Alleging an illegal “scheme,” Department of Education cuts off student funding to Jewish college.
The U.S. Department of Education is accusing the Michigan Jewish Institute, a four-year college in West Bloomfield, of illegally obtaining federal Pell Grants in its study abroad program. As a result, the DOE has denied the school recertification in the Title IV student financial aid program.
From 2009-2015, according to government figures, MJI collected more than $50 million in federal Pell Grants to disburse, mostly for students in its study abroad program. MJI retains a significant percentage of these funds as administrative fees for that program.
In a sternly worded 17-page letter (DOE Letter) to MJI President Rabbi Kasriel Shemtov dated Feb. 25, the DOE outlines alleged federal student aid funding violations by MJI. At one point, the letter states: “The Department will permit this scheme to continue no longer.”
As of Feb. 29, no students at MJI are eligible to receive federal student loans or Pell Grants, unless MJI is able to have the certification decision reversed, based on information it submits to the DOE by Thursday, March 10.
Federal agents last July seized more than 100 boxes of files from MJI offices in Southfield and at The Shul-Chabad-Lubavitch on the Campus of Living Judaism in West Bloomfield, where some MJI classes are held, in conjunction with the DOE investigation into recertification.
In its detailed letter, in a section including interviews and analyses of LinkedIn accounts for 28 MJI students studying in Israel, the DOE claimed the students “were not ‘study abroad’ students enrolled as regular students at MJI who then traveled overseas to enhance their educational experience before securing, or at least further pursuing, an MJI degree.
“These students had no meaningful connection to MJI, except that MJI used them to illegally obtain Pell Grants on their behalf,” stated the letter signed by Susan D. Crim, director, DOE’s Federal Student Aid Administrative Actions and Appeals Service Group.
Nearly all 28 students interviewed did not mention MJI on LinkedIn and most were Israeli residents studying at Machon Lev in Jerusalem or Ono Academic College in Kiryat Ono, Orthodox institutions. Most also were “ostensibly enrolled” in MJI’s study abroad program.
The DOE letter has further examples that show — from a small sampling of former students — how some U.S. students admitted they “were connected to MJI on paper only for the purpose of securing religious education overseas.”
The majority of MJI’s estimated 2,000 students are American citizens living and studying in Israel at yeshivot and seminaries, who are supposed to take online courses as part of MJI’s study abroad program. The majority receive Pell Grants, which can provide more than $5,000 to each American student. The grants help low-income students pay for college. The JN reported in 2013 that about $2,650 is retained by MJI for administrative fees; the rest goes to host schools, MJI had said.
Kasriel Shemtov, also rabbi at The Shul-Chabad-Lubavitch on the Campus of Living Judaism in West Bloomfield, would not respond to questions submitted by the JN. He did, however, issue a statement through Mort Meisner, MJI’s public relations consultant. (See statement for the press.)
The JN also obtained a copy of MJI’s written “Statement to MJI Students” (Statement to MJI students) dated March 1 in which the college expressed surprise at receiving the DOE letter.
“After having been considered an eligible institution by the Department of about 17 years, MJI’s eligibility has been terminated without due process,” the statement, simply signed Michigan Jewish Institute, said. “Instead we have been offered the very limited opportunity to submit [by March 10], to the person who rendered this decision, any factual information we possess in rebuttal. MJI has already begun the task of preparing a written response to the Department.
“The Department’s action is extremely harmful and unfair,” MJI’s statement read. “MJI will contest the action to the fullest extent possible.”
The statement also stated, “MJI believes it is and has been in compliance” with rules of the DOE and MJI’s accrediting agency, the Accrediting Council of Independent Colleges and Schools (ACICS), and cited a 2014 letter from ACICS stating MJI was “fully accredited and in full compliance with its standards and criteria.”
This last accreditation, good through December 2017, came from ACICS after three deferrals and a critical look at MJI’s records. After receiving a copy of the DOE letter to Shemtov, ACICS president and CEO Albert C. Gray sent the rabbi a letter Feb. 29 directing MJI to show cause why its accreditation status should not be withdrawn.
“As an official accreditor recognized by the DOE, ACICS also has a responsibility to enforce the laws among schools,” said Jake Lynn, a source representing ACICS, a national accrediting agency that handles 850 schools, mostly career-oriented institutions.
“There are a lot of allegations,” Lynn said. “ACICS believes firmly in due process and doesn’t hastily withdraw. [But] to allow a school to misrepresent itself affects them as an accreditor as well. The last thing ACICS wants to do is put students on the streets with lost credit and money. It was nothing the students did, but issues with the administration.”
MJI’s statement to students said it will seek to determine if a “teach out” can be arranged with other schools that could accept students’ current credits and that the school would do everything it could to ensure those credits are transferred to institutions students choose.
Lynn did say that when the government clamps down on federal student aid, it is difficult for many schools to stay afloat financially. He cited two nursing schools in South Florida that closed recently for this reason.
MJI has not closed its doors, although its administrative offices in Southfield are no longer open, Meisner said. A small number of office staff are in place in West Bloomfield on the Chabad-Lubavitch Campus for Living Judaism. Dual enrollment classes for high school students studying Hebrew, the Holocaust and other subjects are ongoing at The Shul.
Near The Shul is the nearly completed three-story, 16,000-square-foot MJI headquarters building that was funded, Kasriel Shemtov told the JN previously, by private donors over many years. The building is designed for offices, a studio for online classes and space for students.
History And Growth
Michigan Jewish Institute was started in 1994, with the goal of serving the Jewish community and educating students to help them get jobs in computer and business information systems, Shemtov said in a previous JN story.
The nonprofit career college says it offers bachelor and certificate programs for students interested in pursuing an education that accommodates their cultural and religious beliefs. MJI says it offers degrees in business, computers and Judaic studies.
In the beginning, MJI focused on two main populations: Jewish Russian immigrants and the Orthodox community. “As soon as they graduated, they got jobs,” Shemtov said at the time.
After 2000, jobs in information technology dried up and the school planned a Judaic Studies program to prepare students to be professionals at Jewish organizations. MJI launched its online program in 2006, which was accredited by ACICS in 2009.
The online program generated “enormous interest from Orthodox communities throughout the world. This interest has resulted in a substantial increase in MJI enrollment,” Shemtov had said.
Only 42 students were enrolled at MJI before the online program started; now there are an estimated 2,000.
Many students wanted the opportunity to study for a year in Israel at a yeshivah or seminary and earn credits toward their degrees, Shemtov said in 2013. He added that working closely with host schools in Israel, students who participate in the MJI Study Abroad Program may earn additional credits per year toward their bachelor’s degrees.
However, according to the DOE letter to MJI, this became an issue because “MJI turned the notion of a study abroad program on its head and demonstrated it was awarding Pell Grants to students who were not ‘regular students’” — those enrolled or accepted for enrollment in an institution for the purpose of getting a degree or certificate offered by that institution.
“The evidence the department has reviewed shows that many, if not most, of MJI students had no interest in obtaining, or intention of receiving, a degree or certificate offered by MJI.”
Jessica Fidler, a former MJI employee, says she is not surprised by the DOE’s actions to cut off student aid, she told the JN this week. At the end of 2012, she filed a report with the DOE about some of the things she discovered there.
A native Detroiter, Fidler lived in Israel for almost nine years before returning home. She was hired by MJI in late 2012 because of her fluency in Hebrew.
“They needed someone who spoke Hebrew because the majority of students were Israeli kids with parents who are Americans,” she said. “I talked to a few students who didn’t know a word of English. That’s when I started questioning things.”
She says she was given all student transcripts from the past year to prepare for MJI’s accreditation renewal. She claims the transcripts showed some students took the same course several times and were granted credits each time.
“That didn’t make sense,” she said, adding that when she started asking questions, she received vague answers. “They would try to come up with different excuses,” she said. “I told them they couldn’t do that.”
Then, after only two weeks, her employment was terminated.
Fidler, who now teaches at an Arizona university, did not hear back from the DOE until May 2015, when a written response directed her to speak to ACICS, MJI’s accrediting agency.
However, the DOE letter supports Fidler’s concerns about full-time Israeli residents receiving Pell Grants, as the letter states, “ostensibly for ‘studying abroad’ in Israel at Israeli institutions.”
“Not a single one of them [between 2006-2012] ever physically attended classes at MJI and none of them graduated from MJI,” the DOE letter to Shemtov stated. More than 25 percent were enrolled in Israeli universities or teacher’s colleges, meaning they did not study briefly at an Israeli institution to enhance their educational experience after enrolling at MJI to obtain a degree from MJI.
The letter also states that some 524 students were “supposedly” enrolled in a MJI computer degree program. “No MJI-supplied computer degree credits are listed on 520 of these 524 transcripts,” the DOE document stated. More than 75 percent earned zero computer-related credits, and many stated they didn’t have a computer.
Other students interviewed by DOE, as outlined in the letter, said they never applied for a Pell Grant, yet records show they received one through MJI.
In the final pages of the lengthy letter, the DOE addresses MJI’s failure to “exercise adequate standards of administrative capability.”
Cited is a Dec. 18, 2012, email from Moshe Klein, president and CEO of Moshe Klein & Associates, an accounting firm in Skokie, Ill., that stated “all associates confirm that thousands of student records . . . contain inaccurate, duplicate or misleading information.”
Klein was, or acted as, an officer of MJI, the document said.
Further paragraphs mention grades and transcript information for students that cannot be verified as accurate and other “recordkeeping shortcomings,” leading DOE to concede that MJI violated administrative standards.
Because of these problems, the letter stated the DOE determined that MJI provided false information to ACICS, its accreditor.
An institution only needs to violate one of three essential Title IV requirements to be denied recertification: not meeting the fiduciary standard of conduct, failure to adhere to regulatory requirements of administrative capability and engaging in substantial misrepresentation.
“… the Department has determined that MJI violated all three of these essential Title IV requirements,” DOE’s letter stated.
By Keri Guten Cohen, Story Development Editor