The Charlotte School of Law has until early August to prove its financial stability or face revocation of its license to operate in North Carolina.
A committee of the UNC Board of Governors, acting on behalf of the full board, voted Wednesday to severely restrict the school’s activities as it seeks to survive long enough to graduate its remaining 100 students.
The action Wednesday gives the for-profit school a limited amount of time to prove that it’s stable. The conditions must be met or Charlotte School of Law’s license would automatically be revoked, and it would cease operations in the state.
The law school, already on probation by the American Bar Association, cannot admit new students and must present evidence to UNC by Aug. 1 that it is in compliance with state licensure standards. It must have a sufficient tuition guaranty bond, which would refund students’ prepaid tuition if the school went out of business. And by Aug. 10, the school must obtain permission from the ABA to “teach out” its remaining students and a decision by the U.S. Department of Education to allow the students access to financial aid.
The school’s president, Chidi Ogene, who was present at the committee’s meeting in Chapel Hill on Wednesday, declined to comment.
The school’s officials have told UNC’s General Administration that it has a remedial plan to continue operations and restructure its debt. They are seeking re-certification from the Department of Education so that the school’s students can participate in the federal loan program. The school has 11 first-year students, 55 second-year students and 34 third-year students. In addition, 73 students have taken a leave of absence, meaning they are no longer enrolled but haven’t officially withdrawn.
The school has indicated that many of its remaining 100 active students want to finish their education at the school because they don’t have other options in the area.
But the school has several hurdles, including an ongoing investigation by the state Department of Justice’s Consumer Protection Division.
UNC General Administration, which oversees licensure for all nonpublic institutions of higher education in the state, began a review of the school’s license in January. The review team included a retired UNC associate vice president, a former administrator at the University of Georgia’s law school and an official with a Charlotte financial consulting firm.
The review found that the school was out of compliance with four financial standards. The reviewers also noted concerns that the school could remain in compliance with a major standard relating to the quality of the school’s program of study.
UNC President Margaret Spellings said her staff’s recommendation to the board represented a balance, giving the school a short timeline of less than two months for it to prove that it can serve its final students.
“When an academic program is phased out, we generally also want to make sure that the students in the program have the opportunity to complete the program, or at the very least to transition to another one,” Spellings said. “This is what we do anytime we phase out a program or a school within the UNC system.”
The vote on Spellngs’ recommendation was unanimous, but several UNC board members expressed concern about the school’s continued operation.
Board member Joe Knott wondered if the action served the Charlotte School of Law’s best interests. “I’m wondering, from all that I’ve heard about this school, is allowing the students to remain in such a school actually doing them any favors?” Knott asked. “Would it not be better for them to stop this endeavor and find an educational opportunity at a better school?”
The Charlotte School of Law was the first for-profit law school in North Carolina. It was first licensed in 2005, opened in 2006 and enrolled as many as 1,400 students. Its bar passage rates were low compared to other North Carolina law schools. The ABA put the school on a two-year probation on Nov. 14, 2016. A month later the U.S. Department of Education notified the school that it was shutting off students’ access to the federal loan program.