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PLATT COLLEGE OF COMMER., INC. v. CAVAZOS

June 12, 1992

PLATT COLLEGE OF COMMERCE, INC., Plaintiff,
v.
LAURO F. CAVAZOS, SECRETARY OF EDUCATION, et al., Defendants.



The opinion of the court was delivered by: JOHN H. PRATT

 Before the Court are cross-motions for summary judgment. For the reasons stated below, we will deny plaintiff's motion for summary judgment and grant defendants' motion for summary judgment.

 Plaintiff Platt College of Commerce, Inc. ("Platt"), which has its main campus in St. Joseph, Missouri, is a for-profit provider of post-secondary educational courses. In addition to its campus programs, Platt offers drafting technology and paralegal courses off-campus for incarcerated students at nine correctional facilities in Missouri, Louisiana, and Kansas.

 Platt is a participant in the Pell Grant financial assistance program, through which it awards federal grants administered by the United States Department of Education (the "Department") to its students. All Pell funds awarded by Platt to its students are ultimately received by Platt as payment of its tuition and fees, and the Department reimburses Platt for all Pell Grants properly awarded. This dispute arises out of an administrative determination that Platt overpaid Pell Grants to some of its students in its prison extension programs. *fn1" Plaintiff challenges this determination.

 The Pell Grant Program

 The purpose of the Pell Grant Program is "to assist in making available the benefits of postsecondary education" by, inter alia, "providing [Pell] grants to all eligible students. . . ." 20 U.S.C. § 1070(a) (1982). The statute requires the Secretary of Education (the "Secretary") to "pay to each eligible student . . . for each academic year *fn2" during which that student is in attendance at an institution of higher education, as an undergraduate, a basic grant in the amount for which that student is eligible. . . ." 20 U.S.C. § 1070a(a)(1)(A) (1982).

 The size of a student's Pell Grant for an academic year is based upon three variables: the maximum grant for that year, the student's cost of attendance for that year, and the amount of funds appropriated to carry out the Pell Grant Program for that year. 20 U.S.C. §§ 1070a(a), (b) (1982). During the years at issue in this case, the statute specified that: (1) the amount of the basic grant for an eligible student for any academic year shall be $ 1800 less the amount of expected family contribution for that year, 20 U.S.C. § 1070a(a)(2)(A)(i) (1982), modified by Pub. L. 97-92, § 124, 95 Stat. 1197 (1981) and Pub. L. 97-377, § 101(e)(1), 96 Stat. 1897 (1982); and (2) the amount of a Pell Grant for any academic year shall not exceed 50% of the actual cost of attendance *fn3" for that year, 20 U.S.C. § 1070a(a)(2)(B)(i)(I) (1982).

 The applicable regulation defines academic year as follows:

 Academic year: (1) A period of time in which a full-time student is expected to complete the equivalent of at least two semesters, two trimesters or three quarters at an institution which measures academic progress in credit hours and uses a semester, trimester or quarter system; or

 (2) A period of time in which a full-time student is expected to complete at least 24 semester hours of 36 quarter hours at an institution which measures academic progress in credit hours but does not use a semester, trimester or quarter system; or

 (3) At least 900 clock hours of training for each program at an institution which measures academic progress in clock hours.

 34 C.F.R. § 690.2 (1984). If the tuition and fees charged a student were for an educational program longer than or less than one academic year, an additional calculation (i.e., a proration) is required by the regulations to determine the amount of those tuition and fee charges that pertained to an academic year. Under 34 C.F.R. § 690.55 (1984),

 The cost of attendance for a student who is charged tuition and fees for a program whose length is greater than or less than the length of the academic year at the institution, is determined by adding --

 (a) Tuition and fees X (clock or credit hours in the academic year / clock or credit hours in the program);

 (b) Room and board costs . . .; and

 (c) An allowance . . . for books, supplies and miscellaneous expenses.

 Once the total amount of the Fell Grant is determined, the student's award for a payment period *fn4" must be computed under 34 C.F.R. § 690.65(a) (1984). This is generally done by dividing ...


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