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The U.S. Department of Education has affirmed its decision barring the Michigan Jewish Institute from receiving federal student financial aid.

In an April 15 letter obtained by The Detroit News, the federal agency responded to an appeal filed by the private, four-year college in West Bloomfield Township, saying it upheld its finding that the school had improperly awarded Pell Grants to students who studied in Israel without intending to earn degrees.

“For an institution to be eligible to receive Title IV funds, it must award those funds only to eligible students,” said the letter from Susan Crim, director of the department’s administrative actions and appeals service group. “... Here, MJI created a scheme with little or no regard for the integrity of the Title IV programs, and the Department, as steward of those funds, must end MJI’s Title IV eligibility.”

The department also said the institute did not maintain proper student records and presented false information to its accrediting agency about the length of time that 248 Pell Grant recipients for 2009-10 were enrolled.

“Following its review of MJI’s contrary contentions, the Department reaffirms is finding in all three areas and concludes that MJI’s rendition of events is inaccurate,” Crim wrote. “Therefore, MJI is informed that the Department’s decision to deny MJI’s recertification application is hereby affirmed and is the agency’s final decision.”

In a statement released on behalf of the institute, officials said their attorneys were reviewing the detailed, 11-page document.

“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,” according to the statement. “For now, MJI can say that we are disappointed and saddened with the Department’s overall decision and regret the devastating (effects) it may have on thousands of MJI students. Finally, when MJI’s attorneys complete a thorough review of DoE’s response and provide their input we may have an additional statement or comment.”

The school was initially notified of the cutoff of federal funds, including student loans and Pell Grants for low-income students, after officials alleged the college fraudulently obtained nearly 2,000 grants for students who studied in Israel but had no intention of getting a degree, according to a Feb. 26 letter to Rabbi Kasriel Shemtov, the institute’s president.

“MJI claims, apparently, that all of these 1979 students were studying “online,” as opposed to “studying abroad,” as MJI has otherwise represented, and that 570 actually did graduate from MJI, while another 117 are still enrolled, after many years, at MJI,” Crim wrote in her letter to the school. “The documents MJI submits do not corroborate its conclusions.”

Crim said the institute submitted transcripts for 337 students but that the documents “which specifically state whether the students graduated or not – either say ‘no’ on this score, or are blank.”

In a statement last month, the Michigan Jewish Institute denied the government’s allegations of Pell Grant fraud.

“Its decision is inaccurate, relies on hearsay, speculation and information that would not be admitted into any court of competent jurisdiction as credible evidence,” said the statement from Mort Meisner Associates. “It is arbitrary and capricious in the extreme.”

Last July, federal agents seized thousands of documents in more than 130 boxes of files during a raid at the Michigan Jewish Institute and the Shul Chabad-Lubavitch, the affiliated Orthodox Jewish group that houses the college campus. Most of the boxes were filled with student records and included one labeled as “Pell Grant fraud.”

Pell Grants are funds from the federal government for low-income students to mitigate the costs of college and do not have to be paid back.

According to the Department of Education, a Pell Grant recipient must be a “regular” student at a college, meaning the student is enrolled or accepted for an enrollment at a higher education institution for earning a degree, certificate or other credential at that institution.

It is not clear how many federal dollars were funneled to students in Israel. The maximum Pell Grant for the 2015-16 is $5,775 for full-time students.

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