credits earned at Sara Schenirer as transfer students. As Mr. Edelman told you, this is known as the 3IC method of eligibility. After two tries, the Sara Schenirer certification was accepted in lieu of accreditation. The second gate was open. Finally, a school must be financially responsible and satisfy eligibility requirements to qualify for participation in these Federal student aid programs. This determination is made by the staff of the U.S. Department of Education's Washington, D.C. office. In the case of Sara Schenirer, we were unable to review the Department's financial certification file for the school, because it is missing from the Department's files. Repeated attempts by the Department to locate the file were fruitless. Chairman NUNN. Was that an exception or were there a number of files missing? Mr. BUCKLEY. Senator, as we testified in 1990, the certification and eligibility files at that time, there were literally hundreds of schools which the files were lost or had been misplaced. At that point the two offices were not communicating certification— Chairman NUNN. What two offices? Mr. BUCKLEY. The certification office and the eligibility office. Mr. BUCKLEY. Yes. Since then, the Department has reorganized that effort and put all those people together and is moving all those files together. I understand that every day as they go through the files and put them in a new filing cabinet, they are finding files they have been missing for at least a decade. So maybe Sara Schenirer's file will turn up some day. It could be just misfiled. We are unable to determine how Sara Schenirer Teachers Seminary was deemed eligible under the law, because it was not licensed or recognized by the State of New York; did not confer degrees; and its courses were not designated to prepare students for gainful employment in their recognized occupation. The Department apparently evaluated the programs and made a determination that "these teacher training seminaries are comparable to similarly accredited bachelor-degree granting institutions in the United States." We note, however, that Sara Schenirer does not confer degrees. Regardless, the third and final gate was open. On December 3, 1988, the Accrediting Council for Continuing Education and Training, ACCET, of Richmond, Virginia, accredited Sara Schenirer Teachers Seminary, ending the 3IC debate for the school. Mr. Chairman, the Staff points out, however, that the Department use the accreditation as part of its rubber stamp approval process. The Department did not know until 1993 that ACCET accredits avocational schools, such as this one. According to its course catalog, Sara Schenirer Teachers Seminary operates the following programs Judaic studies certificate program at 64 semester hours; Judaic culture certificate program at 64 semester hours; and offers Judaic culture diploma program at 56 semester hours. In addition, the school has operated a special education program and had a foreign branch in Israel, Seminar Yerushalayim, a full-day seminary for female, American students. As is evidenced by the volume of Pell Grants, the seminary's enrollment started to build in 1988 and then grew dramatically. We believe that most of this growth can be attributed to the immigrant culture program which offers the Judaic culture certificate and diploma programs. According to the school's catalog and filings made with its accrediting body asset, the immigrant culture program is designed to educate recent immigrants. "The American scene was in recent years suddenly faced with the arrival of an influx of immigrants from such countries as Russia and Iran, where individuals of Jewish faith have not had the opportunity to study and practice their rich heritage and culture. As they arrive on the free shores of the United States, their interest to learn about the history, culture and intellectual underpinnings of their religious heritage is suddenly awakened. Sara Schenirer Teachers Seminary, in response to this need has created the immigrant culture program, the purpose of which is to fill this burning intellectual and spiritual need through a program of academics designed to mold the student culturally and acclimate him to the American-Jewish scene." 1 While the Staff certainly acknowledges a person's right and choice to study his or her religious heritage, we strongly question whether these types of nonvocational, non-degree granting programs satisfy the intent or policy goals underlying the Federal Pell Grant program. We question the fact that the Federal Government paid Sara Schenirer millions of dollars in the last 2 years to put this program on, a program which pays its students to attend its classes, in which for those who complete it, result in a certificate that has no recognition or marketability. By offering the English language lessons to Russian immigrants in the Bronx, the school came to the attention of Don Bluestone, the director of a community center there. The Staff interviewed Mr. Bluestone who subsequently provided the Subcommittee with an affidavit which the Subcommittee is releasing this morning. Mr. Bluestone testified 2 that some of the services offered at his community center are specifically designed to help recent immigrants in getting settled in the United States. His center's Russian-Jewish settlement and outreach center provides help with apartments, jobs, social clubs, child care and training. The center offers free classes in basic English to immigrants. Bluestone said that in 1991, his center was providing free English classes to approximately 100 Russian immigrants. He used volunteer instructors to teach basic survival English to the Russians, because there was and is a real need for it in the community. At that time, Bluestone spread the word that he needed more volunteer English teachers. Bluestone stated that Sara Schenirer Teachers Seminary responded to the call. Bluestone said that an employee of Sara Schenirer called him and told him that Sara Schenirer would teach English to the immigrants and using Government student aid provide the students with a stipend. A cash payment of $400 per year, per student to attend. There would be no cost to the student or the center and no cost for Sara Schenirer to use the center's facilities. In fact, Sara Schenirer would be receiving Federal Pell Grant funds for this service. 1 Exhibits Nos. 15 and 16 retained in Committee files. 2 See Exhibit No. 30 on page 264. The Federal Government would now be paying $1,200 per student, per semester for the same course Bluestone had previously provided at no cost on a volunteer basis. Of that amount, $1,200, $200 was paid to each student per semester. In the fall of 1991, Bluestone said Sara Schenirer enrolled hundreds of Russian immigrants in English classes at the community center. Employees assisted the immigrants, many of whom were elderly and not very well educated in filling out forms, including Federal Pell Grant applications provided by the representatives of Sara Schenirer. I just want to point out here that the Federal Pell Grant student aid application, for that matter, is entirely in English. There are no Russian translations of it available, and all of the catalogs and advertisements that we have seen from Sara Schenirer have been in English. The students were happy with the instruction and very happy that they were being paid to attend the classes. Bluestone said, however, that things changed. He began hearing through his employees that some of the immigrants were confused. Upon inquiry, Bluestone said that he had learned that Sara Schenirer was teaching not only English but Hebrew as well. He wondered how elderly Russians were supposed to learn two very distinct and complex languages at the same time. His concern grew into alarm when he was told that the students were not only being taught about Judaic history, but were also being forced to convert to orthodox Judaism. Bluestone stated he raised these concerns with the instructors and things appeared to return to normal. Bluestone said that the semester ended in the summer of 1992 without incident. In the fall of 1992, Bluestone began to wonder why Sara Schenirer had not returned to offer the English classes. He learned that the school had moved its English and Judaic studies programs to a synagogue and then later to another community center in the Bronx. Bluestone told the Staff that he thinks that Sara Schenirer is exploiting the Russian immigrant population by using Federal Pell Grants to pay the immigrants to attend its classes. Senator COHEN. Can I interrupt you? I do not think he is exploiting the Russian immigrant classes; I think he is exploiting the Federal taxpayers. This is another form of welfare that is being extended to new immigrants coming into the country that is not being supervised by HHS and it is not being supervised by the Department of Education. Chairman NUNN. And the worst of it is the Russian immigrants are not getting most of the money. Most of the money is going to unknown, at this stage, sources, except what we have seen on the charts. If it was going to be a welfare program, you could do it much more efficiently with much more help to the beneficiaries than the way this one is being ripped off. Mr. BUCKLEY. Yes, sir, I would agree, at a very high cost. We contacted several schools in the Washington, D.C. area which offer training to immigrants and people that want to learn English as a second language. It costs $8 an hour to attend classes in English. If you want a private tutor, one-on-one, it is only $30 an hour. So for $2,400 you could get, I would assume, quite extensive education in the English language, instead of what these people are getting here which is just survival English. The Staff has learned that Sara Schenirer's practice of paying students to attend classes is not unique and may be a growing phenomena in the New York area. The General Accounting Office, using the Pell Grant data for 37 Judaic schools in the New York area, found over 140 students who had received Pell Grants from four or more schools from 1987 to 1992. The Staff considers this rather odd, because as best we are able to determine these schools offer basically the same type of programs and classes-English as a second language and Judaic history. For the same period, 1,335 students had attended three or more schools. The data appears to disclose that the practice is not limited to recent Russian immigrants, since for some of the schools, the base appears to be made up of members of the ultra-orthodox local Jewish community. We also note in detail in our full statement. Our interviews of some of these students disclosed inconsistencies between their academic and financial aid files at these different institutions. Moreover, some of these students told us that they had never heard of nor attended some of the schools for which, according to the Department of Education records, the schools received Pell Grant funds in their names. We interviewed several former students of Sara Schenirer Teachers Seminary who confirmed that they had paid no tuition to attend the school, but had received payments to attend classes. Several students stated that they needed the payments to survive financially and some indicated they would not attend classes if they were not paid to do so. This practice seems to guarantee, not only attendance, but students who return for another semester. And who would not? The Staff did interview two students of Sara Schenirer who stated they had attended the school. One even knew that the Federal Government had paid for his tuition. What remains unexplained is why or how students appear to attend so many different schools to learn the same subjects. The Staff feels that the Pell Grant program contains a systemic weakness that awards this bizarre practice. There is no limit on the number of years for which a student may receive a Pell Grant. That is, as long as a student never receives an undergraduate degree, has a financial need and attends an approved institution, the student may receive Pell Grants for ever. The Government assumes students want to graduate. We do not assume a student would go from school-to-school taking the same courses over and over again. That alone, however, does not explain how these students knew to bounce from school-to-school. We did not know if these schools were collaborating, shifting their students from school-to-school or if the students somehow shopped from school-to-school to find out who was paying the largest stipend. The General Accounting Office learned, however, that some of the schools used Pell Grant brokers to enroll students and we were told that these independent salesmen would broker-student biographical enrollment information to the highest bidding school. Mr. Chairman and Senator Cohen, we realized that many questions pertaining to Sara Schenirer's participation in the Federal Pell Grant program remain unanswered. Given the wholesale lack of cooperation by the school during this inquiry and the abuses we have uncovered, the Staff recommends that the Department of Education bar the school and its officers and directors from participation in the Pell Grant program and refer the matter to the Inspector General, the FBI, and the Internal Revenue Service for further investigation. Mr. Newton will now give a summary of the Staff's investigation of Molloy College. TESTIMONY OF SCOTT E. NEWTON, INVESTIGATOR, Mr. NEWTON. Senator, as part of the Staff's review of the Pell Grant program, we examined the rapid growth in recent years of Pell Grant funding at Molloy College, a private, nonprofit college in New York State. Molloy was founded that in 1955 and is located in Rockville Centre, Long Island, New York. Molloy is a college in a traditional sense of the word, with a campus, honor societies, and athletic programs. The college offers over 30 undergraduate degrees and a master of science degree in nursing. The school gained accreditation from the Middle States Association of Colleges and Secondary Schools in 1967. Enrollment has grown from around 40 in 1955 to over 3,000 undergraduates in 1992. Beginning in 1987, the school began offering what the college called the associate degree program for recent immigrants at over 40 independently operated locations in the New York City area. This program awards an associate's degree in liberal arts and caters primarily to Russian immigrants. The associate's degree in liberal arts is offered at the main campus, as well, and normally requires 2 years to complete. The associate degree program for recent immigrants requires 3 years to complete the same framework of courses, because of the addition of two semesters of English as a second language. Molloy's enrollment doubled in a 6-year period, primarily as a result of the influx of students enrolling in the associate degree program for recent immigrants. Moreover, the school's receipt of Pell Grant funds increased substantially, tripling in just 2 years, as a direct result of the development and growth of this program.1 The Department of Education and the New York State Comptroller's office, on behalf of the New York State Education Department, conducted audits and reviews of this particular program which raised a number of questions concerning the school's participation in the Pell Grant funding program. The New York State Education Department, within the past 2 weeks, has found the associate degree program for recent immigrants significantly different from the State approved program on campus, leading for the program being declared ineligible for student financial aid funds. If this finding is upheld, Molloy faces having to repay all or part of the $16 million in Federal and State tuition assistant grants disbursed to the associate degree program for recent immigrant students. The Staff undertook its own case study of Molloy's associate degree program and found the following. Rapid growth of the off-campus associate degree program for recent immigrants led to large increases in the amount of Pell Grant funds disbursed to the school and provided significant profits for the school and the organizations 1 See Appendix I to Staff statement, page 193. 73-880 0 - 94 - 3 |