Aug 28 (Reuters) – Five law schools have reached a $2.9 million settlement with the U.S. Department of Education over claims that they improperly gave federal student loans to students enrolled in advanced law degree programs.
The Education Department on Thursday announced settlements with Albany Law School, Atlanta’s John Marshall Law School, Brooklyn Law School, New England Law–Boston, and New York Law School, saying they made ineligible student loan disbursements to a combined 92 students in their Master of Laws (LL.M.)programs between 2017 and 2022. The law schools are so-called stand-alone institutions not affiliated with larger universities.
In addition to returning the loans, three of the five schools have also paid fines. Brooklyn Law School was fined $120,000; New York Law School was fined $100,000; and New England Law—Boston was fined $25,000, according to an Education Department spokesperson.
The Education Department requires that federal student loans are distributed to students in programs recognized by their designated accrediting agency, which for law schools is the American Bar Association. The ABA accredits law schools’ juris doctor programs but not their LL.M. programs.
Because the targeted stand-alone schools are not part of larger universities that have accreditation beyond the ABA, they must secure additional accreditation to offer federal loans to students in their LL.M. programs—something they failed to do, according to the Education Department.
In addition to reimbursing the Education Department in the amount of the improper loans, the settlement calls for schools to stop disbursing federal loans to students in ineligible programs and not to seek reimbursements from any students or former students. The settlement does not constitute an admission of wrongdoing by the schools, the Education Department said.
New York Law School; Brooklyn Law School; and New England Law—Boston, either declined to comment or did not immediately respond to requests for comment on Monday.
Jace Gatewood, dean of Atlanta’s John Marshall School of Law, said his school inadvertently distributed federal loan money to one student in its LL.M. program in 2017 and has repaid $1,378 to the Education Department.
“This was an incident involving only one student, and no students or former students of [the law school] will bear any financial burden because of this settlement,” Gatewood said in a statement.
Albany Law School said an investigation into 2,200 loan disbursements uncovered one error and that the school’s settlement amount was less than $7,000.
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