Charlotte Law School Closes with a Whimper

Charlotte School of Law’s nine-month fight to stay open has ended.

The for-profit law school, at one time the largest law school in North Carolina, is shutting down immediately, after failing to meet several requirements set forth by state regulators and battling a myriad of other problems.

Officials at the law school did not immediately respond to requests for comment on the school’s status Tuesday, but the president of Charlotte’s alumni association said in an email to fellow members that law dean Paul Meggett informed him Monday that the school will shutter. Students were to be informed of the decision Tuesday, according to Lee Robertson, Jr., who heads the alumni association. The school’s website has not been functional since Monday evening.

Charlotte’s enrollment stood at about 700 last fall, but had dwindled to about 100 by the spring, after many students transferred or took leaves of absence when the school lost it federal loan eligibility in January. Current students will have to transfer to other law schools, and with the fall semester about to start, it’s unlikely they will be able to do so this fall, Robertson said.

Charlotte marks the third American Bar Association-accredited law school to close, or announce closure plans, within a year.

Indiana Tech Law School shut down in May after just four years, having failed to attract enough students. Officials at Whittier University announced in April they are shutting down Whittier Law School as soon as current students graduate, citing falling enrollment and bar pass rates, as well as financial shortfalls.

The American Bar Association confirmed Tuesday afternoon that its Council of the Section of Legal Education and Admissions to the Bar on Friday declined to approve the Charlotte’s “teach-out plan,”—a plan to continue operating long enough to graduate current students.

“The teach-out plan assumed that the law school would continue to operate as a degree-granting institution,” reads a Monday letter from the council to Charlotte leaders informing them of the denial of its teach-out plan. “At the time of the council’s consideration, it was not clear whether that assumption as accurate.”

Securing an ABA-approved teach-out plan by August 10 was one nine conditions set forth by the University of North Carolina System’s Board of Governors in June, which issues licenses for higher education institutions in the state.

Additionally, the Board of Governors stipulated that in order to retain its license to operate in North Carolina, Charlotte could not admit any new students and must be reinstated to the federal student loan program by August 10. The school appears to have fallen short on the loan front as well. School officials requested an extension from the state to meet all its conditions, but were denied, according to a Tuesday letter from the University of North Carolina to Charlotte officials.

According to that letter, the school’s license to operate expired Friday after it failed to secure ABA approval for its teach-out plan, be fully reinstated to the federal loan program, and meet other financial requirements laid out by the state. The Board of Governor’s denied the school’s request to hold an emergency meeting to extend the school’s deadline to meet those conditions.

Charlotte’s closure is hardly a surprise. Its problems—including accreditation shortcomings, the loss of federal loan eligibility, lawsuits from students alleging fraud, and a consumer protection investigation launched by the state attorney general—have been mounting since November.

But administrators repeatedly insisted that they were working towards a resolution and up until last Friday maintained that they believed they would be secure the ABA’s blessing, regain federal loan eligibility, and planned to open as scheduled later this month.

Despite the many ominous signs, the end of the Charlotte’s 11-year run is still jarring for alumni, according to Robertson.

“Like you, I am deeply saddened and profoundly frustrated by this news,” Robertson wrote in his email to fellow members of the alumni association. “I was very hopeful that our law school would be able to regain the confidence of the ABA, the [Board of Governors], its students and its alumni. I was also very hopeful that the student who have been patiently waiting to resume their education at the Charlotte School of Law would have the opportunity to do so. It appears they will not.”

The law school’s problems began in November when the ABA placed it on probation for violating rules intended to ensure law schools don’t enroll students with little chance of graduating and passing the bar exam. The Education Department announced the following month that it was cutting off Charlotte’s federal loan access due to its accreditation shortcomings.

School officials spent the next nine months trying to restore its federal loan eligibility and seemed to be making process with the help of a team of lobbyists with ties to new Education Secretary Betsy DeVos. The Education Department agreed to disburse spring semester loans to students who had been approved for them at the start of the year, though that decision did not come until the final days of the semester. Charlotte officials said in late July that they were close to an agreement to restore federal loans for the fall, though an Education Department spokesman countered that negotiations were ongoing with the school.

Meanwhile, a contingent of current and former Charlotte students has filed fraud lawsuits against Charlotte and its parent company InfiLaw, Inc., alleging they should have been warned sooner that the school was on thin ice with the ABA.

North Carolina Attorney General Josh Stein is also investigating the school for potential violations of the state’s consumer protection laws.

 

Contact Karen Sloan at ksloan@alm.com. On Twitter: @KarenSloanNLJ