Funding is now available to alumni of the Minnesota School of Business and Globe University who have taken out federal loans or attended the criminal justice program of disgraced colleges.
The Minnesota attorney general on Thursday announced $ 23.6 million in federal student loan forgiveness and an additional $ 15.6 million refund for approximately 3,000 former students who were granted illegal loans and 920 former students who Enrolled in the colleges’ fraudulent criminal justice program.
The payments are part of an agreement that settles a Minnesota state lawsuit against the schools in 2014 for alleged consumer fraud and illegal lending practices. After reaching an agreement in March, the U.S. Department of Education and a federal bankruptcy court approved the payments, which began Thursday.
Attorney General Keith Ellison said in a press release he was “unhappy” for the students who participated in the schools’ criminal justice programs because they wasted their time and money and faced crippling debt.
“As of today, the money will finally be pouring back into the pockets of students who were defrauded and charged illegal interest rates by false claims by MSB and Globe,” he said. “I am glad that everyone concerned is finally getting a degree and a certain amount of justice.”
The news follows multiple lawsuits with two court cases, multiple appeals, and schools filing for bankruptcy. All Minnesota School for Business and Globe University locations in the state of Wisconsin and South Dakota were closed through 2017.
A Hennepin County district judge concluded in 2016 that schools committed consumer fraud by telling students they could pursue careers as police officers or probation officers by enrolling in criminal justice programs that range from 40,000 to 80,000 US dollars. The programs did not provide the education required to pursue these careers.
Ellison’s office also accused schools of violating Minnesota law by giving students loans at “predatory” rates. The courts agreed and declared the loans null and void and subject to full reimbursement.
Schools issued partial refunds totaling $ 3.7 million in 2018 before delaying further repayments as they file for bankruptcy.
Students who enrolled in schools’ criminal justice programs from 2009 to 2016 and applied for discharge will receive federal student loan forgiveness.
Eligible students are also reimbursed nearly the full cost of program participation and federal student loan payments. Students who have obtained illegal loans through schools with interest rates of up to 18% will also receive a refund.
Applicants will be notified of the loan by the US Department of Education.
The Attorney General’s Office is also seeking federal loan waivers for students who have attended another for-profit university, the ITT Technical Institute, which closed in 2016, according to its press release. He is also seeking expanded debt relief for students who took out loans to attend Argosy University, another for-profit school.
Resources for students enrolled in schools can be found at bit.ly/39WkofR. Consumers with questions can call 651-296-3353 or 1-800-657-3787.
Alex Chhith • 612-673-4759