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Posted Jan 11, 2017 05:30 pm CST
Two for-profit law schools are not meeting the U.S. Department of Education’s gainful employment standard, which measures debt-to-earnings ratios, the agency reported Monday.
If Florida Coastal School of Law and Charleston School of Law fail the gainful employment standard again next year, they lose access to federal student aid, the National Law Journal reports.
The Infilaw System owns Florida Coastal. Two of its other law schools, Charlotte School of Law and Arizona Summit Law School, were given a “zone” rating by the Department of Education, which found that the schools were close to not meeting gainful employment standards, and must pass the gainful employment standard in one of the next four years to stay in good standing.
Federal student aid for Charlotte School of Law students is already in jeopardy, after the department in December found that the school made “substantial misrepresentations” to current and prospective students regarding its compliance with ABA accreditation standards. This fall, the ABA placed the Charlotte School of Law on probation, but it remains an accredited law school.
A Charlotte School of Law spokesperson told the ABA Journal on Jan. 10 that spring semester student loan proceeds will be disbursed. A Department of Education spokesperson would not comment on whether that was correct, but he disclosed that the agency was “in conversations” with the law school about students “getting an option to participate in a teach out for next semester. ”
Western State College of Law, a California school owned by Education Management Corporation, also received a zone rating by the department.
The gainful employment standard was introduced in 2010 by the Department of Education. To meet the standard, graduates’ annual loan payments must be less than 12 percent of their total earnings or less than 30 percent of their discretionary income, the National Law Journal reports.
According to the article, Scott DeVito, dean of Florida Coastal, told students in a letter this week that the school appealed the department finding.
“[The rule] is not about protecting students and taxpayers,” he wrote. “It is part of an anti-for-profit political agenda.” Nearly all of the more than 800 institutions that failed to meet the gainful employment standard were for-profit institutions, the National Law Journal reported.
More information about the department’s 2016 findings can be found at this Department of Education press release.
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