Tony Silva, administrator at the DMV, said the Providence Driving School has six licenses to operate driving education courses. Silva said they are suspending the school's licenses to protect the public in light of the accusations.
The DMV regulates all driving schools and instructors in Rhode Island.
A hearing on the school's suspension will be held.
Police said 65-year-old Hector Ramirez gave the woman what she thought was a mint during the lesson and she started feeling dizzy and tired. The woman told police she parked the car and felt Ramirez fondling her as she fell asleep.
Police said the woman later woke up in the car outside her family's house, and she was taken to a hospital for tests. Police said they're waiting for those test results.
Ramirez was charged with two counts of second-degree sexual assault on Jan. 31, and appeared in Providence District Court on Monday. He's free on bail.
The Associated Press contributed to this report.