Globe University & Minnesota School of Business Lawsuit with the Minnesota Attorney

General Background:

In July 2014, the Minnesota Attorney General filed suit against Globe University and Minnesota School of Business on a number of claims that it misled students, all but one of which have now been found unsubstantiated by the Court. Before trial began, the Judge issued a summary judgment in our favor ruling the Colleges’ institutional loans were in full compliance of the law. An Appellate Court upheld that ruling on Sept. 12. During a month-long trial this past April, a number of current and former employees, students, and graduates testified in our favor, sharing the difference career-education has made in their lives and the ‘We Care’ mission they experience in action at our schools.

 Ruling:

On Sept. 8, 2016, a Hennepin County District Judge found the Schools’ current operations are in full compliance with state law and contrary to the Attorney General’s allegations, did not deceive or mislead current or prospective students regarding accreditation, transfer of credits, job placement rates or during their interactions with admissions representatives. Of particular importance, the Court found ‘The admissions representative generally acted in accordance with the ‘We Care’ mission declared by the schools in the post-admissions interactions with students, and that, consistent with that philosophy, they had the students’ best interest at heart.

However, the Judge did find that despite disclaimers and waivers stating the contrary, some of the Schools’ promotion of its now-ceased criminal justice program misled students into believing they could become a police officer in Minnesota and probation officers with a two-year degree. The finding was based on the testimony of 15 students, only one of which filed a formal grievance with the school and that student was issued a full refund. The Schools tried several times to reach a reasonable resolution with the Attorney General on the issue, but she remained unwilling to work with us. It is clear the AG’s goal from the very beginning has been to put the schools out of business rather that work collaboratively in the best interest of all students and residents of Minnesota.

 Revocation:

As a result of the criminal justice finding, the Minnesota Office of Higher Education (MOHE) sent an order to the Schools on Sept. 15, 2016, revoking Globe University and Minnesota School of Business’ registration to operate in Minnesota. The Colleges have appealed and are now pursuing that process. The Order is not effective until that process is complete. While the OHE, on the advice of the Minnesota Attorney General’s Office, believes it was required by law to issue the revocation, the Schools disagree and believe the language in the statute gives them clear discretion on the matter.

Denial of Title IV Funding:

On Dec. 6, 2016, the U.S. Department of Education (USDE) announced its decision to deny Globe’s and MSB’s participation in the Title IV student financial aid programs. As a result of that decision, Globe University & Minnesota School of Business announced preparations for teach-out agreements, articulation/transfer agreements with other institutions, plans to close locations and reductions in employment.

The Schools plan to appeal the USDE decision but, so far, we have encountered more barriers than success. We have appealed MN OHE’s revocation. We expect the final Court Order from the Minnesota District Court on what sort of injunction will be ordered. We are hopeful this decision will provide more clarity for regulators.

Final Order:

On Wednesday, Jan. 5, 2017, the Court’s final order was limited to one program—criminal justice—which has not been offered for more than two years and which represented a small portion of the Schools’ overall student population at any given time. We are disappointed that the Court’s findings, based on the testimony of only 16 students, have resulted in such significant harm to the education and degrees of tens of thousands of students and alumni. The schools will continue to work with regulators, complete our teach-outs, and encourage other institutions to help students. We continue to weigh all of our options, including an appeal.