Attorney General tells Charlotte School of Law: Close or be closed

A series of setbacks this month appears to have placed Charlotte School of Law’s immediate future in jeopardy
A series of setbacks this month appears to have placed Charlotte School of Law’s immediate future in jeopardy Observer staff

The death of embattled Charlotte School of Law seemed to draw closer Tuesday after the North Carolina Attorney General’s Office ordered it to close.

Attorney General Josh Stein says he formally notified the U.S. Department of Education that the for-profit law school is no longer licensed to operate in the state, according to a statement.

“Charlotte School of Law is required to be closed. If it won’t, the Attorney General will take action to ensure it complies.”

The statement capped a series of setbacks that appeared to undercut the school’s flickering chances of survival. On Monday, the American Bar Association rejected Charlotte Law’s “teach-out” plan that would have allowed its remaining students to finish their legal educations in Charlotte.

Also on Tuesday, the University of North Carolina, citing the school’s failure to prove it is financial viable, formally rejected the school’s appeal to extend the operating license UNC revoked last week.

Charlotte Law leaders and faculty did not reply to Observer emails seeking questions Tuesday.

But Charlotte attorney Lee Robertson Jr, president of the school’s alumni association, said the school’s faculty has been notified that the school will be closed. The students were to be told Tuesday, he said.

Last week, school leaders said they were optimistic classes would open on schedule Aug. 28. Tuesday, its website had been taken down.

“Unfortunately, this appears to be the end for the Charlotte School of Law,” Robertson said. “This is distressing news, especially for the students who were preparing to return to campus in two weeks. It’s very scary news for our faculty, who were relying on their jobs to support their families.

“For our alumni, this news is extremely frustrating. The value of our degrees – and our professional reputations – depend in large part on how our colleagues, and the public, perceive us. It is tremendously disappointing that our alumni will likely now have to explain that their law school closed.”

During a February 8th, 2017 interview Chidi Ogene, president of the Charlotte School of Law, says the school plans to talk with the new Secretary of Education about the loss of tens of millions of dollars in federal student aid.

The potential closing caps off a tumultuous year in which the 11-year-old law school was first placed under probation by the bar association before becoming the first accredited U.S. law school in history to be thrown out of the federal student-loan program, the financial life line of higher education.

Charlotte School of Law was cited for chronic problems with admissions, curriculum and test scores on the state bar exam that were North Carolina’s lowest. The Department of Education also accused school leaders of attempting to hide the extent of the problems from students and their families, to maintain both enrollment and the flow of tuition money.

Faculty was slashed, and enrollment fell from a one-time high of 1,400 to less than 100 students, and the spring semester was delayed by several weeks. Dozens of students have since sued the school, alleging fraud and misrepresentation. The Attorney General’s Office also is investigating.

Former student Ephraim Mosley said Tuesday that he found it “sad and unfortunate that CSL has been forced to close.”

“However, the position that CSL has put many students and faculty members in is even more disheartening. This is definitely uncharted territory for a law school ... so many students are left having to pick up the pieces from the fiasco that CSL has created,” Mosley said.

Margaret Kocaj of Charlotte, a 2017 graduate of the school, said students and teachers have been left in limbo by the silence of school leaders in recent days.

“This is a mess. I can sort of understand their deer-in-the headlights, ‘We’re not going to do a damn thing until we hear from one of these governing bodies on what we’re allowed to do,’ ” Kocaj said. “It’s up to someone to direct them to wind this down ... They can’t just walk away.”

In retrospect, the loss of the student-loan money appears irreversibly crippling. As recently as 2015, Charlotte Law students received $50 million from the federal program. Last year, Charlotte Law students who were cut off from loans they needed to pay tuition and living expenses, had to rely on food banks set up by their teachers.

UNC, which licenses post-secondary institutions in the state, made the school’s return to the loan program a condition for a renewal of its license. That license expired Friday with Charlotte Law still negotiating with the Department of Education.

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. As with many of the statements issued by the school over the past year, that, too, now appears to have been overly optimistic.

According to multiple reports, the Department of Education was 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 had to have a Dec. 31, 2018, expiration date.

In his statement, Stein expressed his “disappointment for the students and their families affected by Charlotte School of Law’s failure,” and said the investigation of the school by his consumer-protection staff continues.

Stein said he has written Secretary of Education Betsy DeVos, advocating that she expand loan-forgiveness protections for former Charlotte Law students who qualify.

In an statement Friday to faculty and students, dean Paul Meggett said the school was “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 believed the school could be readmitted to the school-loan program as early as this week.

According to an email Robertson sent to fellow alumni Tuesday morning, Meggett was no longer so optimistic in a conversation with the alumni president Monday night.

“It appears that there is no path forward,” Robertson wrote. “Our law school, it seems, is closing, effective immediately.”

Michael Gordon: 704-358-5095, @MikeGordonOBS