Judges split on approving high-cost retraining tuition

December 16, 2010

A panel of judges on the Indiana Court of Appeals couldn’t agree on whether a laid-off man’s request for training at an expensive college should be approved.

R.D. worked as a machinist in Bloomington earning nearly $25 an hour. He was laid off and decided he wanted to pursue training under the Trade Act of 1974 at the Art Institute of Indianapolis. He would obtain a degree in graphic arts in print and web in 18 months at a cost of more than $56,000.

The Indiana Department of Workforce Development denied his request based on its cost and noted that he could attend Ivy Tech Indianapolis and receive similar training at a lower cost. The Administrative Law Judge hearing the appeal found the programs to be substantially similar and denied R.D.’s application to attend the Art Institute based on cost. The Review Board affirmed.

After examining the history and purpose of the Trade Act, Judges Paul Mathias and Edward Najam reversed because, based on the evidence, the training R.D. would receive at the Art Institute as compared to Ivy Tech was not similar.

Although nearly two-thirds cheaper in tuition, the program at Ivy Tech allowed for only studying print or web design. R.D. designated evidence that graduates of the Art Institute have a placement rate of more than 78 percent and he could get a full-time job at a salary of approximately $69,000. There was no evidence presented regarding Ivy Tech’s placement and graduates tend to start out at $9 an hour.

One goal of the Trade Act is to get people employed making at least 80 percent of what they were before, wrote Judge Mathias in R.D. v. Review Board, No. 93A02-1005-EX-559. Another precondition for approval of training under the act is that there must to be a reasonable expectation of employment after completing training.

The act says that training may not be approved at one provider, when all costs considered, the training is substantially similar in quality, content, and results at a lower-cost provider with a similar time frame. The majority found, unlike the ALJ, that the two programs are not substantially similar in quality, content, and results, and they don’t even result in the same degree. The majority reversed the denial of R.D.’s request to retrain at the Art Institute.

Chief Judge John Baker dissented because the purpose of the act is to train the highest amount of people at the lowest reasonable cost. Three people could get degrees at Ivy Tech for the cost of attending the Art Institute. Even if R.D. had to get two separate degrees from Ivy Tech to have training in web and print design, it would still be significantly less than his tuition for the Art Institute.

“When considering the purposes of the Trade Act, namely, to provide workers with training at the lowest reasonable cost that will lead to employment and result in training opportunities for the largest number of adversely affected workers, I cannot agree that R.D. has successfully demonstrated that the Review Board’s decision was unreasonable in denying his application for funding to attend the Art Institute,” he wrote. “In short, R.D.’s request for training at the Art Institute does not satisfy the ‘lowest cost’ requirement of 20 C.F.R. section 617.22(a)(6).”


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