UNITED STATES DEPARTMENT OF EDUCATION
             WASHINGTON, D.C. 20202

_________________________________________

In the Matter of                         Docket No. 96-62-SP

AL COLLINS GRAPHIC DESIGN SCHOOL,        Student Financial Assistance Proceeding
            Respondent.            
__________________________________________    PRCN: 199510900006

Appearances:

Ralph H. Vieau, President, Al Collins Graphic Design School, Tempe, Arizona, for Respondent.

S. Dawn Scaniffe, Esq., Office of the General Counsel, United States Department of Education, Washington, D.C., for Student Financial Assistance Programs.

Frank K. Krueger, Jr., Administrative Judge.

    Under 34 C.F.R. § 668.7(a)(8) (1992), a student is not eligible to receive student financial assistance under Title IV of the Higher Education Act of 1965, as amended, unless the student has filed a Statement of Selective Service Registration Status in accordance with 34 C.F.R. § 668.33 (1992). Under § 668.33 (a)(1), a participating institution may not disburse Title IV funds to any student until such a Statement is filed. The Statement shall certify either that the student is registered with the Selective Service System or that, for a specified reason, the student is not required to register. An institution may waive the requirement that a student file a Statement of Selective Service Registration Status if the institution determines, based on “clear and unambiguous evidence,” that the student is not required to register. Id. at § 668.33(b). However, any waiver is at the institution's peril since it may be liable for any funds disbursed if it is ultimately determined that its waiver was “not reasonable in light of all available information.” Id. at 668.33(f). Similarly, an institution may disburse assistance to a student who has submitted the required Registration Statement from a student who is required to register with the Selective Service System, but who has not registered, if the institution had information which conflicts with the student's Statement, and acceptance of the Statement “was not reasonable in light of all available information.” Id. at 66.33(g).

    In the case at hand, Respondent may have disbursed the Pell Grant funds before it received Student # 6's Registration Statement, which would be a clear violation of 34 C.F.R. §§ 668.7(a)(8) and 668.33(a)(1). However, since it is unclear as to when the Pell Funds were actually distributed, and it is unclear as to the exact day in August when Student #6 signed the Registration Statement on the Electronic Student Aid Report, there is the possibility that the Pell funds where distributed after Respondent's receipt of the Statement and before the student withdrew from the institution on August 3, 1992 -- i.e. August 2, 1992. Notwithstanding this possibility, Respondent would still be in violation of 34 C.F.R. § 668.33 since, as noted above, § 668.33(g) provides that an institution is liable for any Title IV aid awarded to a student who has submitted a Registration Statement indicating that the student was registered with the Selective Service when the student was not registered and acceptance of the student's Statement was not reasonable in light of the conflicting information in the institution's possession.
    
    Although the Respondent acknowledged that the Selective Service could not confirm the student's registration, its defense is that “data match problems were not unusual during 1992- 93,” and reliance on the student's certification was reasonable. Respondent makes no effort to discuss or define the so-called “data match” problems which are cryptically mentioned in its submission or otherwise offer any evidence in support of its position. In light of the evidence in the record, I find that Respondent's Pell Grant award to Student #6 was unreasonable and in violation of 34 C.F.R. § 66.33 (1992).
    

July 29, 1996

                        _____________________________
                                Frank K. Krueger, Jr.
                                Administrative Judge