Paul L. Caron

Wednesday, January 6, 2016

Ave Maria, Charleston & Thomas Jefferson Law Schools On Federal Government's Financial Watch List

ACTNational Law Journal, Three Law Schools Face Government Scrutiny Over Finances:

The U.S. Department of Education has added two law schools to its updated list of educational institutions subject to heightened financial monitoring.

Thomas Jefferson School of Law and Charleston School of Law, a for-profit school, landed on department’s so-called “heightened cash monitoring list” for the first time in December. Ave Maria School of Law has been included since the list was first released publicly in March as part of the department’s push to boost accountability and transparency.

Department spokesman Jim Bradshaw declined to specify why the three law schools were included, although each was found to have fallen short in the general category of “financial responsibility.” ...

The law schools face the lower of two tiers of financial scrutiny by the department and will be subject to further review of how they manage their cash. The higher tier of scrutiny—which the law schools so far have avoided—requires institutions to front student loan payments before receiving a reimbursement from the federal government. ...

Thomas Jefferson and Charleston School of Law are among the 77 institutions added to the list in December for a variety of reasons, including accreditation issues, late or missing financial statements, and outstanding liabilities, according to the Department of Education. Thomas Jefferson School of Law and Charleston School of Law have both faced public struggles in recent years.

Charleston’s enrollment plummeted after the for-profit chain InfiLaw Corp. launched a bid to buy the school in 2013. Many students and alumni opposed the sale and state accreditors declined to sign off. Charleston attorney Ed Bell purchased a stake in the law school in October for an undisclosed sum and said he intends to turn the school into a non-profit. ...

Thomas Jefferson School of Law has been hit by declining enrollment in recent years, although this year's new class increased slightly. It opened a new $90 million building in 2011 but restructured its debt in 2014 after missing a bond payment. That restructuring, under which the school turned the new building over to bondholders, resulted in a more than $50 million loss on paper, said Dean Thomas Guernsey. But the deal hasn't affected the school's operating budget and has actually improved its finances, he said. ...

Ave Maria’s financial composite score—a figure calculated by the Department of Education annually for each college and university based on factors such as net income ratio and reserve ratio—was .5 in 2013, which is considered “not financially responsible.”

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"Charleston School of Law founders withdrew $25 million in profits leaving school on shaky financial ground,"

Posted by: Unemployed Northeastern | Jan 6, 2016 9:43:54 AM