Transcript Slide 1

Emerging Legal Developments in
Title IV Administration
Presented to
National Association of Student Financial Aid Administrators
Annual Conference
Washington, DC
July 8-11, 2007
Powers
Pyles
Sutter &
Verville PC
Attorneys At Law
1501 M Street, NW, Seventh Floor, Washington, DC 20005
Phone: (202) 466-6550 Fax: (202) 785-1756 www.ppsv.com
Presented by
Stanley A. Freeman
Sherry Mastrostefano Gray
Sharon H. Bob, Ph.D.
Joel M. Rudnick
Washington Merry-Go-Round
Stanley A. Freeman
Powers
Pyles
Sutter &
Verville PC
Attorneys At Law
Washington Merry-Go-Round
From The Founding Fathers - Three
Branches Of The Federal Government:

Article I of the Constitution – Legislative

Article II – Executive Branch

Article III – Judicial Branch
Washington Merry-Go-Round
Legislative Branch – A “Perfect Storm”
Of Bills Affecting Student Aid




Student Loan Sunshine Act (H.R. 890,
passed House in May)
College Cost Reduction Act (House
Reconciliation Bill)
Higher Education Access Act of 2007
(Senate Reconciliation Bill)
Higher Education Amendments of 2007
(Senate HEA Reauthorization Bill)
Washington Merry-Go-Round
Legislative Branch – “Perfect Storm”
Of Bills Affecting Student Aid





House Appropriations Bill for FY 2008
(passed House on June 8)
Senate Appropriations Bill for FY 2008
(Rpted out of Subcommittee on June 19)
Student Aid Reward Act (STAR Act)
Pending: Senate Banking Committee to
tackle private lending
Recurrent: HEA Extension Legislation
Washington Merry-Go-Round
Sample Topics Covered By The “Perfect
Storm” Of Proposed Legislation

Accreditation – Possible Re-write of NACIQI

Student Outcomes and Accreditation

Student Loan Restrictions and Auctions

Independent Student Definition

Transfer of Credit

Due Process in Program Reviews

Pell Grants and Loan Limits
Washington Merry-Go-Round
Executive Branch – Agency Initiatives
Complicate The Outlook

Negotiated Rulemaking Hits Rough Seas:



Accreditation – Secretary Agrees to Cease and
Desist
Lending Rules – Too Little Too Late?
Federal Trade Commission

Chairman’s Recent Letter to George Miller: “Law
enforcement will be a critical part of the FTC’s
response to concerns about private student
loans.”
Washington Merry-Go-Round
Executive Branch – Agency Initiatives
 Education Department Initiates Campus
Security Program Reviews on Clery Act


Watchdog Group – “Security on Campus” –
Steps Up Private Enforcement Efforts
Furor Over Recent Case in Wake of ED
Report:


Report: School defied Clery timely warning
requirements for ten weeks after rape/murder in
dorm was discovered
Potential Sanctions: Fines/Title IV Restrictions
Washington Merry-Go-Round
Judicial Branch: Case Law Takes Sharp
Turn Towards Expansion of
Whistleblower Claims




Appeals Courts Reinstate False Claims Act
Allegations Premised on Title IV Violations
One Case Even Focuses Upon Accreditation
College Lawyers Cite Growing Threat of
Whistleblower Claims on Multiple Fronts
Qui Tam Cases: Filed, But “Under Seal”
and Not Made Known to the Institution!
School – Lender Relationships:
New and Proposed Rules
Sherry Mastrostefano Gray
Powers
Pyles
Sutter &
Verville PC
Attorneys At Law
Prohibited Inducements (34 CFR
682.200)

Lender cannot offer, directly or
indirectly, points, premiums,
payments, or other inducements to
secure FFEL loans.
Prohibited Inducements (NonExhaustive List Per ED)
34 CFR 682.200
 No payments or other benefits to a
prospective borrower in exchange for
applying for or accepting a FFEL loan from
the lender.
 No payments or other benefits to a school,
any school-affiliated organization or to any
individual in exchange for FFEL loan
applications, application referrals, a
specified volume or dollar amount of loans
made, or placement on a school’s list of
recommended or suggested lenders.
Prohibited Inducements - Definitions


The term “other benefits” includes, but is not limited
to:
 preferential rates for or access to the lender's
other financial products,
 computer hardware or unrelated computer
software at below market rental or purchase cost,
and
 printing and distribution of college catalogs and
other materials at reduced or no cost.
A school-affiliated organization is:
 any organization that is directly or indirectly
related to a school and includes, but is not
limited to, alumni organizations, foundations,
athletic organizations, and social, academic, and
professional organizations
Prohibited Inducements

No payment of conference or
training registration,
transportation, and lodging costs
for an employee of a school or
school-affiliated organization
(but see exception).
Prohibited Inducements


No payment of entertainment expenses.
Includes private hospitality suites, tickets to
shows or sporting events, meals, alcoholic
beverages, and any lodging, rental,
transportation, and other gratuities related to
lender-sponsored activities for employees of a
school or a school-affiliated organization (but
see exception).
No philanthropic activities if provided in
exchange for FFEL loan applications or
application referrals, or a specified volume or
dollar amount of FFEL loans made, or
placement on a school’s list of recommended or
suggested lenders.
Prohibited Inducements



No staffing services to a school as a thirdparty servicer or otherwise on more than a
short-term, emergency, non-recurring basis
to assist a school with financial aid-related
functions.
No conducting unsolicited mailings to a
student or a student's parents of FFEL loan
application forms.
No engaging in fraudulent or misleading
advertising with respect to its FFEL loan
activities.
Permitted Activities (Exhaustive
List)
A lender may provide:
 Assistance to a school that is comparable
to the kinds of assistance provided to a
school by the Secretary under the Direct
Loan program, as identified by the
Secretary in a public announcement, such
as a notice in the Federal Register.


Most recently published in August 1999
Issue of LCD – will direct loan schools demand
the type of services that FFEL lenders can and
would provide?
Permitted Activities

Support of and participation in a
school’s or a guaranty agency’s
student aid and financial literacyrelated outreach activities, provided
that lender name is disclosed and
lender does not promote its student
loan or other products.
Permitted Activities

Meals, refreshments, and receptions
that are reasonable in cost and
scheduled in conjunction with
training, meeting, or conference
events if those meals, refreshments,
or receptions are open to all training,
meeting, or conference attendees;
(Exception to prohibition regarding
entertainment expenses.)
Permitted Activities


Toll-free telephone numbers for use by
schools or others to obtain information
about FFEL loans and free data
transmission service for use by schools to
electronically submit applicant loan
processing information or student status
confirmation data.
Reduced origination fees in accordance with
§682.202(c) and reduced interest rates as
provided under the HEA, and payment of
federal default fees.
Permitted Activities


Other benefits to a borrower under a
repayment incentive program that
requires at least one or more scheduled
payments to receive or retain the benefit;
and
Items of nominal value to schools, schoolaffiliated organizations, and borrowers
that are offered as a form of generalized
marketing or advertising, or to create
good will.
Additional Permitted Activities –
Guaranty Agencies (34 CFR 682.401)

Meals and refreshments that are
reasonable in cost and provided in
connection with guaranty agency
provided training of program
participants and elementary,
secondary, and postsecondary school
personnel and with workshops and
forums customarily used by the
agency to fulfill its responsibilities
under the Act;
Additional Permitted Activities –
Guaranty Agencies

Travel and lodging costs that are
reasonable as to cost, location, and
duration to:



facilitate the attendance of school staff in training
or service facility tours that they would otherwise
not be able to undertake, or
participate in the activities of an agency's
governing board, a standing official advisory
committee, or in support of other official
activities of the agency;
Default aversion activities approved by the
Secretary under section 422(h)(4)(B) of the
Act:
Preferred Lender List (34 CFR
682.212)
What is it?
Any recommendation or suggestion
of lenders (in print or any other
medium or form) for use by the
school’s students or their parents.
Preferred Lender List
Guidelines:
 Cannot be used to deny or otherwise impede a
borrower’s choice of lender;



Impede means to purposefully delay (see
unnecessary certification delays standard).
Cannot contain fewer than three lenders that
are not affiliated with each other and that will
make loans to borrowers or students attending
the school; and
Cannot include lenders that have offered, or
have been solicited by the school to offer
inducements
Preferred Lender Lists

A school that provides or makes available
a list of recommended or suggested
lenders must:


Disclose as part of the list, the method and
criteria used by the school in selecting any
lender that it recommends or suggests;
Provide comparative information to prospective
borrowers about interest rates and other
benefits offered by the lenders;
Preferred Lender Lists



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Ensure that any benefits offered to borrowers
by the lenders are the same for all borrowers
at the school;
Advise students through a prominent
statement that they are not required to use
one of the school’s recommended or suggested
lenders;
Cannot not assign a first-time borrower’s loan
to a particular lender; and
Cannot cause unnecessary certification delays
for borrowers who use a lender that has not
been recommended or suggested by the
school. (See also pattern or practice language
under 34 CFR 682.603(f).)
Enforcement - NPRM



Temporary or permanent exclusion from programs
as eligible lender. (34 CFR 682.705 and .706)
 Rebuttable presumption – to rebut, but provide
evidence that the activities or payments were
provided for a reason unrelated to the securing of
FFEL applications.
A guaranty agency may not make a claim to ED
regarding a loan if the lender offered or provided
an improper inducement. (34 CFR 682.406)
Lender subject to claims borrower may have
against school if, minimally, the school refers
borrowers to that lender or an inducement was
provided. (34 CFR 682.209)
New York SLATE

Prohibitions cover:




All institutional employees
All educational loans (Federal and private)
Guarantee Agencies
Lenders and affiliates that make loans
New York SLATE





No revenue sharing is permitted between lenders
and schools.
Schools must implement a code of conduct
prohibiting lender gifts to employees.
Effectively, financial aid employees cannot serve
on lender advisory boards with respect to any
form of student loans.
FA employees will need to report to NYSED all
participation or financial interests they have
related to any lender.
Schools must inform students of availability of
Title IV loans, including terms and conditions,
before a lender can offer a private loan.
New York SLATE

A lender and school cannot enter
into an agreement under which the
lender makes high risk
(opportunity) loans to students in
exchange for the school providing
concessions or promises to the
lender that may prejudice other
borrowers.
New York SLATE

Preferred lender lists are allowed.
 school must explain method and criteria for
selection and rank criteria
 must state (in same font size) that student can
use another lender without penalty
 inclusion and placement of lenders on the
preferred lender list must be based solely on
the best interests of the borrowers
 school must review list(s) at least annually
 school must seek assurances that advertised
benefits upon repayment will continue upon
sale of loan(s)
 sale of loans shall be disclosed (same font)
New York SLATE


Penalties
 lender can be fined up to $50,000
 school employees can be fined up to $7,500
 if lender violates this law, the lender cannot be
placed on any preferred lender list unless
notice of such violation is provided to all
potential borrowers at the institution
NY defines "lender" to include guarantee agencies
and any trade or professional association that
receives money from a lender or guaranty agency
for educational loan purposes.
Senate HEA Bill - Proposed


Bottom Line – substantially scales back
original proposals; mixture of NPRM and
SLATE
Addresses School/Lender relationships
with respect to FFEL loans only.


Possible involvement of Banking Committee,
FTC
May require changes to Final Rules issued
by ED.
Senate HEA Bill - Proposed

Specifically addresses:



Issues identified in NPRM
Consulting arrangements (prohibited
for FA employees or those school
responsible for student loan decisions)
Compensation for service on advisory
boards (prohibited – but
reimbursement for expenses allowed)
Senate HEA Bill - Proposed

Would require code of conduct to


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
Prohibit revenue sharing
Prohibit gifts and trips except allows
reasonable expenses for professional
development that will improve programs and
for domestic travel to such development
Prohibit consulting arrangements
Prohibit payment for service on advisory board
except for reimbursement of reasonable
expenses.
Would require annual attestation of
compliance by executive officer.
Senate HEA Bill - Proposed

Preferred lender lists
 Disclosure by school of why lenders are
included on list
 Student choice
 At least 3 unaffiliated lenders
(Secretary to maintain list of lenders)
 Factors considered for inclusion can
include loan terms, high-quality
customer service, additional benefits
(obviously, not prohibited benefits).
Senate HEA Bill - Proposed

Enforcement – per program
participation agreement, violation
can result in institution’s limitation,
suspension or termination from loan
programs.
Title IV Hardball With PPSV
Title IV Hardball With PPSV
Issue 1:
Preferred Lender Lists
Title IV Hardball With PPSV
Issue 2:
Revenue Sharing
Title IV Hardball With PPSV
Issue 3:
NASFAA/Cuomo Apology and Code
of Conduct
Title IV Hardball With PPSV
Issue 4:
Direct Lending vs. FFELP
Title IV Hardball With PPSV
Issue 5:
Lender Auctions
Title IV Hardball With PPSV
Issue 6:
Transfer of Credit
Title IV Hardball With PPSV
Issue 7:
Campus Security
Title IV Hardball With PPSV
The End!
Top Ten Negotiated
Rulemaking Issues
Sharon H. Bob, Ph.D.
Powers
Pyles
Sutter &
Verville PC
Attorneys At Law
ED Conducts Negotiated Rulemaking

On August 18, 2006, the Department of
Education announced in the Federal
Register its intent to establish up to four
negotiated rulemaking committees to
prepare regulations under Title IV of the
Higher Education Act (HEA). The notice
also announced a series of four regional
hearings where interested parties could
suggest issues for consideration.
ED Conducts Negotiated Rulemaking

The Department held four field hearings on September
19, 2006, October 5, 2006, November 2, 2006, and
November 8, 2006. Witnesses articulated a number of
overarching themes at the hearings including:
 the need to revisit a number of unworkable rules
governing the Academic Competitiveness Grant
(ACG) and the National Science and Mathematics
Access to Retain Talent Grant (National SMART
Grant) programs;
 the value of the current accreditation process
particularly as it relates to improving student
outcomes; and
 the need to address the rising levels of student debt
through increased student aid and improved
repayment options.
ED Conducts Negotiated Rulemaking

As a result of the comments and
recommendations, on December 8, 2006, the
Department of Education announced in the
Federal Register the establishment of four
negotiated rulemaking committees to:




develop rules for the federal student loan programs
(including the FFEL, Direct Loan, and Perkins Loan
Programs);
address issues related the ACG and the National
SMART Grant Programs;
address accreditation issues; and
address issues related to other Title IV
programmatic, institutional eligibility and general
provisions issues.
Results of Negotiated Rulemaking
Sessions




Loan Issues Go Forward Despite
Non-Consensus
Consensus Reached on General
Provisions Issues
ACG/National SMART Grant Issues
Go Forward Despite Non-Consensus
Accreditation Rules Withdrawn
TOP 10 NEG REG ISSUES
Loan Issues
1. Crime of Identity Theft


There are no proposed regulations for the
crime of identity theft because of
provisions in current regulations under
Loan Discharge for False Certification as a
Result of Identity Theft (§§ 682.402 and
685.215).
“Crime of Identity Theft” means that an
identity theft victim must wait for a
formal judicial determination that an
identity theft crime has been committed
before granting a loan discharge.
Loan Issues
2. Record Retention Requirements on
MPN’s Assigned to ED



Institutions would be required to retain
Perkins Loan Program records showing the
date and amount of each disbursement of
each loan under an Master Promissory
Note (MPN) until the loan is cancelled,
repaid, or otherwise satisfied.
An institution would have to submit
disbursement records on an assigned
Perkins Loan upon the Secretary’s request.
Guaranty agencies would have to submit
the record of the lender’s disbursement of
loan funds to the school for delivery to the
borrower when assigning a FFEL Loan to
the Department.
Loan Issues
3. Perkins Loans: Reasonable
Collection Costs

The Department provided proposed
regulations that would limit the
collection costs that an institution
may assess a Perkins Loan borrower
to 30 percent of the unpaid principal
and accrued interest for first
collection efforts, 40 percent for
second collection efforts, and 40
percent plus court costs in cases of
litigation.
Loan Issues
4. Mandatory Assignment of Defaulted
Perkins Loans


The Department provided proposed regulations
that would require mandatory assignment “at
the Secretary of Education’s discretion” of any
defaulted Perkins Loan to the Department if:
 The amount of the loan is $50 or more;
 The loan has been in default for more than
five years; and
 No payment has been received on the loan
within the previous year.
Exception: If payments were not due on the
loan in the preceding 12 months because the
loan was in an authorized deferment or
forbearance period.
General Provisions
5. Nonterm Clock-Hour Programs
Disbursement Requirements
o
Students enrolled in clock-hour,
nonterm programs would have to
“successfully” complete half of the
clock hours in addition to half of the
weeks in the payment period before
another disbursement can be made.
General Provisions
6. Determining Loan Eligibility for
Nonstandard Term Programs

The Department provided proposed
regulations that would permit students
enrolled in nonstandard term programs
that are substantially equal in length and
are each at least nine (9) weeks long (Per
ED, lowering the nine (9) week time period
would have cost implications) to become
eligible for a new annual loan limit when
the academic year calendar time has
elapsed, which is permitted for standard
term programs.
ACG/National SMART Grants
7. Eligibility of Certificate Programs for
ACG

Current interpretations by ED would
not permit eligibility of certificate
programs for ACG.
ACG/National SMART Grants
8. Academic Year Progression
Measured in Weeks

Academic Year Progression is
measured in credits earned and
weeks of instructional time.
Accreditation
9. Requirements to Measure
Institutional Success

An accrediting agency’s standards
would have to address success with
respect to student achievement in
relation to the institution’s mission,
which must include:

Expected levels of performance for
vocational programs and programs
leading to professional licensure or
certification, including
Completion rates;
 Job placement rates; and
 As applicable, pass rates.

Accreditation
Requirements to Measure Institutional
Success, cont’d…


Criteria may permit institutions to
establish their own expected levels of
performance and agency review of the
appropriateness of the expected levels
of performance.
Criteria may include different standards
for different types of institutions or
programs.
Accreditation
10. Transfer of Credit and Acceptance
of Credentials


The Department provided proposed
regulations that would specify that an
agency’s standards related to admissions
and recruiting practices must address
transfer of credit and acceptance of
credentials by requiring that decisions about
the acceptance of credits and credentials
cannot be made solely on the basis of the
accreditation of the sending institution or
program, provided that the institution or
program is accredited by a recognized
agency.
Institutions would be required to inform
prospective students of their policy.
Program Reviews, Audits &
Investigations: Breaking Issues &
Solutions for Resolution
Joel M. Rudnick
Powers
Pyles
Sutter &
Verville PC
Attorneys At Law
Potential Consequences of
Noncompliance in Financial Aid


Program review or audit findings leading to
disallowances and liabilities.
Enforcement Actions -- fines, limitations,
termination, suspension.

Reimbursement or Cash Monitoring

Letters of Credit


Growth Restrictions (changes in ownership,
audit findings)
School And Program Closures, Teach Outs,
Loan Discharges, Class Action and Qui Tam
Lawsuits.
Sources of Enforcement – ED and
Beyond

Program Reviews (Onsite and Desk Reviews)

OIG Audits and Investigations

Substantive Change Reviews

Qui Tam Lawsuits & Federal Court Litigation


Student Lending: State AGs, ED and
Congressional Inquiries, FTC
Accreditation: Outcomes (Completion &
Placement)
ED Program Review Activity
ED Program Reviews Completed in FY
2004 – 2006

634 Program Review Completed




FY 2006: 190
FY 2005: 219
FY 2004: 225
Breakdown of FY 2004-2006 Reviews By
School Type




Public: 133
Proprietary: 367
Private Nonprofit: 132
Foreign: 2
ED Program Review Activity
ED Program Reviews Completed in FY 2004-2006
Program Reviews at All Institutions
FY04 FY05 FY06
Associate Degree:
54
70
50
Bachelor’s Degree:
25
19
23
First Professional Degree:
3
1
3
Master’s Degree or Doctor’s Degree
42
34
29
Short-Term (300-599 hours):
0
1
0
Non-Degree (600-899 hours)
0
2
6
Non-Degree 1 Year (900-1799 hours)
71
60
70
Non-Degree 2 Years (1800-2699 hours)
26
30
8
Non-Degree 3+ Years (>2699 hours)
4
2
1
ED Program Review Activity
Teams
Completed in
FY 2004
Completed in
FY 2005
Completed in
FY 2006
Atlanta
32
33
30
Chicago
40
30
22
Dallas
18
19
38
Denver
20
34
16
Kansas City
30
30
11
New York/Boston
31
20
36
Philadelphia
20
16
13
San Francisco/Seattle
33
38
22
Avoiding Program Review
and Audit Liabilities
Top Findings in Program Reviews and Audits
Ranked by Frequency

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
Excess cash balances
Late Returns of Title IV funds
Verification violations
Incorrect Return calculations
Inconsistent information in student file
Entrance/exit counseling deficiencies
Campus Crime requirements not met
Satisfactory Academic Progress Standards not
mentioned
Avoiding Program Review
and Audit Liabilities
Top Findings in Program Reviews and Audits
Ranked by Dollars

Ability to Benefit violations

Falsification of records

Inconsistent information in student file

Excess cash balances – Direct Loans

FISAP expenditures incorrect

Ineligible Pell disbursements

Lack of Administrative Capability

Refunds not made to Title IV accounts

Admissions policy not followed

Verification not documented

Satisfactory Academic Progress Standards not mentioned
ED and OIG Enforcement Activity

Recent Decisions from Administrative
Judges in Program Review and Audit
Appeals



R2T4 and Application of Dear Colleague
Letter
Recent Decisions from the Secretary in
Program Review & Audit Appeals

Ineligible Locations and Disallowances

Professional Judgment
Recent OIG Audit Activity

Increase in FY07 Final Audit Reports
Audit Review Process – Factors That
Trigger Audits, Investigations and Program
Reviews
HEA Factors for Prioritizing Program Reviews
1. Institutions with CDRs in excess of 25% or in
highest 25th percentile
2. Institutions with a default rate in dollar volume
for loans in highest 25th percentile
3. Institutions with significant fluctuation in FFEL,
Direct Loan, or Pell volume
4. Institutions reported to have deficiencies or
financial aid problems by state licensing or
accrediting agencies
5. Institutions with high annual dropout rates
6. Catch-all: Institutions deemed to pose a
significant risk of failure to comply with
administrative capability or financial responsibility
provisions
Audit Review Process – Steps For
Preempting and Containing Audit and
Program Review Findings



Information Flow During and Immediately
After the Audit & Visit – Detecting and
Correcting Factual Misunderstandings
Preempting File Review Requirements: The
10 Percent Standard
Opportunities Under The HEA To Correct or
Cure Administrative, Accounting or
Recordkeeping Errors


if the error is not part of a pattern of error
if there is no evidence of fraud or misconduct
relating to the error
Audit Review Process – Steps For
Preempting and Containing Audit and
Program Review Findings
Resolution of Audits, Reviews &
Investigations

Case Management Team

Policy and PIP

Office of General Counsel

Senior ED Officials

Administrative Judges

State & Accrediting Agencies
Other Sources of Enforcement – Qui Tam
Lawsuits and Student Lending
Investigations


Qui Tam Lawsuits
Student Lending Investigations




New York AG Investigation Into Preferred Lenders
Lists and Lender-School Relationships
Old & New Enforcers
 ED
 OIG
 Congress
 Other State AG Offices
State Legislatures
 Federal Trade Commission
What These Developments Mean for Title IV
Participating Institutions & The Enforcement
Process
Preventive Care





Internal Controls & Corrective Action Plans
Operational Procedures to Ensure Compliant
and Ethical Financial Aid Practices
Hiring, Training and Maintaining An Ethical
Compliance Team
Monitoring Changes in Law and Guidance
Anticipating and Preventing Employee and
Student Fraud
Preventive Care (cont’d)


Risk Identification
Internal/External Reviews and
Assessments

Helplines/Hotlines

Active Review of Complaints

The Role of In-House and Third-Party
Experts
Powers
Pyles
Sutter &
Verville PC
Attorneys At Law
Powers Pyles Sutter & Verville, P.C.
1501 M Street, NW, 7th Floor
Washington, DC 20005
Ph. 202-872-6757
Fax. 202-785-1756
E-mail: [email protected]
Stanley A. Freeman
Stanley A. Freeman joined Powers Pyles Sutter & Verville, P.C. in 1994. Mr. Freeman
is a principal and shareholder and founder of the firm's education practice. Mr. Freeman
frequently counsels postsecondary educational institutions from all sectors of higher education
regarding strategic issues pertaining to participation in the federal student financial assistance
programs, accreditation, licensure, and related regulatory concerns.
Mr. Freeman has been actively involved in representing educational institutions for
twenty years. In his practice, he counsels individual educational institutions, corporate investors
in higher education, associations of schools and colleges, accrediting agencies, guaranty
agencies, and allied educational companies on administrative, transactional, regulatory and
litigation matters. He has represented numerous schools in proceedings before the U.S.
Department of Education, the accrediting commissions, and guaranty agencies. He has also
litigated cases in the state and federal courts. Stan spends much of his time advising clients
concerning regulatory and compliance matters arising under the Higher Education Act of 1965.
Mr. Freeman graduated with distinction from the Honors College of the University of
Michigan in 1978 and received his law degree from the Georgetown University Law Center in
1982. He is admitted to practice law in the District of Columbia, Maryland, and Virginia.
Powers
Pyles
Sutter &
Verville PC
Attorneys At Law
Powers Pyles Sutter & Verville, P.C.
1501 M Street, NW, 7th Floor
Washington, DC 20005
Ph. 202-872-6778
Fax. 202-785-1756
E-mail: [email protected]
Sherry Mastrostefano Gray
Sherry Mastrostefano Gray is a principal and a member of the
Education Group at Powers Pyles Sutter & Verville, P.C. She represents
colleges, universities and postsecondary education companies. Ms. Gray
regularly advises clients regarding federal regulatory, state and
accrediting agency requirements applicable to postsecondary institutions,
including approval requirements, federal student financial aid compliance
issues, growth plans, mergers and acquisitions, student loan programs,
and non student aid federal grant standards. Ms. Gray assists institutions
in the resolution of government and independent audits, investigations
and other actions alleging failure to comply with regulatory requirements
or accrediting agency standards. Ms. Gray graduated with honors from
Boston University in 1986 and received her law degree, with honors, from
George Washington University Law School in 1990. Prior to joining private
practice, she served as law clerk in the United States District Court for the
Western District of Virginia. Ms. Gray is a member of the bar of the
District of Columbia and a member of the National Association of College
and University Attorneys.
Powers
Pyles
Sutter &
Verville PC
Attorneys At Law
Powers Pyles Sutter & Verville, P.C.
1501 M Street, NW, 7th Floor
Washington, DC 20005
Ph. 202-466-6550
Fax. 202-785-1756
E-mail: [email protected]
Sharon H. Bob, Ph.D.
Sharon H. Bob, Ph.D., Higher Education Specialist on Policy and Regulation, is
a member of the Education Group at the Washington, D.C. law firm of Powers Pyles Sutter
& Verville, P.C. Dr. Bob advises all sectors of higher education regarding strategic issues
pertaining to their participation in the federal student financial assistance programs,
accreditation, licensure, education tax benefits, and related regulatory matters.
Dr. Bob advises public and private colleges and universities, as well as private
and publicly-traded companies. In this role, she provides clients with detailed technical
guidance related to compliance with applicable statute and regulations. She regularly
assists postsecondary educational institutions on issues relating to institutional eligibility,
program eligibility, student eligibility, financial responsibility and administrative capability
standards, changes of ownership, adding locations and programs, program reviews and
compliance audits, and institutional responsibilities for the education tax benefits.
Through training seminars and on-site reviews, she assists clients in complying with the
federal requirements for administering federal student financial assistance. Dr. Bob has
authored numerous articles on federal financial aid issues for The Greentree Gazette,
NASFAA’s Journal of Student Financial Aid, NASFAA’s Student Aid Transcript, the Career
College Link, and other higher education publications and frequently speaks at meetings of
college officials and student aid administrators.
Dr. Bob received her undergraduate degree summa cum laude from the State
University of New York at Buffalo and was elected to Phi Beta Kappa. She received her
doctorate from the University of Maryland.
Powers
Pyles
Sutter &
Verville PC
Attorneys At Law
Powers Pyles Sutter & Verville, P.C.
1501 M Street, NW, 7th Floor
Washington, DC 20005
Ph. 202-872-6763
Fax. 202-785-1756
E-mail: [email protected]
Joel M. Rudnick
Joel Rudnick is a principal in the firm’s education practice and has specialized in representing public and private
colleges and schools, investors, and lenders on compliance, litigation and transactional matters for 16 years.
Joel advises clients on compliance issues arising out of all aspects of the federal, state, and accrediting body
regulation of public and private postsecondary educational institutions with a primary focus on matters related to
the federal student aid programs authorized by the Higher Education Act of 1965. He regularly assists clients with
strategic planning and targeted advice on issues relating to institutional eligibility, the 90/10 rule, financial
responsibility, changes in ownership, the incentive compensation rule, student lending rules, distance learning,
return of funds, institutional changes such as new campuses and educational programs, student eligibility rules,
verification, compliance audits, and the vast array of technical rules and guidance governing the disbursement of
federal student financial assistance. He also speaks and writes frequently on breaking regulatory issues affecting
the financial aid community, including CCA, NASFAA, and state and regional conferences and seminars.
Practice Areas:
• Postsecondary Education
• Title IV Compliance
• Program Review and Audit
Responses and Appeals
• Accreditation and Licensure
• Litigation
• Transactions
• Title IV and Private Lending
Member:
• DC Bar
• Maryland Bar
• NASFAA
• NACUA
Education:
• JD, Georgetown, 1991
• BA, New York University,
1988
Joel has extensive experience representing postsecondary educational institutions in proceedings before the
United States Department of Education. He has litigated numerous client appeals of final audit and program
review determinations and adverse actions before the Department, as well as seeking and obtaining settlements
of such matters. He has also represented clients in federal court and in show cause proceedings before
accrediting bodies and state licensing agencies. He has provided regulatory counsel on over 75 program reviews,
audits, and investigations on Title IV matters.
Joel also counsels schools and investors on regulatory and transactional matters unique to the acquisition of
postsecondary educational institutions. He has advised on over 50 transactions in the postsecondary market,
including initial and secondary public offerings, going private transactions, non-profit to for-profit conversions,
mergers and recapitalizations. He advises clients on the transactional impact of applicable federal, state, and
accrediting body rules, including structuring and regulatory approvals. He also conducts and consults on due
diligence inquiries and investigations.
Joel graduated from Georgetown University Law Center in 1991. He lives in the Washington area with his wife
Patty and their son and daughter.