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U.S. Department of Education Takes Action Against Five Schools for Disbursing Federal Student Aid to Students Enrolled in Unaccredited Programs

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Today, the U.S. Department of Education (Department) announced settlement agreements with five law schools after a Federal Student Aid (FSA) investigation revealed that the schools improperly disbursed Title IVfunds to students enrolled in unaccredited Master of Laws (LL.M.) programs.

The five schools that settled these claims are Albany Law School, Atlanta’s John Marshall School of Law, Brooklyn Law School, New England Law–Boston, and New York Law School. Nearly $2.9 million in ineligible disbursements were made to 92 students across the five schools between July 2017 and June 2022. 

“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.”

Generally, institutions must be accredited or, in the case of public or non-profit institutions, pre-accredited by a nationally recognized accrediting agency to participate in Title IV programs. Each school is responsible for ensuring Title IV funds are only disbursed to students enrolled in eligible programs within the scope of the Department’s recognition of the school’s institutional accrediting agency. Accreditation is a critical part of the federal student aid program’s regulatory framework, and accrediting agencies serve as reliable authorities regarding the quality of education or training offered by the institutions or programs they accredit.

Unlike most law schools in the United States, the schools included in the settlements are not part of a broader university system that offers other non-legal education programs and has institutional accreditation. Such schools are sometimes referred to as “freestanding law schools.” The American Bar Association (ABA) typically functions as a programmatic accreditor for schools with Juris Doctor (J.D.) programs that otherwise have institutional accreditation; however, the ABA does not accredit LL.M. programs. For freestanding law schools, the ABA is recognized as an institutional accreditor by the Department and, therefore, approved as a gatekeeper for Title IVfunds for J.D. programs only. As a result, freestanding law schools institutionally accredited by the ABA that offer non-J.D. programs, such as LL.M. programs, must also secure institutional accreditation that has within its recognized scope all the programs the school offers for Title IV aid. FSA’s investigation determined that the five law schools failed to secure the necessary accreditation to disburse aid for their LL.M. programs.

Under the settlements, the schools will:

  • Reimburse the expected loss to the Department from the improperly disbursed funds;
  • Stop disbursing federal student aid funds to students in ineligible programs; and
  • Agree not to seek reimbursement or to recoup the amounts paid as a settlement from any students or former students.

Under the settlements, the three schools that disbursed Title IV funds within the last five years must pay a fine.

The agreements do not constitute an admission of wrongdoing or liability by the schools.
These are not the first instances of an ABA-accredited law school coming under Department scrutiny for disbursing Title IVfunds to students enrolled in an unaccredited LL.M. program. In October 2021, another freestanding law school notified the Department of its own violation. The Department opened a program review and assessed liabilities against the school for improper disbursements. In that case, however, the Department determined not to impose a fine on that school in recognition of the school’s responsible conduct in self-identifying and self-reporting this violation.

Schools are responsible for ensuring they have institutional accreditation recognized by the Department, including any program for which they intend to disburse Title IV funds. The Department will continue to hold schools accountable if they fail to fulfill this responsibility.

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