Details emerge in nasty fight between feds and Charlotte School of Law

Charlotte School of Law said this week it rejected a government agreement that would have restored millions of dollars in federal loans because the terms betrayed its students’ futures.

On the same day of that statement, a group of students filed the third class-action lawsuit accusing the school of already doing similar damage.

The contradictory allegations add to the deepening uncertainty swirling around the uptown school as it prepares to reopen Monday. No one knows for sure how many students will show up.

Students began seeking transfers in November when the American Bar Association placed the school on probation. The transfer requests continued in December when the Department of Education made CSL the first accredited law school ever to lose access to the federal student-loan program.

Both groups cited chronic Charlotte School of Law failings in admissions, curriculum and test scores. Last year Charlotte students received almost $50 million in loans for tuition, fees and living expenses.

The future of the for-profit law school, which opened in Charlotte a decade ago, has been weakened by a series of setbacks this week.

▪ In apparent anticipation of shrunken enrollment, the school fired about two-thirds of its faculty and staff this week, sources told the Observer.

▪ On Wednesday, the education department accused the school of reneging on a deal that would have restored some of the lost student loans.

▪ Meanwhile, Raissa Levy, James Villanueva, Shanna Rivera and André McCoy became the third group of current or former students to sue the school, along with its corporate owners InfiLaw and Sterling Partners. The plaintiffs allege they were intentionally deceived about Charlotte School of Law’s chronic problems with the bar association and federal government, leaving them with devalued diplomas, diminished job prospects and, in some cases, six-figure debts.

On Thursday, the school fought back. In a statement to student, faculty and alumni, school President Chidi Ogene and Dean Jay Conison accused the Department of Education of “grossly” misrepresenting the loan negotiations and of making demands that would “deprive our students of the ability to continue their legal education”

School leaders allege that the government’s plan they rejected would have allowed third-year students graduating in May to get their diplomas, but it would have left the academic paths of the other students in jeopardy.

The Department of Education was closed Friday for the presidential inaugural, and a department spokesman could not be reached for comment.

In dispute between the two sides are the terms of a so-called “teach out” plan, which federal law requires to protect students when their school is closing. To restore students loans, the Department of Education apparently demanded that Charlotte School of Law close immediately and allow its teach-out partner, Florida Coastal School of Law in Jacksonville, to take over instruction. Charlotte School of Law refused.

“We are disappointed for CSL students and remain hopeful that CSL will choose a path that mitigates harm for those impacted by CSL’s misconduct,” said Ted Mitchell, the department’s under secretary of education.

Ogene and Conison, however, say the government’s plan would violate North Carolina law by requiring a Florida school to take over an educational program licensed by the state. A teach-out plan could only work “if we remained an active institution ... albeit under the supervision of the teach-out school,” the school leaders said.

They accuse government leaders of “pushing on with its goal of precipitously closing (CSL) without regard for the harm that would cause our students.”

They said they hope to get a fairer hearing when the Trump administration takes over the department.

This story was originally published January 20, 2017 at 3:17 PM with the headline "Details emerge in nasty fight between feds and Charlotte School of Law."