ST. PAUL, Minn. – High-interest loans issued to students at the defunct and bankrupt Globe University and the Minnesota School of Business will be cancelled, Attorney General Keith Ellison announced. The cancellation is part of a court-approved settlement of $42 million to benefit 942 former students, Ellison said. The two schools, part of the same operation, had eight locations in Minnesota, including rented office space called a “campus” in northwest Rochester. The breakdown of the settlement:
> $23 million to erase federal student loans.
> $15.6 million to criminal justice students who were the focus of consumer fraud actions.
> $3.7 million that was returned to the students in 2018 before the schools filed for bankruptcy.
Approval of the settlement is expected from the U.S. Department of Education and the bankruptcy court.
Verbatim
Keith Ellison, state attorney general: “This agreement should finally resolve one of the biggest consumer-fraud cases ever brought by the Attorney General’s Office, and one of the only cases against a for-profit college ever brought to trial in America. While no dollar amount can make up for all the pain and loss that these students and their families experienced, I hope the relief my office has worked so hard to win will allow them to start affording their lives again after this terrible experience.”
Long trail of wrongdoing.
The disintegration of the Globe/MSB empire began in 2011 when Heidi Weber, a dean, filed a whistleblower-wrongful termination lawsuit. She was awarded $395,000 plus $995,000 for legal expenses for three years of litigation. The Weber case generated evidence of fraud and bogus claims to recruit students that Attorney General Lori Swanson used to shut down the whole operation.