Michigan Jewish Institute Loses Federal Appeal

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The institute is no longer eligible for federal financial aid.

The U.S. Department of Education has held firm in its decision earlier this year to deny the Michigan Jewish Institute (MJI) in West Bloomfield recertification to federal Title IV financial aid programs.

MJI filed a 33-page response to DOE allegations of widespread and long-term Pell Grant fraud after the federal department first denied the school recertification in a letter it sent to Rabbi Kasriel Shemtov, MJI president, on Feb. 25.

In an 11-page letter sent to Shemtov April 15, the DOE said the denial is now “a final agency decision” and that MJI is ineligible to participate in Title IV programs.

Pell Grants are federal aid given to low-income students to help the pay for college costs. Unlike loans, they do not have to be repaid. For the current academic year, a maximum Pell Grant is $5,775.

In its letter, the DOE stands by its reasons for denial: MJI breached its fiduciary duty to the DOE by awarding Pell Grant funds to students who were not “regular students” as required; that MJI failed to exercise required standards of administrative capability by not maintaining consistent and reliable student records; and that MJI presented false information to its accrediting agency.

Rabbi Kasriel Shemtov

“The Department’s requirements are really not that all that remarkable,” the letter stated. “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.”

In painstaking manner, the DOE letter outlines why it discards each of the school’s defenses in its recent appeals letter that includes transcripts and records. Federal agents last July seized more than 100 boxes of files from MJI administrative offices in Southfield.

MJI, in a statement issued April 20, said, “We are disappointed and saddened with the Department’s overall decision and regret the devastating affects it may have on thousands of MJI students.”

MJI attorneys are reviewing the letter. The statement also said, “We note that the Department’s letter does leave the door open for MJI to re-apply for Title IV, HEA program certification in the future, and we are considering that potential.”

The nonprofit Michigan Jewish Institute is part of Chabad of Michigan, which maintains the Campus of Living Judaism in West Bloomfield, also home to The Shul, an Orthodox synagogue headed by Kasriel Shemtov. A nearly finished three-story MJI headquarters, funded by private donors, is also located on the campus.

Started in 1994, MJI at first focused on the Orthodox community and Jewish Russian immigrants. The school launched its online program in 2006, and received accreditation in 2009. Rapid growth occurred because of the online program, with the majority of its estimated 2,000 students studying in Israel in its Study Abroad Program.

The DOE noted in its letter that “nearly 2,000 U.S. citizens, who are Israeli residents, received Pell Grants for ‘studying abroad’ at Israeli institutions from 2006-2012 without ever studying or graduating from MJI.”

In another instance involving Pell Grants, the DOE uncovered 87 cases where students were studying religious education abroad, while MJI claimed the students were taking computer-related courses.

By Keri Guten Cohen, Story Development Editor

 

The April 28 issue of the JN will have a more detailed story.

 

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