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Florida Coastal School of Law disputes reasons it lost its federal student aid

“I was devastated, but not shocked, really," second-year FCSL student Morgan Osborn said.

JACKSONVILLE, Fla. — After the federal government has cut off student aid at Jacksonville’s Florida Coastal School of Law (FCSL), the school responded disputing the claim that it hadn’t met standards for financial responsibility.

The U.S. Education Department said Thursday it had rejected the school’s request to reinstate a contract for participation in federal student aid programs that expired March 31.  

“Florida Coastal School of Law operated recklessly and irresponsibly, putting its students at financial risk rather than providing the opportunities they were seeking,” Richard Cordray, the department’s new chief of federal student aid, said in a news release about the decision.

This is not exactly what second-year student Morgan Osborn thought her law school experience would be like.

“I expected it to be hard, but then dealing with all of these unexpected issues outside of just regular school has brought on a lot of extra stress," Osborn said.

There were also some issues with accreditation and Florida Coastal students getting their loans during her first year.

“I was devastated, but not shocked, really," Osborn described. "It impacts everyone's future in a very negative way, especially the people who've already been through one or two years. So, we're still kind of waiting on answers and options of what we can do.”

Osborn hopes the situation gets resolved.

Florida Coastal School of Law President and Dean Peter Goplerud sent First Coast News the following statement Friday afternoon:

Yesterday we learned the Department of Education denied our application for reinstatement to the Title IV Student Loan program. We have been reviewing the letter with counsel and have 10 days to appeal the DOE decision. We are currently working to put together that appeal. We submitted a teach-out plan to the ABA last week and have been in contact with them concerning this denial. We have spoken with students, faculty and staff about the situation. Our students are our number one priority in this process and we are doing all we can to ensure they receive the education they need to continue on their path to becoming attorneys.

The school also sent out the following press release Friday night:

Florida Coast School of Law (FCSL) is disputing the findings released yesterday by the office of Federal Student Aid (FSA) in the U.S. Department of Education (ED) in a letter and press release denying the school’s reinstatement into the Title IV program. FCSL believes the ED was in error in its decision not to reinstate the school to the federal aid program and will be appealing the decision. The school will present evidence that shows it is in good standing and has been focused on the well-being of its students.

“I was perplexed by the ED’s decisions and disagree on many points they made in the letter and press release,” said Peter Goplerud, president and dean of FCSL. “In quotes released by the ED, they called us reckless and irresponsible with the students’ futures which could not be further from the truth. Our students are the sole focus of everything we are doing and always have been. We are putting together the factual evidence of the successes of our graduates and will be going point by point to refute the ED’s claims.”

The ED claimed the law school failed to meet financial responsibility standards and the fiduciary standard of conduct citing audits. FCSL believes they misread and mischaracterized critical parts of the audited financial statements. The school improved its financials between 2019 and 2020 and is on track to improve its financial position in the fiscal year 2021 as noted in the statements. The audits for the fiscal year 2019 and 2020 stated the school’s plans would provide an improved financial position for the future, which it did between 2019 and 2020. The audit also states its plan will provide “an improved financial position in future reporting periods and allow the Company to settle its liabilities and commitments in the normal course of business.”

The ED asserted that FCSL officials refused to sign a program participation agreement which is also not the case. The ED was asking a senior investor to sign the agreement which it never had before and the investor could not without violating the terms of the agreement with its investors. In the original denial in March, the ED failed to give a reason for the requirement and for its belief that the investor’s legal arguments were insufficient. The department also said the law school failed to inform them of accreditation issues which the school refutes. The ABA includes the ED in all communications related to accreditation for any accredited law school.

“There have been instances over the years where compliance issues have been raised, but we have consistently rectified such matters,” said Goplerud. “We are an accredited ABA school and we have adhered to the standards and regulatory requirements of the federal student financial aid programs. Our graduates are among the best and brightest attorneys and we are proud of what they have accomplished.”

FCSL bar pass results in recent years have outperformed peer institutions in Florida. The February 2021 exam results released in March showed the law school graduates scored six points above the statewide pass rate and ahead of five of the 11 Florida law schools. The latest employment data also shows 93 percent employment for the class of 2020. FCSL graduates are among the leadership of the Jacksonville Bar Association, one is President of the Young Lawyers Division of the Florida Bar and another graduate serves on the Executive Committee of the Board of Governors of the Florida Bar Association. The school also has alumni who serve in the Florida House of Representatives and the South Carolina House of Representatives.

FCSL has 10 days to submit its appeal to ED and the school administration plans to do so. The school has been in communication with all students, faculty and staff to keep them informed of the situation. A teach-out plan has also been submitted to the ABA as required. The ABA should inform the school of its decision on the plan next week.

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