Charlotte School of Law could once again become eligible to receive federal student loans — a crucial tool students use to pay their tuition — but must first offer newer students a refund.
The for-profit law school must also secure a line of credit that would put the school on solid financial footing if it has to wind down operations, according to a letter from the U.S. Department of Education to Charlotte School of Law president Chidi Ogene, which was published by the ABA Journal.
The potential deal is the first major ray of hope for the law school, whose future was thrown into doubt last fall when it was put on probation by the American Bar Association for admitting unqualified students. A month later, the federal government stripped it of the ability to receive student loans.
Charlotte School of Law officials called the potential deal “good news” and said they were “excited at the prospect of being able to help our students complete their legal education,” according to a statement on the school’s website.
It’s still unclear whether Charlotte School of Law hopes to remain open long-term or if the focus is solely on helping current students graduate.
The deal with the U.S. Department of Education indicates it could go either way.
To regain the federal student loan funding, the school must give students who have not yet completed two semesters the option to receive a full refund. This refund could be in the form of federal or private loan repayment, or the return of any money paid directly by the student.
The conditions also state that CSL must have a $6 million letter of credit, which would be used to pay for refunds to current and former students, finance a “teach out” plan to graduate remaining students, and pay any fines.
Charlotte School of Law is still unable to accept new students, and must retain an independent monitor for three years.
Officials at Charlotte School of Law did not return a request for comment, but according to the statement on its website, the school plans to comply with the conditions, which are currently under discussion.
A U.S. Department of Education told the Agenda by email that as of today, Charlotte School of Law is ineligible for federal student loans and that discussions remain ongoing.
Classes for the fall semester are scheduled to start on August 28.