students enrolled in computer and business programs.

What is abundantly clear is that these students were not regular students, enrolled in MJI for

purposes of receiving a computer-related degree from MJI. They were religious studies

students, enrolled by MJI for purposes of obtaining Pell Grant funds.

Regarding the Department's fourth finding, MJI claims that the Department's reference to

students' Linkedln pages, and their absence to any reference to MJI, does not establish the

students' intent regarding their enrollment in MJI. (MJI's Response at 17-18.) The Linkedln

pages, however, were offered merely as one more piece of illustrative evidence consistent with

the Department's conclusion that these students did not enroll in MJI for the purpose of

obtaining an MJI degree.

Instead, the Linkedln pages showed that these students enrolled as undergraduate s in Israeli

universities, received undergraduate degrees from these universities , and attended them during

the same years in which MJI claims they were MJI undergraduate students. While MJI claims

that these students were enrolled in an undergraduate program at MJI and in a study abroad

program in Israel, the evidence instead suggests that they were enrolled in an undergraduate

program in an Israeli university or college using MJI to obtain Pell Grant funds for use at an

ineligible institution. The fact that these students actually graduated from an Israeli institution

and apparently dropped out ofMJI after Pell Grant funds were exhausted shows that, in fact,

these students were not regularly enrolled students at MJI, but were actually enrolled in an Israeli

institution.

15

MJI's respon se that one of the 28 students mentions MJI in a document that can be

downloaded from his Linkedln page does not change the Department's conclusion, or the

inference the Department draws from the other instances.

Finally, MJI takes issue with the U.S. resident students with whom the Department spoke who

MJI identified as computer degree students , claiming, apparently, that most of these students

were instead enrolled in the Judaic Studies program , and have simply forgotten details about

their program of study given the passage of time. (MJl's Response at 20-27.) MJI's argument is

nonresponsive to the Department's evidence. In particular, MJI offers nothing whatsoever to

suggest that a single one of these students was really emolled in a computer degree program as

his or her MJI transcript states. Instead, the Department summarized the testimony of these six

students who all stated that they never intended to enroll in any such degree program, and, in

fact, received no computer credits. All of them were falsely represented, repeatedly, over the

course of several years, to ACICS as computer degree students.

6

5

MJI effectively acknowledges this fact in its Ex. 9, where it omits any informat ion relating to 236 out of the 247

Israeli MJJ students who were enrolled at two Israeli degree-granting universities or colleges (Ono and Jerusalem

College of Technology), and omits the transcripts for 241 out of the 247 in its Ex. 8. In marked contrast, e.g. MJI's

Ex. 9 contains information about 33 out of the 37 students listed by the Department who were enrolled at Kol Torah,

a rabbinical yeshiva.

6

Separately, MJI suggested that the Department should not consider the witness interviews conducted by a Special

Agent of the Department's Office of Inspector General because the Agent did not take formal declarations from the


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The exhibits that MJI provides for these students fail to provide any rebuttal evidence. MJI

either omits the application entirely where the student would have made a degree election (Exs.

27, 28, 31), or provides the application showing the student made no election (Ex. 32), or

provides the application showing that the student actually selected Judaic Studies. (Exs. 29, 30).

MJI offers nothing to establish that the degree referenced on the student's transcript was

anything other than a computer-related degree. MJI's failure to contest the Department's claim

renders its response of no avail.

Il MJI Failed to Exercise Adequate Standards of Administrative Capability

Relying upon MJI's own email communications, the Department found that MJI lacked the

requisite administrative capability given, essentially, a party admission that the institution

possessed thousands of inconsistent records . In addition, the Department corroborated this

concession with evidence of 87 MJI students who possessed multiple, inconsistent, transcripts in

their files.

MJI offers no meaningful response to this allegation. Rather it simply asserts, without a scintilla

of evidence, that the claims of wholesale recordkeeping deficiencies made by Moshe Klein, who,

MJI states was employed to handle general management of the school, could not be supported

by

Mr.

Klein when he met with MJI representatives on February 29, 2013.

17

(MJI's Brief at 27.)

If such a meeting really did take place, and if, as a result, MJI really decided that Mr. Klein's

claims were fictitious, reflecting either incompetence or perhaps maliciousness, and that its

records were completely devoid of the thousands of inconsistent records that made MJI's

operations effectively unauditable, it is unfathomable that there would be no records from that

meeting to present.

This is especially true since Mr. Klein's representations served to create a special Data

Integrity team operating something called the Long Jump project, which was intended to

resolve vast categories of irregular records. Once again, if Mr. Klein's statements had been

found to be made out of whole cloth, surely there would be additional records stating that this

project was no longer necessary, and that any efforts by the team would have generated reports

stating that there was ''no there, there.

In addition, MJI dismisses the Department's presentation of 87 student files with multiple,

inconsistent, transcripts as evidencing an error rate of less than

1

given MJl's supposed

enrollment of over 7,000 students during this time. (MJI's Response at 28.) To the contrary,

these exemplars go to the core of MJI's administrative capability. Surely, no document is more

essential to an institution's students, and the receipt and disbursement of Title IV funds, than the

interviewees. (MJI's Supp lemental Response at 1-2.) The Department disagrees. For purposes of this

recertification denial, the Department is confident that the Agent correctly reported the one salient fact at issue,

i.e.

that none of these six students enrolled in MJI for the purpose of obtaining a computer-related degree, contrary to

the representation that MJI made on the student's MJI transcript. In fact, MJI makes no claim contradicting its

student transcripts, rendering its objection moot.

17

No such date actually exists .


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student transcript, and there is no conclusion that can be reached when an institution maintains

multiple transcripts for its students other than that it lacks the administrative capability required

to serve as the Department's fiduciary.

8

MJI's attempt to dismiss this finding as inconsequential only serves to heighten the importance

of denying its recertification application.

9

The possession of administrative capability caru1otbe

aspirational.

It

is an absolute condition precedent to Title IV eligibility, and MJI failed this

mandatory requirement.

20

III.MJI Provided False Information to Its Accrediting Agency

In reviewing the Campus Accountability Report (CAR) data that MJI presented to its accreditor,

ACICS, the Department found that for all 248 of its Pell Grant recipients for 2009-2010, MJI

falsely advised ACICS that every student was enrolled for at least one more year than they

actually were, because, in fact, each student was enrolled for only so long as necessary to secure

receipt of a Pell Grant. MJI, in its response, first argues that such a misrepresentation, if true,

would not have materially changed its retention rate, so it did not constitute an actionable

substantial misrepresentation because a substantial misrepresentation requires detrimental

reliance by the recipient. Specifically, MJI claims that even with proper reporting of the status of

these 248 students it still would have passed ACICS' required retention rate threshold, and thus,

ACICS could not have relied upon the misrepresentation to its detriment. (MJI's Response at

29-30.) Second, MJI asserts, again without a scintilla of evidence in support, that MJI's

Controller reported these 248 students were enrolled for a bonus year because MJI purportedly

considered a student who did not register for classes in the current term and who failed to attend

any courses for 12 consecutive months as having matriculated, and not having withdrawn until

the end of that 12 month period. (MIT's Response at 30-31).

As to MJI's first argument, it is foolhardy to assume that ACICS cares only about the

truthfulness of the information it receives if it has a direct effect on a matrix it otherwise

evaluates. The Department is confident that ACICS, like any accrediting agency, believes it is

entitled to truthful information in all instances, and that if it receives a report that misrepre sents

8

MJI makes the bold claim that the proper conclusion to be reached from these discrepant records maintained in

student files is that the Department [was] confus[ed] between one document which represents the student's actual

transcript, and another document which does not. (MJl's Response at 29 .) Nonsense. A student does not have two

documen ts in his or her file, identical in every respect,

except

for the degree sought through a program of

instruction, at an institution that is operating with the highest degree of care and diligence necessary to serve in

the nature of a fiduciary. ee34 C.F.R. § 688.82.

9

MJI further notes that ACICS' report from its 2013 visit contained no adverse citations based upon the quality of

MJI's student records. (MJl's Response at 27-28; Ex.4 1 ) Even if true, such a conclusion presumably reflects

nothing more than the fact that the visit occurred after MJI committed vast resources to expunging its files of

massive amounts of conflicting documentation.

20

MJI's Ex. also contains a number of duplicate entries, with the duplicat e infonnation hjghlighted. Remarkably,

there are ten names on MJl's Exhibi t that have duplicate listings where the duplicat es contain inconsistent

infonnat ion concerning degree sought, credits earned, enro llment years, and active status. (See ED Ex. 9.) This

provides yet more evidence of MJI's unreliable record keeping and administrative incapability.


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the enrollment status of every single Pell Grant recipient in a particular award year, it will have

relied upon that information, to its detriment , in its overall evaluation of the competency and

integrity of the institution.

As to the second, the claim makes little sense. Although offered as reflecting MJI policy, MJI

fails to produce that policy. And although further offered as consistent with the Controller's

understanding of that policy, MJI produces nothing to support that characterization. As with

its response to the administrative incapability charge, MJI offers a wholly implausible depiction

of events with a dearth of evidentiary support. Such a defense will not cause the Department

to reconsider its findings.

MJI has therefore not provided the Department with a basis to rescind its decision to deny the

school's recertification application. Consequently, the denial is now a final agency decision and

MJI is therefore ineligible to participate in the Title IV programs. The Department's

Chicago/Denver School Participation Division will contact MJI regarding the proper procedures

for closing out its Title IV, HEA participation.

In the event that MJI submits an application to participate in the Title IV, HEA programs in the

future, that application must address the deficiencies noted in this letter.

f you have any questions, please contact Kerry O'Brien ofmy staff at (303) 844-3319.

Susan D. Crim

Director

Administrative Actions and Appeals Service Group

cc: Peter S. Leyton, Counsel for MJI, via [email protected]

Deborah Hill, Executive Assistant, Accrediting Council for Independent Colleges and

Schools, via [email protected]

Michael Beamish, Licensing Manager, Department of Licensing and Regulatory Affairs, via

[email protected]

Department of Defense, via osd.pentagon.ousd-p-r.rmbx. [email protected]

Department of Veteran Affairs, via [email protected]

Consumer Financial Protection Bureau, via CFPB ENF [email protected]

Department of Education letter to Michigan Jewish Institute

Documents

Transcript of Department of Education letter to Michigan Jewish Institute