Globe U accused of making illegal student loans with 'usurious interest rates'

[azurnoir]

Source: Strib

Attorney General Lori Swanson is expanding her legal battle against Globe University, accusing the company of violating state law by offering unlicensed college loans to thousands of students and charging “usurious interest rates” of up to 18 percent.

On Friday, Swanson asked a Hennepin County court to invalidate those loans, known as Educational Opportunities and Student Access loans, and to order the company to reimburse students for all payments on them since 2009.

“It’s not a bank, it’s not a credit union, it’s not a credit card company,” Swanson said. But Globe made “illegal loans” to nearly 6,000 Minnesota students, according to the court filing, which was an amendment to a 2014 consumer fraud lawsuit against the company.

According to the complaint, Globe was charging interest on some loans at “a staggering rate of 18%,” more than twice the 8 percent maximum allowed by state law.

“Accordingly, these students are under no obligation to pay any amount owing and are entitled to recover all amounts paid,” the lawsuit asserts.



Read more: http://www.startribune.com/local/297072081.html

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Hopefully this is but a first nail in the coffin of for profit collages and universities

[FairWinds]

1. For-profit "universities" prey . .

on the vulnerable.
You can't get any lower.
Many Dems support this, by the way, in exchange
for campaign cash.
Infuriating.

[Thor_MN]

2. If I recall correctly it was either Reagan or Bush I that allowed these to be called Universities

and colleges. They used to be called schools or institutes. It should have never been allowed.

[azurnoir]

3. I'm pretty sure Globe is a revamp of the Minnesota School of Business which even when I was a teen

loooong ago had a reputation of providing poor to down right inadequate education, word was don't go there when yyou look for a job saying that you went to Mn School of Business almost automatically disqualifies you because you are not qualified for the job

Thankfully these days my son's high schools collage prep (required class) steers kids away from for profit collages, Globe and the Art Institutes or AEI are at the top of the list of the ones to be avoided

[Thor_MN]

4. I think you are right, these schools need to re-invent themselves every decade or so

to escape the reputation that they build.