Daily Progress, Jacksonville, TX

December 27, 2012

Lon Morris stripped of accreditation

School can appeal

Ben Tinsley
Jacksonville Daily Progress

JACKSONVILLE —  Lon Morris College has formally been stripped of its accreditation status by the Southern Association of Colleges and Schools Commission on Colleges.

In a letter issued to the public on Dec. 20, the SACSCOC announced LMC officials have 10 days from the time they receive notification of this action to formally appeal.

If LMC does so, the matter will be forwarded to a SACSCOC committee expected to convene between Feb. 18 through Feb. 20. The college, meanwhile, would maintain its accreditation status, at least until the hearing takes place.

Dawn Ragan, chief restructuring officer for the Lon Morris College bankruptcy estate, did not return messages Wednesday or Thursday, nor did Houston attorney Hugh Ray III, the college's counsel. The SACSCOC letter states commission staff will not be commenting further on the issue.

The SACSCOC board of trustees voted to strip the accreditation because of developments that have taken place since LMC declared bankruptcy on July — the most major of which is the college's loss of its Title IV status.

In August, the U.S. Department of Education revoked that status, permanently stripping LMC's access to Higher Education Act funding, such as federal Pell grants, teacher education assistance, SMART grants, work study and federal student loans.

An education expert has said Title IV revocation is automatic and permanent when bankruptcy is declared by an institution such as Lon Morris.

"The law is awfully clear — if you declare bankruptcy, you are out of the Title IV program," Dennis M. Cariello of New York City said in a previous interview. "Bankruptcy simply is not an option if you hope to continue operating as a school."

Additionally, the requirements to maintain accreditation status are currently not in place — including having active school programs, maintaining a full-time faculty, having active degree programs and being able to provide a recent demonstration of financial stability.

If LMC does appeal, the college will be classified as a "Accredited Institution On Warning," until the follow-up hearing.

The SACSCOC is the regional body charged with the accreditation of degree-granting higher education institutions in southern states such as Texas.

In other Lon Morris matters, Judge Bill Parker of the U.S. Bankruptcy Court for the Eastern District of Texas on Dec. 23 formally approved the $137,000 settlement agreement that was pending between Lon Morris College and the United Methodist Higher Education Foundation.

Parker did so after reviewing the paperwork to make sure the language in the arrangement did not restrict the actions of the UMHEF in future endowment endeavors. The agreement is expected to pay $130,000 in back wages to furloughed LMC employees and $7,000 to the LMC bankruptcy estate.

In return, Dawn Ragan, chief restructuring officer of the Lon Morris bankruptcy estate, was ordered by Parker to waive any claims LMC may have against the UMHEF in general or specifically, against its $1 million restricted endowment fund, which will number at roughly $900,000 after this payout.

Ragan is the party authorized by the judge to disburse the funds to former LMC employees.