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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, January 11, 2017

Is Doomsday Imminent For Charlotte Law School? Is The ABA Going To Do Anything About The Other 2 InfiLaw Schools?

Charlotte Logo (2016)National Law Journal, Is Doomsday Imminent for Charlotte Law School?:

After Charlotte School of Law officials announced Friday that it would open for its spring semester on Jan. 19, officials at the troubled school backtracked on Monday and delayed the start until Jan. 27 as it works to secure tuition financing after losing its federal loan eligibility.

The move to postpone Charlotte Law’s spring semester was the latest blow to the school’s more than 700 students, who have been in limbo since the U.S. Department of Education announced Dec. 19 that it would withhold federal loans from Charlotte Law students over what it deemed accreditation shortfalls and misleading information about bar passage rates.

School officials said they were working on funding options for students, and a spokesman for the U.S. Department of Education said it was working with the school on a plan to enable existing students to complete their studies or transfer. The plan calls for no new students at Charlotte Law.

So what does the financial crisis mean for the future of Charlotte Law and its students? We spoke with Ben Miller, senior director of postsecondary education at the Center for American Progress, about what options the law school and its students have without access to federal loans, which are the key source of funding for most institutions of higher education. Miller is an expert in higher education accountability and previously worked in the Education Department.

Q: Is losing federal student loans a death sentence for the school?

A: It depends. For a rich school, it would probably hurt a little bit, but they would survive. Princeton [University] does not need the federal financial aid dollars to survive. Probably every private for-profit and most other schools do need the federal student aid dollars to survive. I would imagine, for Charlotte [Law], it probably would be a death blow. ..

Q: What are other developments do you expect to see out of this situation?

A: The question is, “Are the problems with Charlotte unique to Charlotte, or are the rest of the Infilaw schools in similarly challenging spots?” I think if I were the [American Bar Association] and saw this, I would probably say, “Hey, maybe we should look at the other two.” So there’s a question, “Is the ABA going to do anything?”

Charlotte Observer, Is Charlotte School of Law Taking Steps to Shut Down?:

The future of the troubled Charlotte School of Law appeared even murkier Tuesday after the Department of Education confirmed discussions with school leaders about a government program typically reserved for schools closing their doors.

In response to a series of Observer questions this week about the school’s status, a department spokesman acknowledged that it is in “conversations with Charlotte School of Law about students getting an option to participate in a teach out for next semester.”

On its website, the department defines a teach out as “a written course of action a school that is closing will take to ensure its students are treated fairly with regard to finishing their programs of study.”

Whether the teach-out discussions indicate that Charlotte School of Law is shutting down remained unclear Tuesday.

ABA Journal, Charlotte School of Law Students Reportedly Will Receive Spring Loan Money:

Spring semester student loan proceeds for Charlotte School of Law students will be disbursed, a school spokesperson told the ABA Journal on Tuesday. Students were informed Tuesday that the spring semester, previously announced as starting Jan 17, would begin Jan. 23 “to aid in a smooth transition.” ...

[T]he school reported that it was working on getting students awarded Federal Direct Loans their money, and that it is also looking into “bridge financing” for loan proceeds that would cover things besides tuition and fees. The post also noted that the school was exploring private loans for students, including institutional loans.

David Frakt, Law School Transparency’s Call for Greater Transparency from InfiLaw Yields Immediate Results from Florida Coastal:

On January 9, 2017, in an apparent response to these calls for greater transparency, Florida Coastal released a statement to its students and to some media outlets about an area of non-compliance with regulatory standards that it had not previously publicly disclosed, specifically, that the Department of Education has recently published the Gainful Employment (GE) results and Florida Coastal failed.  If a school fails this test in two out of three years (or two years in a row), then it will lose access to Federal student loan funding from the Department of Education, so this is clearly information that both current and prospective Florida Coastal students are entitled to know.  The results were publicly released on November 23, 2016, so Florida Coastal has known about the results for at least several weeks.

Prior TaxProf Blog coverage:

http://taxprof.typepad.com/taxprof_blog/2017/01/is-doomsday-imminent-for-charlotte-law-school-is-the-aba-going-to-do-anything-about-the-other-2-infi.html

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Comments

to answer your questions: Yes and No.

Posted by: anon | Jan 11, 2017 7:43:47 AM