Globe Univ., Minnesota School of Business blocked from federal student loans

- The U.S. Department of Education has officially dropped the Minnesota School of Business and Globe University from the federal student loan program, effective Dec. 31, 2016. The  for-profit school are denied access to federal student loan funds because they were "judicially determined to have committed fraud involving Title IV program funds," and "knowingly misrepresented the nature of their criminal justice programs and the transferability of credits earned to other institutions."

In September, a district court ruling found Globe University and the Minnesota School of Business guilty of defrauding students. In 2014, the state claimed the schools misled students by aggressively selling an education in which a lot of the credits don't transfer and inflating job placement rates. In particular, the schools were accused of offering a criminal justice program that Minnesota police department’s don’t accept.

“Globe and MSB preyed upon potential public servants – targeting those with a sincere desire to help their communities.” said a statement from U.S. Under Secretary of Education Ted Mitchell. “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.”

Following the trial, MSB and Globe said their programs were in full compliance with state law and the criminal justice program is no longer in operation.

In letters sent Tuesday, the Department of Education notified Globe and MSB that each school’s application for recertification to participate in the Title IV federal aid programs has been denied. 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 their studies. The Department of Education posted the following “denial of recertification” notice on Tuesday:

After a thorough review of applications for recertification 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 recertification 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 letters notified MSB and Globe that, upon the effective date of Dec. 31, 2016, MSB’s and Globe’s participation in the federal student aid programs would end. The letters permit MSB and Globe until Dec. 20, 2016, to provide ED with factual evidence to dispute ED’s findings. If that evidence causes ED to change its determination, MSB’s and Globe’s applications to be recertified may be approved to allow the institutions to regain their ability to receive program funds.

We will post additional information for students to this site as the situation develops. Please check back for updates.

*Minnesota v. Minnesota School of Business, Inc. d/b/a Minnesota School of Business and Globe University, Inc. d/b/a Globe University, No. 27-CV-14-12558, Fourth Judicial District of Minnesota (2016)
 

Read the letter to MSB at https://studentaid.ed.gov/sa/sites/default/files/msb-recert-denial.pdf

Read the letter to Globe at https://studentaid.ed.gov/sa/sites/default/files/globe-recert-denial.pdf

Globe University currently enrolls about 1,000 students at 10 locations in Minnesota, Wisconsin, and South Dakota. The school received $28.4 million in federal student aid during the 2014-15 year. Minnesota School of Business enrolls about 700 students at 9 locations in Minnesota and received $25.5 million in federal student aid during the 2014-15 year. Both schools have until Dec. 20 to dispute the Department of Education's findings.

Updates for Globe and MSB students will be posted at https://studentaid.ed.gov/sa/about/announcements/msb-globe

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