Federal loans set to return to struggling Charlotte School of Law

Federal loans set to return to struggling Charlotte School of Law

CHARLOTTE, NC (Michael Gordon/The Charlotte Observer) - Charlotte School of Law's high-stakes gamble on the Trump administration appears to have paid off, with the school announcing it is close to an agreement with the government that would restore vital student-loan money to the beleaguered school.

The resumption of the federal loans, the school says, would be effective with the fall semester, scheduled to begin Aug. 28.

If true, the loans will restore millions of dollars students can use for tuition and expenses that were cut off for most of the past academic year. The Department of Education cited the for-profit law school's chronic failings with test scores, curriculum and admission standards when it made Charlotte Law the first accredited law school ever to be cut off from the student-loan program.

The loss of the money last year set off faculty layoffs and hundreds of student transfers. Many of the students who stayed had no way to pay for school and rent, leading faculty members to set up an emergency food bank.

Law school President Chidi Ogene accused the Department of Education of making a political decision that gave the school and its students very little time to respond. He said at the time that Charlotte Law hoped to get a more favorable hearing when the Trump administration took office. That speculation only grew when President Donald Trump picked Betsy DeVos, a vocal supporter of for-profit schools, as secretary of education.

According to the blog Above the Law, Charlotte Law also paid $50,000 to the Podesta Group to lobby government officials on the school's behalf.

The decision to appeal now appears to have been a sound one. Charlotte Law's recent press release said it "has been notified by the U.S. Department of Education that it is prepared to reinstate the school's ability to award (student loans)."

The money will be made available under certain conditions being ironed out between the school and the federal government, conditions the school says it is willing to abide by but which it would not detail when asked by the Observer.

"We are excited at the prospect of being able to help our students complete their legal education," Paul Meggett, who was named the school's interim dean in June, said in the school's statement.

A Department of Education spokesman acknowledged that discussions with Charlotte Law are ongoing, but added, "Until the discussions reach a successful conclusion, CSL will remain ineligible to participate in the (student loan) programs."

If the loans are restored as expected, it's unclear how many will be needed. The school did not respond to questions about its current enrollment or how many students it expects to show up on Aug. 28. Charlotte attorney Lee Robertson Jr., president of the school's alumni association, said he last heard that the school still had about 120 students but that the number may have have fallen further.

Students began seeking transfers in November when the American Bar Association placed the school on probation, citing "substantial" and "persistent" problems with bar exam test scores, admissions and quality of curriculum. The transfer requests continued in December when the Department of Education cut off the loan money only weeks before the resumption of classes. The loans totaled almost $50 million during the 2015-16 school year.

Dozens of students have since filed suit against Charlotte Law, claiming that school leaders hid problems with the bar association and government regulators to maintain the flow of tuition checks. The state Attorney General's Office is investigating the school for possible consumer fraud.

The school also has a deadline this week to prove to the UNC Board of Governors that it is financially viable. Meggett said Charlotte Law "continues to work closely with the American Bar Association and the UNC Board of Governors to resolve all remaining compliance-related matters."

Last year, the alumni and faculty asked Ogene to resign. On Monday, Robertson sounded a far more optimistic note, saying he was "thrilled" that the loan program appeared to be back.

"This is not the only hurdle – there are still investigations with the ABA, the Board of Governors and the attorney general's office to resolve," he said. "But we are hopeful that this is a significant first step in the right direction.