Charlotte Law receives access to federal student loans as state license is threatened

As students return to the embattled Charlotte School of Law on Aug. 28, where only 100 of its previously enrolled 750 students remain, the future of their legal education remains uncertain.

The law school has been under fire since the American Bar Association placed it on probation in October. In December, the U.S. Department of Education announced that Charlotte Law would lose federal financial aid after finding that the law school made substantial misrepresentations to students about its compliance with ABA accreditation standards. 

Most observers felt this was a death sentence, as most law students need financial aid to afford law school. Initially, the ABA required Charlotte Law to create a teach-out plan to prepare for closure. The plan ensures students are treated fairly while a school winds down operations.

But Charlotte Law has managed to maintain federal funding and remain open, causing the ABA to defer the teach-out plan. For students enrolled for the full academic year, a second disbursement of federal funds was released in May.

That didn’t end the school’s troubles. This summer, the North Carolina Board of Governors, which handles state authorization, concluded that Charlotte Law is not in compliance with state standards regarding financial resources, planning or stability. As a condition to its state license, it required Charlotte Law to submit an ABA-approved plan to improve the school’s performance no later than Aug. 10.

The UNC Board of Governors is not so sure the law school’s plan will pass.

Margaret Spellings, the president of the University of North Carolina System, questioned whether the school was financially healthy enough to move forward and whether it could even implement the plan quickly enough. In a memo, she wrote that the Board was “not optimistic” that Charlotte Law would be able to comply. 

Charlotte Law has a different take. It saw the decision as “largely positive.”

“While the Board found that CSL was not in compliance with certain financial requirements contained in the Standards, it also continued our license in force and allowed additional time for the school to take measures to strengthen its financial position,” the law school stated in a press release.

Since the hearing, Charlotte Law received news from the Department of Education on July 27 that the law school’s ability to administer federal students loans for the fall semester.

 “We are excited at the prospect of being able to help our students complete their education,” Charlotte Law Dean Paul Megget said. “In the meantime, [Charlotte Law] continues to work closely with the American Bar Association and the UNC Board of Governors to resolve all remaining compliance-related matters.”

The coninued access to federal student loans will come with some conditions, the details of which are still under discussion, according to a Charlotte Law press release