The Minnesota Supreme Court issued a ruling Wednesday, July 26th, 2017, that reversed a court of appeals ruling in concluding that Minnesota School of Business and Globe University violated state law by issuing private institutional student loans without the proper licensure and by charging usurious interest rates that exceeded 8%.
The case will go now back to Hennepin County District Court to determine the impact for students with these loans, including whether students are eligible for a discharge of these loans and a refund of any payments previously made to these loans. This ruling does not apply to federal student loans or other private loans through banks, credit unions, or other lenders.
Our office will continue to provide updates and relevant information for those student affected by the ruling as that information becomes available.
Students with questions or concerns can contact:
Institutional Monitoring Specialist
School Licensure and Registration
Minnesota Office of Higher Education
On Thursday, September 8, 2016, a Hennepin County judge found Globe University and the Minnesota School of Business to have violated the Consumer Fraud Act and the Deceptive Trade Practices Act in the recruitment of students for their Criminal Justice programs. The judged order the school to stop using fraudulent recruiting practices. The next stage of the trial will determine restitution for impacted schools students and other injunctive relief.
Globe University and the Minnesota School of Business are regulated under the Private and Out-of-State Public Postsecondary Education Act. This Act mandates that the Office of Higher Education (OHE) not authorize any institution that has been adjudicated for fraud or misrepresentation, as outlined in Minn. Stat.§136A.685. OHE has begun taking steps to revoke Globe University and the Minnesota School of Businesss authorization to operate in Minnesota. We anticipate the institutions to be able to operate for approximately one year to teach-out currently enrolled students. It is not known at this time if there are other federal or state entities that will impact that timeline.
OHE is working on options for current students to either continue their education at Globe University and the Minnesota School of Business or at other Minnesota institutions. We are in the process of developing articulation agreements and transfer pathways with institutions across the state, which would make it easier for Globe University and Minnesota School of Business students to transfer and complete.
As Globe University and the Minnesota School of Business are still operating, students can still obtain a copy of their educational records from the institutions. Our office is working with Globe University and Minnesota School of Business to obtain educational records for current and former students. We will continue to post more information as it becomes available.
ITT Technical Institute closed its doors Tuesday September 6, 2016. The office of Federal Student Aid at the US Department of Education has posted additional information on how former ITT students can continue education, apply for federal loan discharges, and retrieve records. There are informative webinars available for ITT Technical Institute Students. If you are a former student of ITT Technical Institute, more information is available here.
Our office is working with ITT Technical Institute to obtain student records and we are working with institutions to create articulation agreements for students to continue their education at other Minnesota institutions. Our office will post more information as information is obtained.
Earlier this year, the US Department of Education notified ITT of its financial responsibility failure and its intent to require the corporation to post an irrevocable Letter of Credit in the amount of $79,707,879 and Provisional Participation Agreement for Title IV financial aid programs. In April 2016 ITT was put on a Show-Cause Directive by its accreditor, the Accrediting Council for Independent Colleges and Schools (ACICS). In June 2016, the US Department of Education required ITT Educational Services, Inc. to increase that irrevocable Letter of Credit to $123,646,182 to be paid in three installments. Earlier this month the US Department of Education was notified by ACICS that the Show-Cause Directive would be continued and that ITT was unlikely to come into compliance with its accreditor's standards. As a direct result of these concerns, on August 25, 2015 the US Department of Education issued another letter to ITT Educational Services, Inc. citing the institution on the previously stated concerns, and imposing the following conditions on ITT's continued participating in Title IV, HEA programs:
For new students interested in enrolling at ITT Institute's Minnesota campuses, as a direct result of the conditions on ITT's Provisional Participation Agreement, you will not qualify for Title IV financial aid programs.
The National Advisory Committee on Institutional Quality and Integrity (NACIQI) has voted to de-recognize The Accrediting Council for Independent Colleges and Schools (ACICS). Without U.S. Department of Education recognition, ACICS accredited institutions would no longer be able to offer Title IV financial aid to students until new accreditation is gained through a different Department recognized accrediting body. The U.S. Department of Education will make the final decision within the next 60 days, and if recognition is withdrawn, institutions with ACICS accreditation will be given 18 months to secure new accreditation. Additionally, state authorization is an issue for institutions in many states where state authorization requires accreditation by a Department recognized accreditor. According to Inside Higher Ed, this decision affects 245 colleges and 800,000 students nationally. In Minnesota, institutions are required to be accredited by a U.S. Department of Education recognized accreditor. Statewide, this affects 11 institutions, several with multiple locations, three of which are already in the process of teaching-out currently enrolled students.
ACICS Accredited Institutions in Minnesota
In an announcement made June 10, 2016, Art Institutes International Minnesota has made the decision to teach out currently enrolled students and no longer accept new applicants. The institution has stated that the decision will not affect currently enrolled students, who will be given the opportunity to pursue their programs through graduation. This decision comes after the institution's accreditor gave a show-cause notice requiring the institution's parent company to prove why it should not lose accreditation based on questions surrounding the corporation's financial stability score.
Under pressure from political leaders and consumer advocates, Apollo Education Group, the parent company of University of Phoenix and Western International University, has decided to stop using mandatory arbitration clauses in enrollment agreements.
This decision comes before lawmakers have made a decision on banning arbitration clauses in enrollment agreements at colleges and universities that receive Title IV funding. Administrative rules are being negotiated this week by the Education Department, which, if adopted, will ban arbitration clauses and make it easier for students to file lawsuits against institutions.
The rule is being proposed as a means to hold institutions more accountable, and to offer students the rights and advantages of a normal court proceeding. The proposed rules also aim to help regulators identify the illegal behavior of institutions that receive Title IV funding, when under current law these settlements may be occurring covertly.
As of May 3, 2016 ITT Technical Institute in Eden Prairie Minnesota has suspended new student enrollments. The institution plans to conduct a financial risk assessment of the school's campus over the next 12-18 months. Following the assessment, campus officials will make a final decision on future enrollments. The institution has stated that this decision does not affect currents students at ITT, who will be allowed to pursue their programs through graduation.
Art Institutes International Minnesota is a part of Education Management Corporation. Art Institutes International Minnesota's accreditor, the Accrediting Council for Independent Colleges and Schools (ACICS), is requiring Education Management Corporation to prove why it should not lose its accreditation based on questions surrounding the Corporation's financial sustainability. As a part of the show-cause directive, Education Management Corporation is required to file a financial improvement plan and submit quarterly financial reports with ACICS, in addition to supplying other requested information.
ITT Technical Institute's accreditor, Accrediting Council for Independent Colleges and Schools (ACICS), is requiring ITT to prove why it should not lose its accreditation. ITT has been questioned regarding its administrative capability, organizational integrity and financial responsibility score, among other factors. ACICS cited in its 'Show-Cause' order that ITT Technical Institute was placed on the U.S. Department of Education's heightened cash monitoring, and is being investigated by the Consumer Financial Protection Bureau, the Securities Exchange Commission, and a number of state attorneys general. Two state attorneys general have initiated lawsuits against the institution.
A decision will be made this summer regarding the Accrediting Council for Independent Colleges and School's (ACICS) recognition by the federal government. The US Department of Education will have to decide whether ACICS should continue to be recognized by the federal government as an approved accreditor. Institutions are required to be accredited by a recognized accreditor of the federal government in order to participate in Federal Student Aid programs.
Everest Institute, a part of Corinthian Colleges, was accredited by ACICS and has closed its campus in Minnesota. Le Cordon Bleu College of Culinary Arts and Brown College, two colleges that are accredited by ACICS in Minnesota, are in teach-out mode.
Globe University and Minnesota School of Business are currently on trial for accusations filed by Attorney General Lori Swanson in 2014 that the institutions were making fraudulent misrepresentations during the enrollment process. Globe University and Minnesota School of Business are accredited by ACICS.
The following schools are also accredited by ACICS and are still operating in Minnesota: Academy College, Duluth Business University, ITT Technical Institute, Minneapolis Business College, Minneapolis Media Institute, Art Institutes International Minnesota.
A lawsuit was filed by the Minnesota Attorney General, Lori Swanson, in 2014 against Globe University and Minnesota School of Business. Allegations include misrepresentations of job placement statistics, false statements of credit transferability and high-pressure recruitment practices.
The Attorney General's desired outcomes include having the Judge force the schools to cease high-pressure sales tactics, compensate students who were misled and create a streamlined complaint system for students.
The trial will close this week, and closing arguments from the Minnesota Attorney General and representatives for Globe University and Minnesota School of Business will be due 30 days following the close of the trial.
The Minnesota Office of Higher Education does not register an institution if there has been a criminal, civil, or administrative adjudication of fraud or misrepresentation against the school, its owners, officers, agents, or sponsoring organization under Minn. Stat. 136A.685.
You may qualify for debt relief as a part of the US Department of Education's commitment to help students affected by Corinthian Colleges' school closures and fraudulent behavior of the Corinthian school you attended.
If you were enrolled in one of the Everest or WyoTech programs listed below, which were licensed programs in the State of Minnesota during the timeframes specified, and want to apply for a discharge based on defense to repayment, you must do the following:
Everest Eagan: (With first date of enrollment 7/1/2010-9/30/2014)
WyoTech Blairsville: (With first date of enrollment 7/1/2010-9/30/2014 unless otherwise noted)
WyoTech Laramie: (With first date of enrollment 7/1/2010-9/30/2014 unless otherwise noted)
If the college you are attending closes, or if you were a student there within 120 days of its closing, you may be eligible to have your student loans discharged. Learn more.
The Federal Trade Commission (FTC) announced on January 27, 2016 their intent to challenge how DeVry University calculates employment statistics and represents those statistics in its advertising and marketing. Additionally, the US Department of Education has taken administrative action related to DeVry University's records from 1975-1983. A hearing has been requested by the University on the Department's decision, and the University intends to collaborate with the Department to demonstrate its compliance and resolve the matter. A DeVry University representative has agreed to update the Office of Higher Education on the date and outcome of the hearing. Additionally, the University has agreed to supply the Office with copies of any advertising ruled as unusable by the Department and explain how advertising statements were calculated, where the data came from, and why the University maintains their defense. DeVry University is not currently under any prohibition by the Department regarding any advertisements. The Office will update the public once the hearing has taken place and information has been received from the University. There is currently no decision on the impact on borrower's defense to repayment.
In early February, officials approved more than 1,300 borrower defense claims totaling $28 million, along with almost $86 million in "closed school" discharges for students who attended Corinthian campuses. Because Corinthian filed bankruptcy, the government will not be recovering any of those funds. So far, only borrowers who attended an institution investigated by the Attorneys general of California have been offered blanket relief.
Cosmetology Training Center purchased by NOVA Academy of Cosmetology. The sale went through on December 1, 2015. Active CTC student were allowed to continue enrollment under the original contract terms as students of NOVA Academy of Cosmetology.
DeVry University closed its Edina, MN campus on December 31, 2015. Active student were allowed to continue enrollment through DeVry University's online modality. Continuing student were offered the greater of a 20% reduction in tuition pricing or the issuance of an institutional grant equal to the loss of Minnesota State Grant.