Teach-out plan for Charlotte School of Law in the works
Updated: Charlotte School of Law will file a teach-out plan, which the council of the ABA’s Section of Legal Education and Admissions to the Bar will review, managing director Barry A. Currier told the ABA Journal on Tuesday.
The U.S. Department of Education website for federal loans describes teach-out plans as “a written course of action a school that is closing will take to ensure its students are treated fairly with regard to finishing their programs of study.”
If a school closes while students are enrolled, and the closure prevents them from completing their programs, students could be eligible for 100 percent discharge of Direct Loans related to the program, according to the site. It also notes that loan discharge could be available to students if their school closes within 120 days after someone withdraws from the program.
Heather Jarvis, a North Carolina attorney who provides educational resources and training for student-loan borrowers, advises law students offered teach-out plans to carefully consider all their options before accepting the agreements.
If law students transfer credits to a new school, she says, they would not be eligible for federal loan discharge. If someone decided to start over as a first-year student at a new law school, Jarvis adds, he or she likely would be able to discharge prior law school loans.
“Students should be entirely clear on their options and ask as many questions as they need to fully weigh a difficult decision. And consideration of whether to accept a teach-out plan should be informed by where you are in your law school curriculum,” says Jarvis, who acknowledges that loan discharge for law students could be a matter of first impression.
Charlotte School of Law mentioned a teach-out plan Friday on its website.
“The plan will involve collaboration with another ABA-accredited law school to participate in the teach-out,” the post reads. It does not specify which law school that is, but did note that classes will begin Jan. 23.
“While we have not yet reached an agreement with the Department of Education respecting the precise conditions for the release of the second disbursement of Direct Loan proceeds to those students entitled to such funding, we and the department agree that there is a path forward to reach such agreement. Regardless of when agreement for the release of Direct Loan proceeds is reached, Charlotte School of Law students entitled to such funds will have the anticipated amounts credited to their tuition and fee accounts.” reads the post. It was signed by Chidi Ogene, president of the law school, and Jay Conison, its dean.
Earlier in the month, the department told the ABA Journal that the agency was “in conversations” with Charlotte School of Law about students “getting an option to participate in a teach out for next semester.”
But on Wednesday, Department of Education Under Secretary Ted Mitchell clarified for eligible students in a letter that they will not be able to receive federal student aid for current or future attendance at Charlotte School of Law. “In addition, we note that if CSL continues to operate, students who attended in Fall 2016 may not be eligible for closed school discharge of federally issued student loans.”
In December, it was reported that federal loans for Charlotte School of Law students were in jeopardy after a U.S. Department of Education finding that the school made “substantial misrepresentations” to current and prospective students regarding its compliance with ABA accreditation standards.
The ABA first informed the law school that it was out of compliance with various standards in February 2016, and again in July 2016. At neither time was the information shared with current or prospective students, according to the education department. The standards in question include 301(a), which states that law schools must maintain a legal education program that prepares students to be lawyers, and 501(a) and (b), which address admissions policies and practices.
Charlotte School of Law appealed the ABA finding, which was upheld (PDF) in October. At that time, the council placed the law school on probation. It remains an ABA-accredited law school.
The ABA’s Section of Legal Education and Admissions to the Bar in December issued a FAQ sheet (PDF) about the Department of Education’s findings. It noted that the law school had been placed on probation, and the notice “spells out the process” for what the school should do to remove itself from probation status. It also stated that the Department of Education action was a “separate action” from the accreditation process.
Updated Jan. 18 to include information from U.S. Department of Education letter.
