The opinion of the court was delivered by: DUFFY
Plaintiffs, students enrolled at defendant City University of New York (CUNY) who are recipients of both public assistance and certain state funded educational grants, have moved for a preliminary injunction enjoining defendants CUNY, Human Resource Administration (HRA), New York State Department of Social Services and various officials of these bodies from implementing or enforcing certain policies requiring the recomputation and reduction of either plaintiffs' educational financial aid stipends or their public assistance benefits. A hearing on this motion was held on June 6 and 7, 1978, and CUNY thereafter filed a post-trial memorandum. This opinion constitutes my findings of fact and conclusions of law.
Plaintiffs and their proposed class,
allegedly composed principally of Black and Hispanic women with dependent children, are public assistance recipients and CUNY students who also are receiving financial aid stipends from CUNY under one of two state funded programs: Search for Education, Elevation and Knowledge (SEEK) and College Discovery (CD). Certain of plaintiffs additionally receive federally funded and other types of state funded educational assistance grants, including aid under the New York State Tuition Assistance Program (TAP). On November 11, 1977, plaintiffs commenced this purported class action essentially challenging, on constitutional grounds, the implementation of a new CUNY budget and guidelines for public assistance recipients in special programs for the 1977-78 school term, to be retroactively applied to the 1976-77 term, which directed recomputation and reduction of SEEK and CD stipends to the extent that these monies exceeded those students' actual educational expenses, and prescribed recoupment of this excess previously awarded out of the reduced sum in certain cases. Prior to the formulation of this budgetary policy, the SEEK and CD stipends awarded to students receiving public assistance included certain funds allocated for maintenance and living expenses ("living differential") as well as to "actual" educational expenses such as books and supplies, tuition and lunch. Allegedly, students in SEEK and CD programs not in receipt of public assistance were to continue to obtain this living differential.
On November 14, 1977, I issued an order temporarily restraining CUNY from implementing their new budget guidelines pending a development of the relevant facts. To date CUNY voluntarily has refrained from taking any action to reduce plaintiffs' financial aid stipends.
However, in December, 1977, New York State Department of Social Services issued an administrative directive interpreting 18 N.Y.C.R.R. § 352.16(c).It is this directive which prompted the instant motion.
N.Y.C.R.R. § 352.16 provides:
(a) All income and resources of an applicant for or recipient of ADC or HR shall be considered in order to determine its availability; such income and resources shall be reasonably evaluated; and, when determined to be available, after policies governing the exemption and disregard of such income and resources have been applied towards meeting the needs of an individual and his dependents. No inquiry shall be made of the amount of earnings of a child under 14 years of age.
(b) When the terms of an award, the legislative intent of a government benefit, the rules of an organization paying a benefit, the nature of a trust fund, or the agreed upon intent of a friend, non-legally responsible relative or friend is sought to be restricted for the purpose of supplementing a State prescribed or approved standard it shall not qualify as a permissible restriction of income, unless the social services official determines that the health and welfare of the recipient would be specifically and materially enhanced thereby.
(c)(1) No part of a scholarship, grant or other such income that is necessary to cover the cost of necessary or essential school expenses (e.g., tuition, books, fees, equipment, special clothing needs, transportation to and from school, and child-care services necessary for school attendance), and is actually so used, shall be considered as income in determining need and amount of assistance.
(2) No grant or loan to an undergraduate student for educational purposes made or insured under any program administered by the United States Commissioner of Education shall be considered as income or resources in determining need and amount of assistance.
In purportedly clarifying the types of resources which may be considered as available income in accordance with the above quoted regulation, the implementing directive in issue prescribes the total exemption of federally administered or insured program funds ("federally-sourced funds") for those students who receive only federally-sourced funds, and the exemption to the extent of necessary and essential school expenses of other than federally-sourced funds (such as SEEK, CD and TAP awards) for those students who receive only funds from such sources. However, if a student receives both federally and other-sourced educational monies, the directive provides for the application of necessary and essential school expenses against the total amount of funds received; if the total is in excess of necessary and essential school expenses, the expenses are to be applied against the exempt monies before the non-exempt monies and any balance representing non-exempt monies is to be considered available income prorated over the school term it is intended to cover from the time of actual receipt. In this connection, the directive includes, without limitation, as necessary and essential school expenses the following: tuition, books, fees, equipment, special clothing needs, transportation to and from school, and child-care services necessary for school attendance.
Supposedly this directive was bottomed on the proposition that the plaintiffs should not receive monies from two different public sources to cover the same necessary living expenses.
In accordance with this directive, HRA began to treat plaintiffs' receipt of SEEK and CD monies, to the extent that they exceeded plaintiffs' actual educational expenses (that is, to the extent of the living differential) as available income to be considered in computing plaintiffs' public assistance grants, and to reduce those grants accordingly. Allegedly, the reductions also reflect recoupments of "overpayments" as the directive has been applied retroactively to the beginning of the 1977-78 school term, and take into account, as income, portions of TAP, as well as CD and SEEK grants.
In light of this development, plaintiffs amended their complaint so as to challenge HRA's and the Department of Social Services' actions which resulted in the reduction of plaintiffs' public assistance awards. The amended complaint, then, alleges that the acts and policies of the university, state and city defendants violate rights guaranteed plaintiffs under the Due Process and Equal Protection Clauses of the Fourteenth Amendment to the United States Constitution as well as various federal and state statutes,
and seeks declaratory and injunctive relief. Pending the outcome of this action, plaintiffs, by this motion, seek to enjoin reductions of either their CUNY financial aid ...