In another blow to two for-profit colleges in Minnesota that recently announced closure plans, a judge has ordered that Globe University and Minnesota School of Business to pay restitution to more than 1,200 "defrauded students," according to a report
in the Minneapolis Star-Tribune.
According to the newspaper, "Those affected will be eligible to be repaid for tuition, including student loans, payments for books and other fees, and any interest or finance charges they incurred while criminal justice students after January 2009, according to a court order signed [January 4.]"
After a trial last year in state court, a judge ruled that the schools' recruitment and marketing policies ignored or obscured requirements for licensing in criminal justice fields and "serve as a trap for the unwary."
The schools said in a statement that they were disappointed by the order and considering an appeal.
Two for-profit colleges based in Minnesota are closing their campuses in several states after the U.S. Department of Education denied them further access to federal student aid funds.
The schools, Globe University and Minnesota School of Business, offered programs in Minnesota, South Dakota and Wisconsin. According to The Chronicle of Higher Education
, the two for-profit schools were denied federal student aid in December 2016 after the U.S. Department of Education "said they had committed fraud with Title IV funding and 'knowingly misrepresented' transfer eligibility for their criminal-justice programs."
Globe has indicated that students will be able to transfer to Broadview University, another for-profit school, for "teach out purposes." Minnesota School of Business students will be able to continue in classes through January 2016, and its students in a nursing program will reportedly be able to transfer to Concordia University of St. Paul.
In a new development
in Minnesota's ongoing battle against Globe University, the state attorney general is alleging that nearly 6,000 students in Minnesota are being charged interest rates that are higher than the most that state law allows. According to attorney general Lori Swanson, Globe University students are paying interest rates on loans issued by Globe that are in the range of 18 percent when state law caps student loan interest rates at 8 percent.
A substantial jury verdict against a for-profit school in Minnesota has been upheld by a judge. As reported
in the Huffington Post, a Minnesota judge not only refused to set aside a jury verdict of $395,000 against Globe University, but also awarded $500,000 in attorney's fees to be paid by the school.
The lawsuit was filed against the for-profit school by a former dean, Heidi Weber, who claimed she had been fired for complaining to the school about use of false job placement statistics and other misconduct.
The Huffington Post reported:"Weber's suit claimed that Globe had violated a state whistleblower law when it fired her from her job as dean of the school's medical assistant program. The Washington County, MN, jury concluded that Weber was indeed fired in 2011 for raising with management that Globe was providing false information to students about placement rates, starting salaries, and the school's accreditation; failing to provide adequate training for students; and improperly paying commissions to school recruiters. The jury awarded Weber $205,000 for lost wages and $190,000 for emotional distress.
"Globe runs 11 campuses in Minnesota, Wisconsin, and South Dakota and has more than 10,000 students. From 2011 to 2012, the company obtained more than $170 million from federal student aid. More than half of Globe's students drop out without graduating; on some campuses, three-quarters drop out."
Questionable representations about job placement are a recurring problem at for-profit colleges and trade schools. If you are an employee or student at a for-profit school with concerns about representations made to students at the school that you wish to discuss with one of the attorneys operating this College Watchdogs site, call us at 877-540-8333, or complete this form