Globe University, Minnesota School of Business denied access to federal student loans

Effective December 31, 2016, the Minnesota School of Business and Globe University are dropped from the federal student loan program. The for-profit schools are denied access to the federal student loan funds as they were “judicially determined to have committed fraud involving Title IV program funds,” and “knowingly misrepresented the nature of their criminal justice programs and transferability of credits earned to other institutions.”

This decision comes shortly after the September ruling where a district court judge found Globe University and the Minnesota School of Business guilty of defrauding students. The state claimed that the schools severely mislead students by dramatically inflating their job placement rates, aggressively selling an education where the majority of credits aren’t transferrable and offering a criminal justice program that the Minnesota police department’s don’t recognize or accept.

U.S. Under Secretary of Ted Mitchell states, “Globe and MSB preyed upon potential public servants – targeting those with a sincere desire to help their communities.” “These institutions misrepresented their programs, potentially misleading students, and abused taxpayer funds, and so violated federal law, which is why we removed them from the federal student aid program. This is a sober reminder that not all institutions deliver on their advertised promises.”

Globe and MSB disagree with these statements and claim their programs were in full compliance with state law and that the criminal justice program is no longer in operation.

On Tuesday letters were sent to the schools notifying them that their application for re-certification to participate in the Title IV federal aid programs has been denied. The letters also confirm effective Dec. 31, 2016, students at both schools will no longer be able to use federal aid such as Pell grants or Direct Loans to pursue studies at these institutions. The denial of recertification notice from the Department of Education reads as follows:

After a thorough review of applications for re-certification by the Minnesota School of Business (MSB) and Globe University (Globe), an evaluation of evidence presented at trial before the District Court in Minnesota* and information identified through various departmental oversight and monitoring processes, the U.S. Department of Education (ED) issued letters on Dec. 6, 2016, to MSB and to Globe notifying them that ED has denied re-certification of each institution’s eligibility to participate in the federal student aid programs. (Read the letter to MSB and the letter to Globe.) ED took this step after finding that MSB and Globe are ineligible to participate in the federal student aid programs because MSB and Globe have been judicially determined to have committed fraud involving federal student aid funds. In addition, ED determined that MSB and Globe substantially misrepresented the nature of their criminal justice programs and that MSB and Globe substantially misrepresented their students’ ability to transfer credits earned at MSB and Globe to other institutions.

The schools have until December 20, 2016 to provide the ED with factual evidence to dispute its findings. If the evidence is persuasive and causes the ED to change their decision, both schools may be approved for recertification and would regain theirs rights to the program funds.

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