2. IME is a Delaware corporation with its principal place of
business in San Jose, California.
IME operates a post-secondary vocational school, which offers
students vocational medical programs in fields such as dental
hygiene, nursing, medical assisting, phlebotomy, and MRI
technology on campuses in San Jose and Oakland, California.
Founded in 2003, IME has a current enrollment of XXX
students and has XX employees. Of IME’s XXX students, 47
students were scheduled to graduate from the Vocational
Nursing program on February 24, 2012, and 25 students were
scheduled to graduate from the Dental Hygiene program on
April 26, 2012.nnulment, paternity, adoption, etc.
3. IME students are currently eligible to receive funding from
federal student aid programs under Title IV of the Higher
Education Act of 1965, 20 U.S.C. section 1070, et seq. (“Title
IV Funding”), which is administered by the United States
Department of Education (“US DOE”).
Almost all of IME’s students receive Title IV funding, and
approximately 80 percent of IME’s current revenue originates
from this source.
To be eligible to participate in Title IV funding programs, a
postsecondary educational institution must be accredited by an
accrediting agency that is recognized by the US DOE.
4. In addition, in order for IME to offer medical vocational
programs to its students, each program must be accrediting by a
field-specific accrediting agency. Each of these field-specific
accrediting agencies requires that IME be accredited by an
accrediting agency that is recognized by the US DOE.
(Statement RE: who was accrediting the program before
WASC?)
In June 2007, IME received its initial accreditation, good
through 2010, from Western Association of Schools and
Colleges – Accrediting Commission for Schools (“WASC
ACS”). (Attach? Not really necessary)
In May 2007, IME filed applications with the Bureau of Private
Postsecondary Vocational Education (“BPPVE”) for approval
of potential programs including an MRI program. BPPVE
stated that, because the agency was closing down and did not
know if or when it would be revived, they could not approve
the program at that time.
5. IME instead requested approval of the program from WASC
ACS, and on or about September 20, 2007, WASC ACS
approved IME’s programs for Licensed Vocational Nursing,
Phlebotomy, Medical Assistant, Physical Therapy Aide and
MRI Technology.
In October 2008, IME became eligible to receive Title IV
funding.
IME submitted its renewal application to WASC ACS, and on
or about July 7, 2010, WASC ACS confirmed that IME had
been granted accreditation through June 30, 2016.
On or about September 23, 2010, WASC ACS sent IME a
verification letter, listing the 23 specific programs that were
accredited by WASC ACS.
6. On or about November 3, 2010, IME received a form letter
from WASC ACS, addressed to “Postsecondary Title IV
Institution Directors”, stating that the USDOE had accepted
WASC’s withdrawal from the Title IV compliance process.
WASC ACS’s November 3, 2010 letter stated that the effected
institutions, including IME, would have 18 months to find an
alternative accrediting agency.
In the intervening time, up to April 26, 2012, the USDOE has
continued and will continue to recognize WASC ACS’s 2010-
2016 accreditation as sufficient to maintain IME’s eligibility
for Title IV funds. (Attach email correspondence with WASC
attempting to appeal/extend the April 26, 2012 date? – not a
super strong document, so it may be better without it. One
WASC email states that the West Coast USDOE office sent out
letters re: the 18 month limit... do we have this letter?)
7. On or about January 5, 2010, IME wrote to Bureau of Private
Postsecondary Education (“BPPE”) inquiring about a possible
application to add degree-granting programs to IME’s course
offerings.
BPPE is an agency within the California Department of
Consumer Affairs (DCA), and over a series of correspondences
with Joanne Wenzel, DCA Staff Services Manager III, Ms.
Wenzel repeatedly stated that, as an educational institution
accredited by WASC, IME was exempt from BPPE oversight
and did not have to have its programs approved by BPPE to be
eligible for field-specific accreditation of its programs. (Attach
emails)
(When??) IME received an invoice from BPPE stating that IME
owed Student Tuition Recovery Fund (STRF) fees for the third
and fourth quarters of 2010, the first quarter of 2011, and an
annual fee for 2010.
8. In response to the invoice, IME filed a request for verification
of exempt status, based on IME’s understanding that being
accredited by WASC ACS exempted IME from BPPE’s
oversight. (Attach – do we have the application?)
Over a series of emails with Nicholas Robinson,
Correspondence and Report Coordinator, Licensing Unit of
BPPE, Mr. Robinson clarified that it had come to BPPE’s
attention that WASC ACS had lost their “recognized
accrediting agency” status with the USDOE and thus IME was
no longer exempt from BPPE’s oversight and would need to
pay the required STRF fees. (Attach? – again, not a super
strong email, but maybe.)
Based on the representations of Mr. Robinson, IME was
uncertain about their status as an exempt agency, and thus
withdrew the application for verification and paid the required
STRF fees.
9. Several months later, in November 2011, BPPE representatives
made an unannounced inspection of IME’s offices, copying
admissions files, and meeting with Sunil Vethody, the Chief
Executive Officer of IME, to ask about the pending loss of
Commission on Dental Accreditation (“CODA”) accreditation
for the Dental Hygiene program, WASC ACS accreditation and
WASC ACS’s withdrawal from the Title IV compliance
process, approval for the Ultrasound and MRI programs,
student complaints, and the requirement that IME pay STRF
fees following WASC ACS’s withdrawal from USDOE.
10. BPPE’s representatives, Jennifer Jones and Steve Nichols,
returned to IME in December 2011 to meet with Mr. Vethody.
Mr. Vethody showed BPPE’s representative the emails
confirming IME’s exemption from BPPE oversight, at least
prior to WASC ACS’s withdrawal from USDOE Title IV
compliance process, and spoke with the BPPE representatives
at length about WASC ACS’s approval of the MRI and
Ultrasound programs in 2007. At that time, the parties agreed
that, as the programs were previously approved while IME was
exempt from BPPE (BPPVE) oversight, IME did not need to
apply to BPPE for a renewed approval of the programs.
11. On or about February 2, 2012, IME received notice that CODA
was withdrawing accreditation of IME’s Dental Hygiene
program.
On February 3, 2012, IME discontinued the Dental Hygiene
program for the junior class. (IME only discontinued for the
junior class – Did CODA offer to accept the students about to
graduate?)
IME did not hear anything further from BPPE, and on or about
February 10, 2012, Mr. Vethody wrote to (WHO?) to enquire
about the status of the investigation and/or to request a copy of
any investigation report that had been issued.
12. (Named Person) did not respond directly to Mr. Vethody, and
instead, on February 13, 2012, BPPE sent IME an Emergency
Decision (“Decision”) ordering IME to 1.) Cease enrollment of
new students in all of IME’s programs; 2.) Cease instruction for
all of IME’s programs; and 3.) Cease collection of tuition or
fees for all of IME’s programs, with the orders to become
effective on February 16, 2012.
Pursuant to California Code of Regulations, Title 5, Section
75150(d), IME requested an opportunity to be heard before the
effective date of the Decision.
On February 14, 2012, IME appeared before DCA’s Chief
Deputy Director, Awet Kidane, to contest the Decision.
13. Having heard IME’s arguments against the Decision, Mr.
Kidane determined that “Because IME has lost its institutional
accreditation, cannot demonstrate that it has sufficient funds to
operate at this time, and is has [sic] not either closed or
operated certain programs with approval, there is an immediate
danger to the public health, safety, or welfare of the students if
IME continues to enroll and instruct its students.”
Accordingly, Mr. Kidane upheld the Decision, with the orders
becoming effective on February 16, 2012.
Arguments:
IME has not lost its institutional accreditation.
14. While set to become ineffective as of April 26, 2012, IME’s
WASC ACS accreditation continues to be recognized by the
USDOE as sufficient compliance to receive Title IV funds. If,
in fact, WASC ACS’s accreditation had been invalidated the
day WASC ACS sent written notice to schools that the USDOE
had accepted its withdrawal from the Title IV compliance
process, countless schools throughout the state would have lost
their accreditation and been subject to immediate closure for
failure to comply with the accrediting requirements.
15. This would have been an absurd and unjust result of WASC
ACS’s voluntary action, and accordingly, that is not the actual
result of WASC ACS’s notice of withdrawal from Title IV
compliance. Instead, WASC ACS’s notice, as authorized by the
USDOE, allowed educational institutions 18 months, through
April 26, 2012, to seek alternative accreditation. Accordingly,
IME continues to be accredited by an agency that is recognized
by the USDOE, as required under Education Code section
94813.
16. Considering the difficulty of the process, IME does not, at this
time, expect to have alternative accreditation in place prior to
April 26, 2012. Accordingly, IME cancelled classes and
programs for many students who would not graduate in time
and has worked diligently to get students through their
programs prior to the loss of accreditation. Accordingly, IME
has approximately 75 students scheduled to graduate in the next
two months, some as soon as next weekend. And yet, BPPE’s
preemptive decision to close the school, two months before
IME’s accreditation runs, out has cut these students off from
receiving certifications that they worked hard to earn – with 47
students less than one week from graduation.
17. IME is financially solvent and able to meet all current
outstanding financial obligations.
BPPE’s entire argument that IME is financially insolvent is
based on the presumption that, because IME will lose Title IV
funding on April 26, 2012, IME will become financially
insolvent at that time. Again, even if true, BPPE’s Emergency
Decision to close IME because it is unable to fund its
operations comes two months before IME will actually suffer a
loss in Title IV funding.
18. Furthermore, BPPE’s finding that IME is financially unstable
was completely unsupported. BPPE never examined IME’s
financial statements and never spoke with IME regarding their
plans to move forward following the loss of Title IV funds. In
fact, IME, which was fully operational for five years before
ever receiving Title IV funds, has been taking measures to
insure continuing financial stability when Title IV funds run
out. Specifically, IME has reduced staffing, is consolidating
campuses, offering cash paying students reduced tuition, and
generally downsizing the programs to cut costs where possible.
19. Not including the unprecedented impacts of BPPE’s arbitrary
and unfounded closure of the school, IME fully believes that
they are financially stable enough to survive the loss of Title IV
funding after April 26, 2012.
20. Operation of IME’s MRI Program Does Not Require BPPE
Approval.
IME’s MRI program was approved by WASC ACS in 2007,
following the closure of BPPE’s predecessor, BPPVE. On more
than one occasion, BPPE’s own representatives have agreed
with IME that the earlier WASC ACS approval of the programs
meant that IME would not need to submit the MRI program for
a renewed approval process through BPPE.
21. At the time that BPPVE was shutting down, IME has an
application pending for approval of its MRI program. However,
in light of BPPVE’s impending closure, BPPVE was unable to
issue an approval at that time, and IME sought approval of the
MRI program through WASC ACS. When BPPVE was
resurrected as BPPE, Education Code section 94809 provided
that institutions that had an application for approval pending
before BPPVE prior to June 30, 2007 would need to resubmit
the application for the program to BPPE.
22. If that was all, that would be sufficient to have required IME to
resubmitted the MRI program for approval by BPPE. However,
because BPPVE was defunct and IME did not know if and/or
when BPPVE would be able to approve the program, IME
sought alternative approval through WASC ACS. The program
was approved prior to BPPE’s existence and IME’s approval by
WASC ACS was specifically exempted from application of
Education Code section 94809 by Education Code section
94874.1. Accordingly, IME is not and has not ever been
required to resubmit the already approved MRI program for
BPPE approval.
