United States v. Weston Educational, Inc.

10 F. Supp. 3d 1046, 2014 WL 1292407, 2014 U.S. Dist. LEXIS 43116
CourtDistrict Court, W.D. Missouri
DecidedMarch 31, 2014
DocketNo. 4:11-CV-00112-NKL
StatusPublished
Cited by1 cases

This text of 10 F. Supp. 3d 1046 (United States v. Weston Educational, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Weston Educational, Inc., 10 F. Supp. 3d 1046, 2014 WL 1292407, 2014 U.S. Dist. LEXIS 43116 (W.D. Mo. 2014).

Opinion

ORDER

NANETTE K. LAUGHREY, District Judge.

Pending before the Court is Defendant Weston Educational, Inc., d/b/a Heritage College (“Heritage”)’s motion for summary judgment. [Doc. # 212]. For the reasons set forth below, Heritage’s motion is GRANTED.

I. Background

Heritage is a for-profit, post-secondary school with campuses in Kansas City, Missouri as well as several other states. Pursuant to Title IV of the Higher Education Act of 1965 (“HEA”), 20 U.S.C. §§ 1070 et seq., the federal government provides financial aid to post-secondary students, including those at proprietary schools, in the form of grants, loans, and other assistance. Qualifying students use these funds to pay for their tuition and other educational expenses. In order for Heritage’s students to receive Title IV financial aid, Heritage must periodically submit an application to establish its Title IV eligibility and execute a Program Participation Agreement with the Secretary of the Department of Education (“DOE”). Once eligibility is established, Heritage and its students then submit additional applications for specific disbursements of federal financial aid.

Heritage last executed a PPA in February of 2009. The PPA provides, “The execution of this Agreement by the Institution and the Secretary is a prerequisite to the Institution’s initial or continued participation in any Title IV, HEA Program.” By executing the PPA, Heritage certified that it “understands and agrees that it is subject to and will comply with ... the Student Assistance General Provisions set forth in 34 CFR Part 668,” and, more generally, agreed to “comply with all statutory provisions of or applicable to Title IV of the HEA, [and] all applicable regulatory [1050]*1050provisions prescribed under that statutory-authority.” The PPA further requires Heritage to “establish and maintain such administrative and fiscal procedures and records as may be necessary to ensure proper and efficient administration of funds received from the Secretary or from students under the Title IV, HEA programs.”

With respect to the maintenance of records, the applicable regulations, in relevant part, require Heritage to maintain:

(iii) Documentation of each student’s or parent borrower’s eligibility for title IV, HEA program funds;
(iv) Documentation relating to each student’s or parent borrower’s receipt of title IV, HEA program funds, including but not limited to documentation of—
(C) The amount, date, and basis of the institution’s calculation of any refunds or overpayments due to or on behalf of the student, or the treatment of title IV, HEA program funds when a student withdraws; and
(D) The payment of any overpayment or the return of any title IV, HEA program funds to the title IV, HEA program fund, a lender, or the Secretary, as appropriate;
(vii) Documentation supporting the institution’s calculations of its completion or graduation rates under §§ 668.46 and 668.49.

34 C.F.R. § 668.24(c)(1). Section 668.24(f) further provides that each participating institution shall provide access to these records for the purposes “of audits, investigations, program reviews, or other reviews authorized by law.”

Among the records that may be relevant to the distribution or retention of Title IV funds are student grade and attendance records. See §§ 668.34, 668.22. More specifically, a student’s grades are relevant because each student’s continued Title TV eligibility is predicated on the student maintaining “satisfactory academic progress in his or her course of study according to the institution’s published standards of satisfactory academic progress that meet the requirements of § 668.34.” § 668.2(f). Section 668.34(a), in turn, requires Heritage to “establish a reasonable satisfactory academic progress policy for determining whether an otherwise eligible student is making satisfactory academic progress in his or her educational program and may receive assistance under the title IV, HEA programs.” This policy must specify “the grade point average (GPA) that a student must achieve at each [periodic] evaluation” of a student’s academic progress. § 668.34(a)(4)(i). With the exception of students placed on financial aid warning or probation, the policy must provide “that, at the time of each evaluation, a student who has not achieved the required GPA, ... is no longer eligible to receive assistance under the title IV, HEA programs.” § 668.34(a)(7).

Attendance records are relevant to Title IV funds because Heritage is obligated to refund any unearned portion of the federal aid provided to a student if the student withdraws prior to completing the period for which the funds were awarded. Specifically, when a student withdraws who received Title IV assistance, Heritage “must determine the amount of title IV grant or loan assistance that the student earned as of the student’s withdrawal date.” § 668.22(a). Withdrawal may be either official or unofficial, with the latter occurring when a student stops attending for fifteen consecutive school days without official notification. If a student withdraws, Heritage must first determine the student’s withdrawal date, meaning “the [1051]*1051student’s last date of academic attendance as determined by the institution from its attendance records.” § 668.22(b)(1). For the purposes of calculating a Title IV refund, the last date of physical presence at school constitutes the student’s last date of attendance.

Heritage then uses the last date of attendance to calculate the percentage of Title IV financial aid earned by the student, which is based on the percentage of the payment period or period of enrollment that the student completed as of 'the last date of attendance. See § 668.22(e)(2). If the student completed sixty percent or more of the relevant period, the student is considered to have earned one-hundred percent of the finaricial aid. § 668.22(e)(2)(h). If the student completed less than sixty percent of the relevant period, the percentage of financial aid that the student earned is equal to the percentage of the period the student completed. § 668.22(e)(2)(i). In this scenario, the complement percentage of financial aid awarded, i.e. the amount equal to the percentage of the period the student did not complete, must be refunded to the DOE. §§ 668.22(e)(4), (g).

Relator Miller was employed at Heritage’s Kansas City campus from July of 2006 until she resigned on January 7, 2011. Relator Sillman was employed at Heritage’s Kansas City campus from July of 2010 until she was terminated on December 27, 2010. While, employed by Heritage, both Relators made formal complaints regarding what they believed to be Heritage’s fraudulent handling of Title IV funds. Both Relators claim that they were retaliated against and discharged for making these complaints.

Relators subsequently initiated this qui tam action under the False Claims Act, (“FCA”), 31 U.S.C. § 3729

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10 F. Supp. 3d 1046, 2014 WL 1292407, 2014 U.S. Dist. LEXIS 43116, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-weston-educational-inc-mowd-2014.