Students attending for-profit schools say they've become collateral damage
INVER GROVE HEIGHTS, Minn. — Aimee Edwards feared her dream of becoming a nurse was slipping through her fingers.
The Inver Grove Heights wife and grandmother thought she had done everything right. She worked hard, saved her money, enrolled in training for her dream job and excelled in her classes.
But in December, about six months before she was set to graduate, Edwards learned the Minnesota School of Business campus in Richfield, where she was studying to earn a bachelor's degree in nursing, would soon close.
"The closing of our school means we could lose everything," said Edwards, who also serves as a student advocate and voice for her two dozen classmates. "We are out of money. We are out of time. My life savings has gone to this school."
Edwards is one of hundreds of students from the Minnesota School of Business and Globe University who spent the holidays trying to determine where they would continue their studies as the chain of for-profit schools prepared to close campuses after a September fraud ruling.
The Hennepin County District Court ruling that the schools defrauded students in their criminal justice program set off a flurry of consequences that led to the institutions being barred from participating in federal financial aid programs, a key revenue stream.
The sudden turn of events didn't just make Edwards afraid for her future — it made her mad. She thinks the sudden shuttering of the schools is inconsiderate to the students still enrolled.
"I'm very upset. At the school and at the state," Edwards said. "We were always told by the school this wouldn't affect us. I understand there has to be consequences for what happened to the criminal justice students. Why is it OK to ruin hundreds of other students' education? How does that make it right?"
A legal finding of fraud essentially amounts to a death sentence for a college or university, state officials said. To protect students and taxpayers, state and federal laws require that schools found to have defrauded students lose their ability to grant degrees and access to government-backed loans and grants.
For many of the roughly 1,200 students attending Globe and Minnesota School of Business campuses, other institutions stepped up to provide them a place finish their degrees. Other students were able to graduate before the schools started to shut down.
Edwards and her fellow nursing students were among the most difficult to place. Initial plans for them to move to Concordia University in St. Paul have been delayed while oversight agencies vet Concordia's plans to take over the nursing program.
Edwards feared she would have to wait to finish her degree or enroll somewhere else and lose many of the credits she had already earned. Then on Wednesday she learned Rasmussen College would let her and her classmates complete their degrees on time with no extra classes.
"I'm so happy. I feel like it is a miracle," Edwards said.
Minnesota Attorney General Lori Swanson said she brought legal action against Globe and the Minnesota School of Business after hundreds of criminal justice students complained they were deceived. Students say they were led to believe completing the criminal justice program would put them on a path to becoming police and probation officers, but they eventually learned the schools' training was not accepted by the Minnesota agencies that certify workers for those positions.
Student Kristina Anderson of Stacy, Minn., says she was duped. Anderson spent about $80,000 on a criminal justice degree, but since she graduated in 2013 she's been unable to find a good-paying job in the field and struggles to repay her student loans.
Anderson testified against the schools during the fraud trial that stretched over the summer of 2016. A judge recently ordered the school to pay restitution to criminal justice students, but Anderson said she isn't confident she'll ever see a substantial repayment of what she spent.
Anderson added that she's glad the schools are facing consequences for lying, but she's upset by the collateral damage done to other students.
"The worst part is, I loved that school," Anderson said. "It was small and structured and all the teachers were experienced in what they were teaching. I liked that school a lot, and that's what makes me so mad."
Leaders of Globe University and the Minnesota School of Business maintain that school employees never intentionally deceived anyone. They say some students may have received the wrong impression about the program by mistake, but the mix-up only happened because the institutions offer criminal justice degrees in multiple states and only Minnesota doesn't accept the degree as a prerequisite for police and probation officer credentialing.
"We are very sorry for the students who felt they were misled, but we did not intentionally mislead anyone," said Jeff Myhre, the schools' CEO, who characterized the state's refusal to accept the schools' criminal justice degrees as "unfair discrimination" against the institutions.
Myhre added that school leaders had hoped to settle the case and avoid the virtual death sentence of a fraud ruling, but Swanson wouldn't accept terms the schools could live with.
"They didn't want to settle. They wanted to put us out of business," Myhre said.
Swanson rejects these arguments, characterizing them as either disingenuous or untrue. She says the schools faced a string of lawsuits from unhappy students and former employees before the state filed its case in 2014.
Many of those previous cases floundered because the institutions make students sign onerous arbitration agreements when they enroll to keep grievances out of court, Swanson said.
"The school(s) had lots of opportunities to clean up (their) act over the years and failed to do so," Swanson said.
She added that her office received hundreds of complaints from students who were saddled with up to $80,000 in debt for degrees that wouldn't get them any closer to their career goals.
"We get complaints from students and we enforce the law," Swanson said, noting that her goal was to help students whose lives were "irreparably altered" by attending the schools. "You're talking about people's futures. You're talking about people's' lives and livelihoods."
Feds step in
Swanson believes her case is the first brought by a state agency against a for-profit college or university to result in a legal finding of fraud. The Minnesota ruling may be unique, but the underlying complaints demonstrate why for-profit colleges have been increasingly scrutinized in recent years.
Fueled by money from Wall Street and demand from unemployed workers and veterans looking to quickly retrain for an evolving job market, for-profit colleges grew rapidly in the past decade. Students often paid much higher tuition than they would have at similar public institutions, hoping that the flexible programs for working adults would lead to good-paying jobs.
Unfortunately, many students' dreams didn't pan out. They left school awash in debt with degrees that didn't lead to the lucrative careers they say they were promised.
In response, the Obama administration through the U.S. Department of Education developed a series of new regulations to rein in the industry. The so-called "gainful employment" rule was designed to protect students from schools that overpromised the value of degrees.
In essence, schools now have to show their training will lead to jobs that pay enough that students will be able to afford the loans needed to earn their degrees.
"When a student makes a personal and financial decision to attend college, the student must feel confident that it is a sound investment in his or her future, not a liability that will further defer his or her dreams," said U.S. Secretary of Education John B. King Jr. in a recent statement announcing his agency's final "gainful employment" requirements.
The regulations may be in jeopardy. Republicans, who hold majorities in the U.S. House and Senate, have not been big fans of the rules, often describing them as excessive regulations.
Incoming President Donald Trump once ran a for-profit university that was sued multiple times for alleged fraud. Days after winning the election, Trump agreed to pay $25 million to settle the lawsuits without acknowledging fault or liability.
Myhre, the schools' CEO, argues what happened to his schools is a perfect example of overzealous scrutiny of an industry with a long history of helping students. Myhre noted that his schools trace their roots to the late 19th century and although appeals of legal and regulatory decisions are still possible, the fallout from the fraud ruling may have damaged the schools beyond repair.
"We appreciate being part of higher education in this state," Myhre said. "We think we did a good job and the majority of students were satisfied with their education."
Swanson hopes the increased federal oversight of for-profit schools will remain in place. She also hopes the outcome of the Globe and Minnesota School of Business case will act as a deterrent for other potential bad actors.
"I think it is important for it to continue because students' lives are in the balance and it is in the interest of taxpayers," Swanson said.
Pioneer Press: Jean Pieri
"We're like family — the students and the staff. I miss the learning and the camaraderie," said Aimee Edwards a former nursing student from the Minnesota School of Business which has closed. Edwards is photographed in the critical care lab that she took many classes in at Minnesota School of Business.