Federal Student Aid discovered five law schools that improperly disbursed $2.9 million of ineligible federal financial aid funds to 92 students between 2017 and 2022. The Department of Education has subsequently fined three of the institutions and has requested from all five reimbursements for the allotted funds.
Albany Law School, Atlanta’s John Marshall School of Law, Brooklyn Law School, New England Law–Boston, and New York Law School are considered freestanding law schools, meaning they are not part of a broader university system with institutional accreditation. Thus, their only route to accreditation rests with the American Bar Association.
However, the ABA only accredits Juris Doctor (J.D.) programs, and FSA found these five law schools disbursing Title IV funds for their LL.M programs as well. Without proper institutional accreditation, the freestanding law schools were never eligible to disburse such financial aid to students enrolled in the LL.M programs in the first place.
“Today’s actions demonstrate our commitment to protect the integrity of the federal student aid programs,” said FSA Chief Operating Officer Richard Cordray. “Through our ongoing work, we will continue to protect both students and taxpayers.”
Aside from being requested by the FSA to reimburse the funds, the institutions must also stop disbursing federal student aid to ineligible programs and agree not to recoup their losses from current and former students.
The three schools that have been disbursing the ineligible federal aid within the last five years must also pay said fine.
While the U.S. Department of Education has reached a settlement agreement with these schools, it does not constitute an admission of wrongdoing or liability by the schools, according to the statement.
Was the federal aid disbursed knowingly or with ignorance?
It’s hard to deduce whether any of the colleges deliberately misconstrued their accreditation or if the schools did not properly understand which students were eligible for aid in the first place.
Several schools broadly generalize their level of accreditation. For example, John Marshal Law School, the only for-profit school among the five, states on its website that it remains “approved to participate in all Federal Student Financial Aid Programs.” Moreover, New England Law-Boston simply states the ABA accredits them. On the other hand, New York Law School states its J.D. program is fully approved by the ABA, but it omits any mention of non-J.D. programs.
Other law schools that recently ran into the law
This isn’t the first time the Department has pursued stripping a school’s ability to offer financial aid. In the Department’s announcement, it mentioned another freestanding law school in October 2021 that improperly disbursed financial assistance to its unaccredited LL.M program. But because the school brought it to the Department’s attention, they did not wage a find.
The Florida Coastal School of Law lost its federal financial aid earlier that year. Richard Cordray, chief of the department’s office of Federal Student Aid, said in a news release it was stripped due to the school operating “recklessly and irresponsibly, putting its students at financial risk rather than providing the opportunities they were seeking.” However, it alleged the Department acted arbitrarily and capriciously, according to ABA Journal.