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Will This Law School Close After Feds Cut Funding? (Perspective)

Dec. 19, 2016, 7:29 PM

Charlotte School of Law may be on the brink of closure, which, as I have argued, would be the just result for a school that continues to exploit students.

On Monday, the U.S. Department of Education announced it will end Charlotte School of Law’s access to federal student financial aid, also known as Title IV funds.

As a result, students who plan to enroll next semester, which begins Jan 9, 2017, can no longer receive federal student loans.

Charlotte Law is among several dozen law schools that my organization, Law School Transparency, identified as using exploitative admissions and retention policies.We argue these schools adopted such policies to maintain the flow of tuition dollars, usually paid for with federal student loans.

The announcement is a huge hit for the school and its investors: During the previous two academic years, Charlotte Law drew almost $114 million in Title IV funds, according to the Department of Education. In addition, the school took more than $100 million in estimated, additional Title IV funds in the preceding years. Charlotte Law is a for-profit member institution in the InfiLaw System, and is owned by Sterling Capital Partners, L.P., a fund that specializes in small- to middle-market and buyout investments.

No one from the school was available for comment.

A little background on what the Dept. of Education is doing: Some but not all schools must apply for certification periodically to maintain access to Title IV funds. This year, the Dept. of Education rejected Charlotte Law School’s application for such funds, citing two independent reasons, according to a letter available online.

As the letter explains, the American Bar Association Section of Legal Education and Admissions to the Bar, which is the federally-recognized accreditor for J.D. programs in the U.S., determined that Charlotte Law is and has been out of compliance with ABA accreditation standards on a “substantial” and “persistent” basis. Last month, it placed the school on probation for its low bar passage rates and failure to adequately prepare its students.

The ABA recently placed Charlotte Law on probation for noncompliance with three different standards and found that:

[T]he Law School has not demonstrated that it is maintaining a rigorous program of legal education that prepares its students, upon graduation, for admission to the bar and for effective, ethical, and responsible participation as members of the legal profession; maintaining sound admissions policies and practices consistent with the Standards, its mission, and the objectives of its program of legal education; or is admitting applicants who do not appear capable of satisfactorily completing its program of legal education and being admitted to the bar.

While the ABA has not yet revoked Charlotte Law’s accreditation, the Dept. of Education denied it eligibility for Title IV funds, based on its independent finding that the school does not meet the standards set forth by the ABA.

It has persistently low bar passage rates, according to the ABA stats. The school’s first-time bar passage rate was 46.3 percent in 2015. I expect the rate to be even lower through at least 2019, if the school survives that long.

The school also fails many students out, causing the Dept. of Education to find that the school’s admissions process does not adequately keep students out who do not appear capable of completing the program. Nearly half of Charlotte Law students starting in 2015 left school for non-transfer reasons, a substantial portion of which were academically dismissed according to data published by the ABA.

Aside from its academic preparation of students, the Dept. of Education also faulted Charlotte Law for making “substantial misrepresentations regarding the nature of its academic program” in violation of federal regulation, 34 C.F.R Part 668, Subpart F.

The Dept. of Education said in a press release that prior to the ABA announcing probation for Charlotte Law in November 2016, it is “unaware of any public statements [from Charlotte Law] that would have informed a student or prospective student that the ABA had found the school to be out of compliance with the Standards.”

According to a press release, “This action furthers the Department’s commitment to vigorously protect students, safeguard taxpayer dollars, and increase institutional accountability among postsecondary institutions.”

U.S. Undersecretary of Education Ted Mitchell said that “CSL’s actions were misleading and dishonest. We can no longer allow them continued access to federal student aid.”

Charlotte School of Law is not the only law school operating shamelessly to the detriment of the legal profession. This school, like several dozen more, set large percentages of their students up to fail, leaving them with high debts, wasted time, no job, and no hope. It’s long past time for these schools to go.