341 F.Supp.2d 74 (2004) | Cited 2 times | D. Puerto Rico | October 26, 2004


These proceedings are based on Plaintiff INSTITUTO DE EDUCACIONUNIVERSAL's (IEU) challenge to certain actions taken byDefendants, the U.S. Department of Education (USDE or EDUCATION),and the Secretary of Education (SECRETARY), to obtainreimbursement for federal funds allegedly received erroneously byPlaintiff in conflict with the requirements of the HigherEducation Act of 1965, as amended, 20 U.S.C. § 1070 et seq.,(Title IV, HEA programs). The parties filed cross-motions forsummary judgment, acknowledging that there are no disputed factssufficient to give rise to a contested proceeding. Following areview of the administrative record created pursuant to theagency's process, and the arguments set forth by the parties, theCourt hereby GRANTS summary judgment to USDE. STANDARD FOR REVIEW

Plaintiff, a private post-secondary higher educationinstitution that was eligible to participate in the HigherEducation Act Title III and IV programs administered by the USDE,filed its Complaint to effectuate a remand from the First CircuitCourt of Appeals to obtain judicial review of a final agencyaction pursuant to the Administrative Procedure Act,5 U.S.C. § 551 et seq. (APA). As a result, judicial review in this caseconsists of a review of the administrative record. Florida Power& Light Co. v. Lorion, 470 U.S. 729, 744 (1985). AlthoughPlaintiff suggests that a de novo review may be appropriatehere, it wholly fails to demonstrate the exceptionalcircumstances that could justify deviation from thewell-established standard requiring a record review ofadministrative decisions. Town of Norfolk v. U.S. Army Corps ofEngineers, 968 F.2d 1438, 1458-59 (1st Cir. 1992). ("Courtsrequire a strong showing of bad faith or improper behavior beforeordering the supplementation of the administrative record.")

In addition, pursuant to the APA, a reviewing court evaluatesthe propriety of an administrative action to determine if it is"arbitrary, capricious, an abuse of discretion, or otherwise notin accordance with law . . .". 5 U.S.C. § 706(2). It is wellsettled that such an inquiry is ultimately narrow and limited to"whether the decision was based on a consideration of therelevant factors and whether there has been a clear error ofjudgment." Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971).Indeed, "(t)he Court is not empowered to substitute its judgmentfor that of the agency." Id.; and, in fact, "judicial review ofadministrative actions should be highly deferential to theagency." Organized Fishermen of Florida v. Hodel,775 F.2d 1544, 1550 (11th Cir. 1985). Moreover, when conflicting viewsare expressed, "an agency must have discretion to rely on thereasonable opinions of its own qualified experts, even if, as anoriginal matter, a court might find contrary views morepersuasive." Marsh v. Oregon Natural Resources Council,490 U.S. 360, 378 (1979).

Summary Judgment Standards

As set forth by Rule 56(c), Fed.R. Civ. P., summary judgmentis appropriate where the record shows no genuine issue ofmaterial fact and the moving party is entitled to judgment as amatter of law. The First Circuit Court of Appeals has stated thatthe function of summary judgment is "to pierce the boilerplate ofthe pleadings and examine the parties' proof to determine whethera trial is actually necessary." Vega-Rodriguez v. Puerto RicoTelephone Co., 110 F.3d 174, 178 (1st Cir. 1997). "To defeata motion for summary judgment, the nonmoving party mustdemonstrate the existence of a trialworthy issue as to somematerial fact." Cortes Irizarry v. Corporación Insular,111 F.3d 184, 187 (1st Cir. 1997). Furthermore, "[a] genuineissue of fact exists only if a reasonable jury could resolve itin favor of either party." Basic Controlex Corp. v. KlocknerMoeller Corp., 202 F.3d 450, 453 (1st Cir. 2000). At this stage ofthe proceedings, both parties have acknowledged that summaryjudgment is the appropriate disposition of the matter given theirpending cross-motions.

Having reviewed the parties' proposed findings of fact, as wellas the administrative record, and based on the applicable law,the Court finds that summary judgment in favor of USDE iswarranted.


1) To monitor a school's compliance with Title IV requirements, the USDE conducts program reviews through its Office of Student Financial Assistance Programs (SFAP) and audits through its Office of Inspector General (OIG). 2) Following the conduct of program reviews and audits, a program review report or a draft audit report is issued. 3) Liabilities are assessed by the USDE in documents called final program review determinations (FPRD) and final audit determinations (FAD). 4) In addition to assessing liabilities, the USDE may impose fines for any Title IV programmatic violation and may seek to terminate an institution's Title IV eligibility. 5) An institution receives an administrative hearing before an USDE hearing official to contest any determinations and sanctions. 6) The hearing official's decision is appealable to the Secretary. 7) In May of 1994, USDE's OIG initiated an audit to examine Plaintiff's administration of the Title IV programs during 1991-92, 1992-93, and 1993-94. 8) A final audit report was issued on September 25, 1995. 9) The audit report found that Plaintiff violated Title IV requirements by: (1) overstating its clock hours of instruction and thereby improperly overawarding Pell Grant funds to its students (clock hour finding); and (2) requesting more Title IV funds than needed for disbursement to its students within three days of its receipt of the funds (excess cash finding). 10) For purposes of calculating its Pell Grant awards, the audit found that Plaintiff overstated the hours in its day class program by 220 hours (1440 instead of 1200) and in its night class program by 200 hours (1200 instead of 1000). 11) Plaintiff received $3,854,700 in additional Pell Grant funds as a result of the manner in which it computed its clock hours of instruction during the three-year audited period. 12) The audit found that by violating the requirement to disburse funds within the required three days of its receipt of these funds, Plaintiff retained surplus funds of $542,947 at the conclusion of the audited period, and owed Education $213,917 in imputed interest for its ongoing excess cash balances. 13) On June 28, 1996, SFAP issued a Final Audit Determination (FAD) based on the OIG final audit report covering the 1991-92, 1992-93, and 1993-94 award years. 14) The FAD assessed a liability against Plaintiff of $756,864 for the excess cash finding, and $1,284,900 against Plaintiff for the clock hour finding for 1993-94. 15) Plaintiff appealed the FAD on August 12, 1996. 16) From April 18-22, 1995, USDE conducted a program review to examine Plaintiff's administration of its Title IV funds for its 1992-93, 1993-94, and 1994-95 award years. 17) A program review report was issued on October 26, 1995 that found that Plaintiff failed to make timely Pell Grant refunds during all three award years, and failed to make Pell Grant refunds during 1994-95 (refund finding). 18) On June 3, 1996, SFAP issued a Final Program Review Determination (FPRD) that assessed liabilities for the refund finding in the amount of $720,386, to include $655,554 for Plaintiff's failure to make 512 refunds during 1994-95. 19) On July 17, 1996, Plaintiff appealed the FPRD. 20) On March 12, 1996, USDE notified Plaintiff of its intent to terminate the school's eligibility to participate in the Title IV programs, and to fine it $275,000 for the programmatic violations identified in the program review report and audit. 21) Plaintiff appealed the termination and fine actions on April 1, 1996. 22) The USDE's hearing official consolidated all three administrative actions involving Plaintiff. 23) An administrative hearing was held in San Juan, Puerto Rico in October 1996. 24) The hearing official issued his decision on January 24, 1997. 25) The hearing official affirmed the excess cash finding and the refund finding and assessed the associated liabilities. He reversed the clock hour finding in part, and reduced the amount of the fine to $150,000. The hearing official terminated Plaintiff's Title IV eligibility. 26) Both parties appealed the hearing official's decision to the Secretary. 27) In the final agency action, issued on October 28, 1997, the Secretary affirmed the hearing official's excess cash and refund findings, but reversed the hearing official's clock-hour finding, reinstating the full liabilities. The Secretary sustained the amount of the fine, but reversed Plaintiff's Title IV eligibility termination. 28) The Office of Student Financial Assistance (SFAP) filed a motion for reconsideration that was denied on January 9, 1998. 29) As a result of the administrative process, Plaintiff was assessed a total of $2,875,879 in liabilities and fines that it challenged in this case. ($1,284,900 (clock hour finding) + $756,864 (excess cash finding) + $684,115 (refund finding) + $150,000 (fine) = $2,875,879.) The Clock Hour Finding

The USDE's Pell Grant program assists low and middle incomestudents with the cost of their educational instruction. The USDEadministers the program to provide grants to qualifiedundergraduate students. 20 U.S.C. § 1070a(b).

The USDE's regulations require that Pell Grant funds bedisbursed to students in accordance with established paymentperiods. 34 C.F.R. § 690.75 (1993-95). For each payment period,an institution may pay Pell Grant funds only to eligible studentswho have completed the requisite number of clock hours or credithours of instruction. 34 C.F.R. § 690.75(a)(3) (1993-95). Plaintiff measures itsinstruction in clock hours. A student completing more clock hoursis either entitled to a larger Pell Grant award or is entitled tothe award at an earlier time. See 34 C.F.R. §§ 690.63(c)(1993),690.63(a)(4)(ii), (e) (1994-95), 690.75(a)(3)(i) (1993-95).Accordingly, an accurate calculation of the number of clock hoursis relevant to determining the total amount of a student's PellGrant.

During the 1993-94 award year, the USDE amended its regulatorydefinition of the term "clock hour" to mean: A period of time consisting of — (1) A 50- to 60-minute class, Lecture, or recitation in a 60-minute period; (2) A 50- to 60-minute faculty-supervised laboratory, shop training, or internship in a 60-minute period.34 C.F.R. § 600.2 (1994) (emphasis added).

In adopting this language, the Secretary stated that "[t]herevised definition of a clock hour requires that each clock hourof instruction take place in a discrete 60-minute period."58 Fed. Reg. 36918, 36919 (July 23, 1993). Prior to the 1993-94award year, a "clock hour" was defined as a "period of timeconsisting of . . . a 50-to 60-minute class, lecture, orrecitation." 34 C.F.R. § 600.2(1993). As a result, some schools,including Plaintiff, determined the number of clock hours intheir programs of instruction by aggregating the number ofminutes of instruction and dividing the number by fifty (50). Toavoid this continued practice, and the concomitant inflation inthe amount of Pell Grant awards, the Secretary adopted the above-stated change so that the aggregatedminutes would have to be divided by sixty (60).

The USDE upheld the application of this regulatory definitionto Plaintiff's practices pursuant to its administrative process.In the final agency action, the Secretary expressly stated: I am very concerned about institutions calculating clock hours in a manner inconsistent with the regulation with the purpose of receiving funding prematurely for instructional hours that are not actually earned. Institutions must carefully and closely adhere to the method of calculation reiterated in this decision. (Administrative Record (A.R.) at 1880.)

As a result, USDE assessed $1,284,900 in liabilities againstPlaintiff for this regulatory violation.

As previously noted, the USDE is entitled to deference in thereview of its agency action, with the administrative decisionbeing set aside only if it is found to be arbitrary andcapricious, an abuse of discretion, or contrary to law. CitizensAwareness Network v. Nuclear Com'n, 59 F.3d 284, 290 (1stCir. 1995); see also Chevron USA Inc. v. Natural ResourcesDefense Council, Inc., 467 U.S. 837 (1984). "This deference isespecially marked in technical or scientific matters within theagency's area of expertise." Citizens Awareness Network,supra, 59 F.3d at 290. Moreover, an agency's interpretation ofits own regulations is of controlling weight unless it is plainlyerroneous or inconsistent with the regulation. Robertson v.Methow Valley Citizens Council, 490 U.S. 332, 359 (1989); U.S.v. Haggar Apparel Co., 526 U.S. 380, 392 (1999). Here, the regulatory language is unambiguous, and it wasenforced in a manner that is consistent with this language. Thereis no basis to find Education's behavior to have been arbitraryand capricious.

Plaintiff's complaint challenged USDE's clock hour finding inthree principal ways, none of which serve to defeat USDE's Motionfor Summary Judgment. First, Plaintiff argued that the hearingprocess it received was deficient, alleging that USDE failed toconsider or make available certain potential impeachmentevidence, and did not call a particular witness. (Plaintiff'sFirst and Second Cause of Action; Compliant ¶¶ 44-55.) In itsargument, Plaintiff focused on conflicts that may have existedbetween the two OIG agents who participated in the OIG audit.However, even assuming arguendo that these potential witnesseshad conflicting opinions on the enforceability of the auditfinding, USDE's decision is exclusively a legal determinationbased on the propriety of Plaintiff's method of calculating clockhours. The only issue before the hearing official and theSecretary was whether the method of calculation Plaintiff usedwas permissible under the regulations. They both concluded onbehalf of USDE that it was not. There is no basis to find thatsuch a decision was arbitrary and capricious.2 Moreover, there is no evidence to suggest that USDE violatedits regulations governing its administrative process through themethod in which evidence was received and witnesses were called.Administrative tribunals necessarily have discretion to limit theevidence admitted and the witness testimony received. See,e.g., Davis v. Office of Personnel Management, 918 F.2d 944(Fed. Cir. 1990). Nothing in the record suggests that the hearingofficial did anything other than appropriately manage the casebefore him.

Second, Plaintiff alleged that the USDE's clock hour regulationconflicts with a separate statutory provision. (Plaintiff'sFourth Cause of Action, Complaint at ¶¶ 66-67, 69-70.) Thestatute in question precludes the Secretary from exercising"discretion, supervision or control over the curriculum" of aninstitution. 20 U.S.C. § 3403(b). However, Plaintiff's argumentis without merit. By defining a "clock hour" for purposes ofmeasuring Pell Grant eligibility, the Secretary did nothing torestrict or control Plaintiff's curriculum. Rather, the Secretarymerely established a standard for determining the amount of Pell Grant funding that astudent may receive who is enrolled in an eligible program.

Third, Plaintiff alleged that USDE's decision conflicts withprevious administrative case law. (Plaintiff's Fourth Cause ofAction, Complaint at ¶¶ 72-79.) However, this argument isbaseless since the case law Plaintiff cited predates theregulatory change at issue here, and thus had no precedentialeffect on the agency's action against Plaintiff. There is nothingarbitrary and capricious about enforcing new regulatorylanguage prospectively, in a manner that differs from the way inwhich different language was previously enforced.

Finally, in its Motion for Summary Judgment, Plaintiff statedthat USDE's "clock hour" regulation was not adopted until July23, 1993, with an effective date of September 7, 1993, as part ofa larger regulatory package. Thus, Plaintiff claimed thatenforcing the regulation against Plaintiff for the 1993-94 awardyear (which ran from July 1, 1993 to June 30, 1994) constitutedprohibited retroactive enforcement. Again, this contention iswithout merit.

The USDE did not engage in retroactive enforcement. Theregulation in question did not adopt a new policy or changeexisting policy, but rather clarified it. Within the preamble tothe regulation the Secretary stated, "The Secretary is revisingthe definition of the terms "clock hour". . . and "eligibleprogram" to eliminate perceived ambiguities in those definitions,notwithstanding the fact that the Secretary believes that thecurrent definitions are not ambiguous." 58 Fed. Reg. 39619 (July 23, 1993).3Thus, regardless of the effective date identified for the entirepackage of regulations, the matter under consideration here wasnot substantively changed, nor did Plaintiff lack notice ofUSDE's clock hour policy prior to the regulation's effectivedate. As a result, to the extent that Plaintiff chose tocalculate Pell Grant awards contrary to this regulation at thebeginning of its 1993-94 award year, it did so with a knowingdisregard for the consequences.

Moreover, even assuming there was an issue of the USDEretroactively enforcing its clock hour regulation for a briefperiod of time, in this case it would have been appropriate.

The First Circuit Court of Appeals has evaluated the proprietyof the retroactive application of an agency policy by determiningwhether it would result in a "manifest injustice". The Court hasstated, while upholding various retroactive applications,"[u]nder the manifest injustice standard the disappointment ofprivate expectations that results from the implementation of anew rule must be balanced against public interest in enforcementof that rule." New England Power Co. v. United States,693 F.2d 239, 245 (1st Cir. 1982). See also Adams Nursing Home ofWilliamstown, Inc. v. Matthews, 548 F.2d 1077, 1080 (1stCir. 1977); Dedham Water Co. v. Cumberland Farms Dairy, Inc.,805 F.2d 1074 (1st Cir. 1986). Here, the balance weighs decidedly in favor of USDE; the Secretary hasa strong incentive in seeing a policy enforced that was adoptedto insure integrity in the administration of the Pell Grantprogram while Plaintiff's expectations are to receive excess PellGrant receipts.

It is not the province of this Court to evaluate the wisdom ofa particular agency policy, but rather to determine whether ithas been enforced consistent with the law. Based on a review ofthe entire administrative record, it is apparent that USDEenforced its rules for Pell Grant calculations in accordance withthe law, and that Plaintiff received the benefit of USDE'sadministrative process to challenge this enforcement. Thus, theUSDE's actions were not arbitrary and capricious, and USDE isentitled to summary judgment on this matter.


When an institution participates in the Title IV, HigherEducation Act (HEA) programs, the institution acts in the natureof a fiduciary and is subject to the highest standard of care anddiligence in administering these programs and accounting to USDEfor the funds it receives. 34 C.F.R. § 8668.82(a), (b) (1991-94).Within the context of the student financial assistance programs,all Title IV funds are held in trust for the intended studentbeneficiaries and USDE. Accordingly, a school that receives thesefederal funds must either credit them to student accounts, orreturn them to the USDE within a three-day period. See 31C.F.R. Part 205 (1992); Recipient's Guide for the Department of Education PaymentManagement System (1993). A.R. at 174-182. Plaintiff does notcontest the existence of this three-day requirement.

USDE, however, found that Plaintiff routinely violated thethree-day requirement over a three-year period, consistentlyrequesting and receiving Pell Grant funds in excess of the amountit would credit to student accounts. At the end of the three-yearperiod, USDE found that Plaintiff held $542,947 in excess funds.In addition, USDE charged Plaintiff $213,917 in interest for thefunds it improperly retained throughout these three years.

Plaintiff challenged this finding by suggesting that USDEshould have evaluated its compliance with the three-dayrequirement by examining different records than it did.(Plaintiff's Fifth Cause of Action; Complaint at ¶¶ 84-86.) Italso suggested that there may have been another way to calculatethe interest that it owes. (Plaintiff's Fifth Cause of Action;Complaint at ¶ 87.) However, Plaintiff offered nothing to showthat USDE's action was arbitrary and capricious.

The administrative record identifies with particularity themanner in which USDE rendered its assessment. See generallyA.R. at 1278-1330. Both the hearing official, see A.R.1769-1770, and the Secretary, see A.R. at 1878, explained theevidence they reviewed and discussed the conclusions that theyreached.

The fact that there may have been alternative ways to evaluatethe evidence before the agency does not detract from theconclusions the agency rendered, nor does it suggest that the agency'sdecision was arbitrary and capricious. Rather, deference is owedto the agency's factual determination. As the First Circuit Courtof Appeals has noted, "A reviewing court will not disturb . . .findings so long as the (hearing official's) position representsa choice between two fairly conflicting views, even if the Courtwould have made a different choice had the matter come before itde novo." 3-E Co., Inc. v. N.L.R.B., 26 F.3d 1, 3 (1st Cir.1994); see also Adams v. U.S.E.P.A., 38 F.3d 43, 49(1st Cir. 1994). Given the existence of ample evidence tosupport its conclusion, USDE is entitled to summary judgment onthis issue.


If a student withdraws before completing a certain amount ofhis or her educational program, the school must return unearnedportions of the student's tuition. For purposes of the Pell Grantprogram, an institution is required to return any monies owed onbehalf of a student to the USDE if the student officiallywithdraws, drops out, or is expelled on or after the first day ofclass of a payment period. 34 C.F.R. § 668.22(a)(1) (1992-1995).During the relevant time period here, these refunds payments weredue within 30 days of the student's withdrawal.34 C.F.R. §§ 668.22(e)(5) (1992-93); 668.22(j)(4)(1994-95).

As explained within the administrative record, USDE permitted aschool to pay Pell Grant refunds by one of two ways: either bydirectly sending a check to USDE for the amount of the refunddue, or by drawing down less Pell Grant money for otherwise eligible newstudents while annotating specific student accounts to which therefunded money was credited. See, e.g., A.R. at 1440; 1756.

USDE assessed $715,456 for this violation consisting of$655,554 in unpaid refunds during 1994-95; $28,561 in interest onthose unpaid refunds; and $31,341 in interest for refunds thatPlaintiff paid late in previous years. Plaintiff did notchallenge the assessment for the late paid refunds.

Once again, the administrative record identifies withparticularity the manner in which USDE rendered its assessment.See generally A.R. at 1418-1434. Both the hearing official,see A.R. 1774, and the Secretary, see A.R. at 1878-79,explained the evidence they reviewed and discussed theconclusions that they reached. Nonetheless, Plaintiff challengedthis finding on two bases.

First, Plaintiff claimed that it provided evidence of more than$1 million in refund payments that USDE did not properlyconsider. (Plaintiff's Sixth Cause of Action; Complaint at ¶¶90-91.) However, to the contrary, the administrative recorddemonstrates that both the hearing official and the Secretary didconsider this evidence, and rejected it, and provided anexplanation for their decisions. See A.R. at 1774; 1878-89.Again, as explained previously, the careful consideration ofcompeting evidence and an agency's adoption of one permissiblereading of that evidence will not be disturbed upon judicialreview. 3-E Co., Inc., supra, 26 F.3d at 3. Subsequently, Plaintiff filed additional new evidence with thisCourt in an attempt to show compliance with USDE's refundrequirements. See docket Nos. 56, 57. This attempt to create anew record on appeal is rejected. As previously discussed, it iswell established in APA cases that, "the focal point for judicialreview should be the administrative record already in existence,not some new record made initially in the reviewing court." Campv. Pitts, 411 U.S. 138, 142 (1973); see also Florida Power& Light Co. v. Lorion, 470 U.S. 729, 744 (1985). Plaintiffacknowledged this expected standard of review but argued thatthis Court can go beyond it if there is "a strong showing of badfaith or improper behavior", Town of Norfolk, supra,968 F.2d at 1458, or if the agency deliberately excluded pertinentmaterials located within its files in an effort to manipulate itscase on record review. Environmental Defense Fund v. Blum,458 F. Supp 650 (D.D.C. 1978). However, the record before the Courtshows no evidence of bad faith, improper conduct, or manipulationby USDE that would permit the Court to reopen the establishedagency record. As a result, the Court declines to do so.4 Second, Plaintiff claimed that it was improperly assigned theburden of proof to contest the refund finding. (Plaintiff's ThirdCause of Action; Complaint at ¶¶ 56-60.) This argument is alsowithout merit. This case consisted of several consolidated agencyactions with the burden of proof residing at different times withdifferent parties. Compare 34 C.F.R. § 668.88(c)(2);34 C.F.R. § 668.116(d) (1996-98). However, after USDE satisfied its burdento establish Plaintiff's nonpayment of refunds, Plaintiffnecessarily assumed the burden to support its defense that itactually did pay the refunds contrary to USDE's evidence. As boththe hearing official, and the Secretary found, Plaintiff failedto do so. See A.R. at 1774; 1878-79.

As a result, the USDE's Motion for Summary Judgment is likewisegranted as to this issue.


Plaintiff offered no specific challenge within its Complaint tothe fine USDE imposed. Accordingly, Plaintiff's argument that thefine is arbitrary and capricious is purely derivative of itsarguments above, and USDE is likewise entitled to summaryjudgment. In its Motion for Summary Judgment, Plaintiff arguedthat the fine is disproportionate because "it goes beyond what isprescribed and mandated by statute." (Docket No. 57 at 31-32.)This statement is without merit. The statute authorizes a potential fine of $25,000 perviolation. 20 U.S.C. § 1094(c)(3)(B)(i). The agency actionsustained fines of $25,000 for each of the three years that theschool paid refunds late or not at all, for a total of $75,000,and $25,000 for each of the three years that the school retainedexcess cash, for a total of $75,000. Thus, the total fine is$150,000. The Secretary additionally could have fined theschool for its improper Pell Grant calculations, but chose not todo so. These actions are consistent with the governing statute;they do not violate it. USDE is required to do nothing more.


For the reasons set forth above, the USDE's Motion for SummaryJudgment (docket No. 35) is hereby GRANTED and Plaintiff'sMotion for Summary Judgment (docket No. 57) is DENIED.


The court having granted Defendants' Motion for SummaryJudgment affirming that its administrative action was neitherarbitrary nor capricious, it is hereby

ORDERED AND ADJUDGED that Plaintiff is liable to pay Defendants$2,725,879 in assessed liabilities and $150,000 in fines.


1. To the extent that proposed facts from either party are notadopted, they are rejected as either unsupported by the record,or as containing superfluous opinion or argument that isextraneous to the issue raised. See Ruiz v. CaribbeanRestaurants, Inc., 54 F. Supp.2d 2d 97, 102 (D. Puerto Rico1999).

2. The administrative record is replete with Plaintiff'sacknowledgment of its clock hour calculation methodology:Plaintiff totaled the number of minutes of instruction timeavailable during the day and divided that by 50 minutes, ratherthan by the 60 minutes required. See, e.g. A.R. at 564(Plaintiff's Pre-hearing Brief, "(Plaintiff) takes the totalamount of instructional time and divides it by fifty (50) minutesto compute clock hours."); 616 (Plaintiff's Response to the OIGDraft Audit, "The correct application . . . should be to dividethe 300 minutes of instruction by 50 minutes each."); 754(Plaintiff's Response to the OIG Final Audit, "The Institutecalculated its clock hours for its day program by taking thetotal amount of instructional time, 300 minutes (6 classes × 50minutes) and dividing that total by 50 for a total of six clockhours. . . . (Plaintiff) used the same methodology to compute itsclock hours for its evening schedule to arrive at 5 clockhours."); 1729 (Plaintiff's Post-hearing Brief, "In determiningthe appropriate amount of Pell Grants to be awarded to itsstudents, (Plaintiff) divides the total number of instructionalminutes by 50 to arrive at the number of clock hours in itsprograms.")

3. Within this preamble, the Secretary also referred topractices inconsistent with the regulation as conflicting with"the Secretary's long-standing interpretation under the currentdefinition of the term "clock hour." Id.

4. It is beyond dispute that Plaintiff had ample opportunitiesduring the many aspects of the lengthy administrative process tooffer the evidence from its own files that it subsequentlydecided to produce before this Court. For whatever reason,Plaintiff apparently believed that the evidence it offered duringthe administrative proceeding was either more persuasive or wasindependently compelling. Such a tactical decision does notjustify permitting supplementation of the record now. Moreover,the Court's review of the documents offered herein shows thateven if they were considered, on their face, they do not respondto the specific failings identified within the administrativeprocess for the agency's conclusions. Thus, they could notsupport a finding that USDE's decision was arbitrary andcapricious.

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