ORDERED: that the decisions of the defendant terminating plaintiffs' eligibility to participate in the Guaranteed Student Loan Programs as of January 3, 1992, should be, and are hereby, VACATED; and it is further
ORDERED: that this matter should be, and is hereby, REMANDED to defendant who shall promptly review the data submitted by plaintiffs to the guarantee agencies, which include the lists prepared by the accounting firm of Coopers & Lybrand, and furnish plaintiffs with a reasoned decision that addresses that data; and it is further
DECLARED: that plaintiffs shall remain eligible to participate in the Guaranteed Student Loan Programs during the appeals process pursuant to the procedure prescribed in the Department of Education's August 29, 1991, letters to plaintiffs; and it is further
DECLARED: that defendant's obligation to continue plaintiffs' status as eligible to participate in the Guaranteed Student Loan programs during this appeals process is conditioned upon their posting a bond in the amount of 45.1% for Atlanta College of Medical and Dental Careers and 46.6% for Louisville College of Medical and Dental Careers of each loan guaranteed by defendant, according to the terms of the proposed Stipulated Order Establishing Bonding Requirement, a copy of which is annexed hereto and made a part hereof.
Louis F. Oberdorfer
UNITED STATES DISTRICT JUDGE
ATLANTA COLLEGE OF MEDICAL AND DENTAL CAREERS, INC., AND LOUISVILLE COLLEGE OF MEDICAL AND DENTAL CAREERS, INC., A KENTUCKY CORPORATION, d/b/a PHILLIPS COLLEGE OF LOUISVILLE Plaintiffs, v. LAMAR ALEXANDER, SECRETARY OF EDUCATION, in his official capacity Defendant.
CIVIL ACTION FILE NO. 92-0200 (LFO)
STIPULATED ORDER ESTABLISHING BONDING REQUIREMENT
Whereas the Court has this day of March 1992, issued an order vacating and remanding the decision of the Secretary of Education terminating the eligibility of the plaintiff colleges from participation in the Guaranteed Student Loan Program (GSLP), said decision having been originally issued on January 3, 1992; and
Whereas, the parties wish to enter into an agreed Order establishing a procedure whereby each of the plaintiff schools may participate in the GSLP as of the date that the original decision was issued (January 3, 1992) and to protect the defendant from the risk of significant financial loss until such time as a final Order is received in this matter, whether from the District Court or a court of higher jurisdiction; and
Whereas, both parties have agreed that Plaintiffs may post a bond as more fully set out below and that Defendant will accept such a bond as surety against potential financial loss; it is hereby Agreed:
1. At such time as students enrolled at Plaintiff colleges, either singularly or together, are able to obtain loans under the GSLP from appropriate lenders, they or their corporate parent, Phillips Colleges, Inc., will purchase for the sole benefit of Defendant a bond from a bonding company holding a certificate of authority as listed in Treasury Circular 570, or other company acceptable to Defendant, approval of Defendant not to be unreasonably withheld, in the amount of --% of the face amount of each loan certified to students enrolled in either one or both of the plaintiff colleges subsequent to the date of this Order.
2. In establishing the bond, plaintiffs shall only be required to purchase, or increase the amount of, the bond once for all loans certified during each month, such purchase or increase to occur not later than the 30th day after the end of the month in which such loans were certified.
3. Contemporaneous with the purchase or increase of the bond or bonds, Plaintiffs shall provide Defendant, at an office designated by Defendant, with evidence of the issuance of or increase in the bond or bonds together with a listing of the loans subsumed under such bond or bonds, setting forth the principal sum of each such loan and the name and social security number of each borrower.
4. The bond or bonds purchased pursuant to this Order shall remain in effect only so long as a final order in this proceeding has not been issued, or both parties have determined not to appeal said final order. If a timely appeal is taken then said bond or bonds shall remain in effect until a final order is obtained and no further right of appeal exists or until such time as the party or parties having the right to appeal notifies the other that it waives its right of appeal, whichever is shorter.
5. Should Defendant ultimately receive a favorable decision reinstating its January 3, 1992 decision as to either one or both of the colleges, Defendant shall be entitled to the full amount of the bond or bonds. Defendant shall, however, remit to the plaintiffs any amount of the bond which is left after all defaults have been accounted for from all loans issued during the term of this Order.
Robert Shapiro, Esq.
Ass. U.S. Attorney
Attorney for Defendant
Louis F. Oberdorfer
United States District Court
Dated: March , 1992
Jonathan B. Hill, Esq.
Attorney for Plaintiff