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Government Bars Jewish Schools From Federal Student Aid Programs With PM-Pell Grant List

October 20, 1993

WASHINGTON (AP) _ The Education Department is moving to eject 21 Jewish schools from federal student aid programs, and one official called their receipt of millions of dollars a fraud that went undetected for years because of lax enforcement.

″This clearly was a scam,″ said David Longanecker, assistant secretary for post-secondary education. The schools used the federal government as a source of funds to finance ″other activities in which they were engaged,″ he said. ″It clearly was a way to rip off the federal government.″

The Education Department said the schools, all but one in the New York City area, were ineligible because the training they provide does not lead to degrees or enhance students’ job prospects. Letters notifying the schools of the action went out Monday, offering them 10 days to respond.

Longanecker said the schools initially were allowed into the program because they appeared to meet all the legal requirements: accreditation, state certification and training that leads to ″gainful employment in a recognized occupation.″

But the accrediting agency for all 21 schools, the Accrediting Council for Continuing Education & Training of Richmond, Va., classifies the institutions as ″avocational,″ meaning their programs do not lead to jobs.

″The schools didn’t tell us, and we didn’t notice,″ Longanecker said.

Efforts to contact officials at the schools for comment were not immediately successful.

Perhaps a dozen or more other schools that also offer programs in Judaic studies continue to be under investigation by the department and more enforcement actions may follow, he said.

Longanecker said the effort to kick the schools out of the program was part of a ″more vigorous management and oversight″ by the department.

The action comes as a federal grand jury in New York and a congressional subcommittee investigate several dozen Hasidic Jewish academies and other private institutions over alleged abuses in the $6.7 billion Pell Grant program.

Some 3.8 million students received an average of $1,763 each last year in Pell grants at 6,300 eligible schools.

Sen. Sam Nunn, D-Ga., chairman of the Permanent Subcommittee on Investigations, said Monday’s move to disqualify the schools is ″long overdue.″

Nunn’s committee has scheduled hearings for next week on abuses and mismanagement in the program, which is the government’s largest cash aid source for students in higher education.

The Education Department didn’t immediately provide a total on how much money had flowed to the schools over the years. But enforcement documents obtained by The Associated Press in August showed several of the schools involved had received millions of dollars.

Senate investigators said they have uncovered hundreds of cases in which schools received federal grants for students who never attended classes.

They said there is evidence, as well, that lists of students and their social security numbers were peddled to schools by brokers and that the names were used repeatedly at different schools.

In some cases, students were paid kickbacks by schools to attend classes or to allow their names to be used on Pell Grant applications, they said.

Often, the schools falsified grant applications, high school diplomas or other documents to support their claims for federal grants, the investigators say.

Nunn said his subcommittee had encountered ″stonewalling″ when it sought information from some of the New York schools. School officials refused to answer questions. And at one, the Traditional Jewish Studies Center in Brooklyn, school officials told Senate aides that the records Nunn had subpoenaed in June were destroyed in a July 8 fire at the school.

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