Globe University, Minnesota School of Business Cut Off from Federal Funding

The U.S. Department of Education announced Tuesday that Minnesota-based Globe University (Globe) and Minnesota School of Business (MSB) will no longer be able to participate in the federal student aid program following findings of fraud and what officials call "callous acts of misrepresentation." The enforcement action is a part of the department’s efforts to protect students, safeguard taxpayer dollars and increase accountability among postsecondary institutions.

Authorities found that Globe and MSB are ineligible to participate in federal student aid programs because they committed fraud involving Title IV program funds, according to a news release.

Additionally, both institutions "knowingly misrepresented the nature of their criminal justice programs and the transferability of credits earned to other institutions," officials said Tuesday.

"These callous acts of misrepresentation left many students without the credentials necessary for their chosen careers and no options to continue their studies at other postsecondary institutions. Many graduates incurred thousands of dollars of debt but had limited options for successful job placement in their chosen fields."

Globe currently enrolls roughly 1,000 students at ten locations in Minnesota, Wisconsin, and South Dakota and received $28.4 million in federal student aid during the 2014-15 award year. MSB enrolls approximately 700 students at nine locations throughout Minnesota and received $25.5 million in federal student aid during the 2014-15 award year. Both schools have until Dec. 20, 2016, to submit evidence to dispute the Department’s findings.

"Globe and MSB preyed upon potential public servants – targeting those with a sincere desire to help their communities." said U.S. Under Secretary of Education Ted Mitchell in a statement.

"These institutions misrepresented their programs, potentially misleading students, and abused taxpayer funds, and so violated federal law, which is why we removed them from the federal student aid program. This is a sober reminder that not all institutions deliver on their advertised promises."

In letters sent Tuesday, the Enforcement Unit notified Globe and MSB that each school’s application for recertification to participate in the Title IV federal aid programs has been denied. Effective Dec. 31, 2016, students at both schools will no longer be able to use federal aid such as Pell Grants or Direct Loans to pursue their studies.

Earlier this year, following a lawsuit filed by Minnesota Attorney General Lori Swanson in 2014, a Minnesota court issued an order finding that Globe and MSB engaged in consumer fraud and deceptive trade practices by misrepresenting the job opportunities available to their criminal justice graduates. The investigation by the Program Compliance and Enforcement Units included review of the material presented at trial, the judicial determination arising from that trial, and information collected through various Departmental oversight and monitoring processes.

Over the last three fiscal years, the Department has denied recertification applications for more than 30 institutions, including Marinello Schools of Beauty, Computer Systems Institute, and Medtech College.

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