Law Schools, Student Loans

Troubled Law School, Under Investigation By State Attorney General, Hopes Betsy DeVos Will Come To Its Rescue

You'd think that nothing else could possibly go wrong for this embattled law school -- but you'd be wrong.

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student-loan-debtCharlotte School of Law has been through the wringer in recent months. From being placed on probation by the American Bar Association over its graduates’ repeated bar failures to being booted from the federal student loan program by the Department of Education to coming perilously close to failing the Department of Education’s gainful employment test to posting the worst bar exam passage rates in the school’s history to having two deans quit, one right after the other, you’d think that nothing else could possibly go wrong for this embattled law school — but you’d be wrong.

Not only has North Carolina Attorney General Josh Stein opened an investigation into the for-profit law school, but the University of North Carolina system, which regulates for-profit colleges in the state, has also opened a review of the law school’s state operating license. We’ll tackle what’s going on with the state attorney general’s office first, as Stein is “very concerned about the current situation at the school” — as he should be, all things considered.

According to POLITICO, which first reported on this story, Stein is “investigating the school under the state’s civil consumer protection laws,” looking into Charlotte Law’s potential closure, and questioning the school’s attempts to restore its access to federal loans. It seems that the Department of Education, under the reign of Secretary Betsy DeVos, actually invited Charlotte Law to reapply for federal funding. In the hope that the Trump administration would be a little more receptive to the failing for-profit institution, Charlotte Law did just that on March 29 — “at the direct suggestion of a top department official” — with the school’s president, Chidi Ogene, urging DeVos to give “all possible priority” to its reinstatement application. There’s just one catch…

With the law school on the brink of closure thanks to its lack of federal student loan funding, hundreds of students jumped ship in late December and January, and the ticking time bomb that is known as the closed school discharge began. Under federal law, students may be eligible for a complete discharge of their federal loans if their school closes while they’re enrolled and they’re unable to complete their degree programs because of the closure, or if their school closes within 120 days of their having withdrawn. Stein is understandably concerned that Charlotte Law’s new wranglings with the DeVos Education Department may disadvantage former students, preventing them from obtaining full loan discharges. POLITICO has more information:

Stein’s office wrote in a letter to DeVos earlier this month that Charlotte School of Law and its owners and investors have a “vested interest in continuing to operate to decrease their potential liability” for the cost of loan discharges. Even if Charlotte School of Law closes, its parent company InfiLaw — which owns two other for-profit law schools — would still be on the hook for potentially millions of dollars worth of loan discharges. The letter from Stein’s office, which was obtained by POLITICO, urges DeVos to “not allow any self-serving delay” by the school in closing and to expand the 120-day window for closed school discharges.

Despite the fact that many in legal academia have been waiting for Charlotte Law to formally announce that it would be closing, and despite the fact that the school has already arranged a teach-out program with sister school Florida Coastal School of Law, Ogene has dismissed Stein’s closure concerns as “premature and improper.”

As for the other regulating body that’s investigating Charlotte Law, the University of North Carolina system, under the guidance of UNC President Margaret Spellings, will make a recommendation to the UNC Board of Governors as to whether the school should be allowed to retain its license to operate within the state. The board meets next in about one month from now, where this issue will likely be discussed.

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What the future holds for the Charlotte School of Law is unclear, but with the way things have progressed, it looks like for-profit law schools that are in trouble (e.g., Arizona Summit and Charlotte) may have a friend in Education Secretary Betsy DeVos — which is good for the schools, and their investors — but not necessarily as beneficial to the students who are indebted to them to the tune of hundreds of thousands of dollars.

North Carolina opens investigation into for-profit law school [Morning Education / POLITICO]

Staci ZaretskyStaci Zaretsky is an editor at Above the Law. She’d love to hear from you, so feel free to email her with any tips, questions, or comments. You can follow her on Twitter or connect with her on LinkedIn.

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