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Two For-Profits Issued Illegal Loans

July 27, 2017
 
 

Minnesota's Supreme Court ruled this week that Globe University and the Minnesota School of Business issued illegal loans to students, that carried interest rates of up to 18 percent and were not properly licensed, the Pioneer Press reported.

The U.S. Department of Education froze federal aid payments to the two related for-profit institutions last year, after a Minnesota District Court ruled that they had operated fraudulent criminal justice programs. Most of the two institutions' campus locations subsequently closed, although some have continued to operate in Wisconsin under a different ownership structure.

Minnesota's attorney general, Lori Swanson, said she would seek for loans of 6,000 former students to be discharged as well as refunds for previously repaid loans. A judge in the state also has ruled that the two for-profits must pay restitution to defrauded students.

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