An Embattled N.C. For-Profit Law School Is Reportedly Shutting Down

August 15, 2017, 5:53 PM UTC
Charlotte Towers and Bobcats Arena
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The for-profit Charlotte School of Law is reportedly shutting down, according to television station WBTV News in Charlotte, North Carolina. The private equity-owned school failed to meet various government deadlines set months after the Obama administration shut off its ability to receive proceeds from federal student loans.

The head of the school’s alumni association, R. Lee Robertson Jr., sent an email Tuesday morning to fellow alums warning them that the school was likely to inform current students of the closure later in the day. The school’s website was down as of Tuesday morning.

Charlotte Law spokeswoman Victoria Taylor and Robertson didn’t immediately respond to requests for comment. Neither Josh Ellis, a spokesman for the UNC system, which regulates the school, nor Liz Hill, a spokeswoman for the U.S. Department of Education, had an immediate comment.

The closure would instantly make the school’s current students eligible to have their federal student loans canceled. Some 100 students were enrolled as of June, according to the UNC system, with an additional 70 on temporary leave.

More than nine in 10 Charlotte Law students borrow money from the Education Department to pay for classes, leaving a potentially hefty bill in the form of forgone future interest payments if those loans are canceled. The feds would have the right to seek reimbursement from Charlotte Law’s owners, which also own two other law schools: Arizona Summit and Florida Coastal. The law schools are indirectly owned by two funds operated by Sterling Partners, a Chicago-based private equity firm.

Charlotte Law’s troubles began in December, when the Education Department concluded that the school had misled its students about its accreditation and the bar-passage rates of former students and then cut off Charlotte Law’s access to federal student aid funds. The school denied the allegations and spent several months trying to convince the feds to reverse their decision. Charlotte Law hired Lauren Maddox, a lobbyist with the Podesta Group in Washington, to influence Congress and the Education Department. Maddox had previously steered Education Secretary Betsy DeVos through her confirmation hearings. The department offered the school a lifeline after it hired Maddox.

The school still had to persuade its accreditor and state regulator that it was financially viable and should remain open. It appears that those efforts ultimately failed.