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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 seek ing 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.
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
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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
1
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 nonconsecut ive 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 "stu dents 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."
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.
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 rel ationsh 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.
Relat ed 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 . (SeeED Ex.
6.) In other words, less tha n 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 int end to obtain a degree in 2017. (Id.)
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. 4 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.)
5
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
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 some thing 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
9
10
Th e student has received three ''F" grades before, so there certainly is no assurance that these classes will result in
earned credits.
The other 12 were purportedly from the "NYU Foreign Language Proficiency Test."
12
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 computerrelated degree from MJI graduated from MJI with such a degree.
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.
16
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
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.) T he 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 .
MJI makes the bold claim that the proper conclusion to be reached from these discrepant records maintained in
student files is that the " Departm ent [was] confus[ed] between one document which represents the student's actual
transcript, and anoth er document which does not." (MJl's Response at 29 .) Nonsense. A student does not have two
documen ts in his or her file, identica l 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." See34 C.F.R. 688.82.
19
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 reflect s
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. 9 also contains a number of duplicate entries, with the duplicat e infonnation hjghlighted. Remarkably,
there are ten names on MJl's Exhibit 9 that have duplicate listings where the duplicat es contain inconsistent
infonnat ion concerning degree sought , credits earned, enro llment years, and active stat us. (See ED Ex. 9.) This
provides yet more evidence of MJI's unreliable record keeping and administrative incap ability.
Susan D. Crim
Director
Administrative Actions and Appeals Service Group