Court Lifts UES Exclusion From Loan Program

The U.S. District Court in Los Angeles on Friday granted a temporary restraining order preventing the California Student Aid Commission from barring one of United Education & Software’s 26 trade schools from the federal student loan program until a hearing is held Oct. 31.

The commission, a state agency that administers the federal student loan guarantee program, said last week that new students enrolling at National Technical Schools, a Los Angeles mail order school owned by the Encino-based United Education & Software, wouldn’t be eligible for government-guaranteed student loans because the school didn’t meet the program’s standards.

The court ordered National Technical Schools to post a $250,000 bond as a condition for granting the temporary stay.

However, the restraining order doesn’t affect a separate decision announced Oct. 16 by the Higher Education Assistance Foundation, a private, nonprofit agency in St. Paul, Minn., that guarantees student loans, to suspend National Technical Schools from its loan guarantee program for a month.

The commission banned National Technical Schools from the loan program because of problems uncovered during a U.S. Department of Education audit conducted from August, 1987, to November, 1988.

Among other things, the audit found that the school’s computer training courses were too short to meet the federal minimum length of six months, the school admitted academically unprepared students, and it didn’t make proper refunds on loans.

The federal government said earlier that United Education & Software might be liable to repay $21.8 million in government-backed student loans because of the audit findings.