One of the country’s lowest-performing law schools had its supply of federal student loans cut off Monday, likely meaning the school will have to shut down in the near future.
Federal regulators say Charlotte School of Law engaged in various “dishonest” practices to lure in students, and have punished the school by denying it any further access to federal loan money.
“The [American Bar Association] repeatedly found that the Charlotte School of Law does not prepare students for participation in the legal profession,” said U.S. Under Secretary of Education Ted Mitchell in a statement. “Yet CSL continuously misrepresented itself to current and prospective students as hitting the mark. CSL’s actions were misleading and dishonest. We can no longer allow them continued access to federal student aid.”
The ruling means that, starting in January, students must pay out-of-pocket or take out private loans to attend the school. Charlotte and similar schools are extremely dependent on federal student loans, though, meaning it is unlikely to survive without them. The school is also vulnerable because it is an independent law school unattached to a larger university, so it must sink or swim on its own with no larger school that can subsidize it. In the 2015-16 school year, Charlotte received more than $48 million in federal funds.
Even before the announcement, Charlotte was experiencing tough times. The for-profit school, which costs $44,000 per year to attend plus living expenses, has had its enrollment drop from more about 1,400 students to about half that today. In November it was placed on probation by the ABA, which accused the school of admitting students who did not have a meaningful hope of successfully passing the bar exam. Only 45 percent of graduates passed the most recent North Carolina bar exam, 20 points below the state average.
In a statement released Tuesday, the school defended itself from the Department of Education’s accusations.
“We strongly disagree with this determination and are evaluating all available options to challenge the decision, particularly the Department of Education’s mischaracterization of CharlotteLaw’s academic accreditation from the American Bar Association (ABA) and our representation of that status,” the statement said.
Charlotte is the second law school in the past two months to receive devastating news. In early November, officials announced the upcoming closure of Indiana Tech Law School, a small recently-opened law school that was denied accreditation by the American Bar Association. (RELATED: A Law School Was Finally So Awful It Shut Down)
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