Hundreds of Charlotte School of Law students may not have to repay loans after all

A move taken Friday by federal education officials means up to 300 students of the defunct Charlotte School of Law may not have to repay their federal loans.

Education Secretary Betsy DeVos announced that the loan waiver, known as a “closed-school discharge,” would apply to any Charlotte Law student who was enrolled at the embattled school on or after Dec. 31, 2016.

The discharge normally includes a 120-day eligibility window, meaning students have to be enrolled on or after that date to qualify for the loan waiver. That period can be extended if the education secretary if “extraordinary circumstances” are involved.

DeVos agreed that they were. Her move Friday extends the eligibility period to 224 days, adding about a dozen new students to the loan-waiver list.

Two of the factors that likely figured into her thinking were the speed of Charlotte Law’s demise along with the allegations by students that school leaders hid the problems to maintain enrollment.

On Dec. 16, 2016, federal authorities made Charlotte Law the first accredited law school ever to be cut off from the federal-student loan program.

That severed a major financial lifeline to the for-profit school and hundreds of its students who relied on the loans for tuition and living expenses.

Dozens of students filed suit. Enrollment fell.

The uptown school, a member of the InfiLaw for-profit chain, received almost $50 million from the loan program in 2015-16, one of the highest amounts in the country. But it ran afoul of the Department of Education and the accrediting American Bar Association due to growing criticism of its curriculum, admissions policies and the cratering performance of its graduates on the state bar exam.

After losing a final appeal to be readmitted into the loan program, Charlotte Law closed for good in August 2017.

North Carolina Attorney General Josh Stein, whose office is conducting a consumer investigation of the failed school, had called on DeVos to extend relief to as many Charlotte Law students as possible.

“These students, through no fault of their own, were left with staggering debt and few options when their school abruptly closed last year,” Stein said in a statement.

“A closed-school discharge represents a real chance for those students to make a fresh start.”

This story was originally published March 9, 2018 at 6:35 PM with the headline "Hundreds of Charlotte School of Law students may not have to repay loans after all."