New Program

On July 17, 2002, the Office of Federal Student Aid of the U.S. Department of Education (FSA) notified Trocaire College (hereinafter the “College”) in a final program review determination letter that the College was required to repay to the Department of Education (DOE) $482,313 in improperly disbursed Title IV funds. As is its right under the applicable Title IV regulations 34 CFR 668.111-118, the College appealed this finding. (In the Matter of Trocaire College, Docket No. 02-78-SP.)

The College, a small private Catholic college in upstate New York offering predominately two year associate degree programs, in January of 2000, added a certificate program; Transportation Technology: Trucking Certificate Program (the Program). The Program included 12 weeks of classroom study and an 18 week paid externship.

The College was required to seek approval from both the DOE and New York State authorities for the new certificate program. The College so notified New York State which registered the Program. The College never applied to DOE for approval of the Program.
On July 2, 2001, FSA informed the College that it may be liable for any funds disbursed to students prior to approval of the Program by DOE. FSA encouraged the College to submit the Program for approval and addition to its Title IV program eligibility certification. The College so applied. However, on May 30, 2002, FSA notified the College that it had rejected program eligibility for the Program.

Meanwhile, on September 24, 2001, the College had notified the New York State authorities that it intended to discontinue the Program. New York State authorization for the Program was terminated effective June 2002.

On July 17, 2002, FSA issued a final program review determination letter requiring the College to reimburse DOE for $482,313 in Title IV funds disbursed to student enrolled in the Program.

The College appealed asserting, among other arguments, that it did not need DOE’s approval prior to disbursing funds as the Program falls under an exception pursuant to 34 CFR 600.10(c)(2). That regulatory exception allows an institution to forgo the approval process if the new program lead s to an associate degree or leads to gainful employment in a r elated occupation for which the College already offers program instruction and which the DOE has already approved.

The College argued that the new Program led to an associate degree since, though a certificate program, its course work was transferable to an associates degree. It further asserted that the Program also did not require approval by DOE since the program content was related to other degrees offered by the College including computer office work, diagnostic medical sonography, echocardiography, massage therapy, and medical billing.

The case was heard by Judge Allan C. Lewis in Washington, D.C. Judge Lewis ruled against the College rejecting all of the College’s arguments and finding that the transferability of the course work in the certificate program did not meet the regulatory requirement that the course work lead to an associate degree. He further determined that the new Program was different from the existing DOE approved program offerings at the College. Judge Lewis assessed liability against the College in the amount of $482,313.