Three weeks before class, UNC says Charlotte School of Law’s license expired

Charlotte Law has had its license revoked by UNC for failing to prove its financial viability. School leaders said Friday they hope to open classes on schedule on Aug. 28
Charlotte Law has had its license revoked by UNC for failing to prove its financial viability. School leaders said Friday they hope to open classes on schedule on Aug. 28 Observer file

Shortly before the start of its fall semester, the beleaguered Charlotte School of Law no longer has the license it needs to open for classes.

The University of North Carolina announced Friday that Charlotte Law’s temporary license has been revoked under the terms of an earlier agreement, due to the uptown school’s failure to be readmitted to the federal student-loan program.

In a statement to faculty and students Friday afternoon, interim dean Paul Meggett said school leaders remain hopeful about meeting the conditions set by state and federal regulators and reopening on time.

In December, the for-profit institution became the country’s first-ever accredited law school to be expelled from the student loan program, which pumped more than $50 million into Charlotte Law as recently as 2015.

In announcing that unprecedented move, the Department of Education cited the school’s long-running problems with admissions, curriculum and bar exam test scores. The department accused school leaders of misleading students and families over the extent of its problems to maintain enrollment and the flow of tuition money.

In late July, Charlotte Law announced it was close to an agreement with the federal government that would restore the student loans in time for the fall semester, scheduled to begin Aug. 28.

A Department of Education spokesman, while acknowledging that discussions with the school were underway, said at the time that Charlotte Law had not met the conditions needed to get the loans. On Friday, the spokesman repeated that message, saying, “Negotiations are ongoing, and no agreement has been reached yet.”

According to multiple reports, the federal agency is requiring Charlotte Law to present a $6 million letter of credit to cover a series of real or potential costs, including a teach-out plan for its remaining students; any refunds current or former students might demand; and any fines that may be handed down against the school by the federal government. The credit line must have a Dec. 31, 2018, expiration date.

UNC, which licenses higher-education institutions in the state, made Charlotte Law’s readmission to the student loan program a mandatory condition of the school proving its financial viability.

Charlotte Law has been licensed by UNC since 2005. On June 21, UNC placed the law school on a restricted license that prohibited it from admitting new students. Since being placed on probation by the American Bar Association in 2016, CSL’s enrollment, once as high as 1,400, had dropped to about 100. The faculty also has been slashed.

On Friday, at least for now, Charlotte Law’s time to meet UNC’s conditions ran out.

“As of today, according to the provisions of the June 21 license restriction, CSL’s license expired” due to its failure to be readmitted into the student-loan program, said UNC spokesman Josh Ellis.

Charlotte Law has asked for additional time to meet UNC’s conditions, Ellis said, which would require a decision by the UNC Board of Governors.

In response to Observer questions Friday, the school said it asked for more time to meet all of UNC conditions “as we believe we will be able to demonstrate compliance in short order.”

In an earlier statement to faculty and students, Meggett said the school is “working diligently” to reopen in three weeks.

“Contrary to what you may have heard or read, the UNC Board of Governors has not declared that CSL’s license has expired,” Meggett said, adding that he believes the school may be readmitted to the school-loan program as early as next week.

However, Charlotte attorney Lee Robertson, president of the school’s alumni association, described his school’s loss of its UNC license as “disappointing and distressing news.”

Robertson said he hopes for an extension from the Board of Governors “to permit the Department of Education to make a final decision on the law school’s application for federal funding.”

In June, Charlotte Law officials told UNC’s General Administration that it has a remedial plan to continue operations and restructure its debt. At the time, the school said it had 11 first-year students, 55 second-year students and 34 third-year students. In addition, 73 students had taken a leave of absence, meaning they were no longer enrolled but haven’t officially withdrawn.

The school has indicated that many of its remaining active students want to finish their education at the school because they don’t have other options in the area.

UNC board member Joe Knott questioned at the time if keeping Charlotte Law open was in anyone’s best interests.

“I’m wondering, from all that I’ve heard about this school, is allowing the students to remain in such a school actually doing them any favors?” Knott asked. “Would it not be better for them to stop this endeavor and find an educational opportunity at a better school?”

Dozens of Charlotte Law students have sued their school, accusing it of collecting tuition while hiding the true extent of its problems. The school is also under investigation by the consumer-protection division of the N.C. Attorney General’s Office.

Michael Gordon: 704-358-5095, @MikeGordonOBS