Last week, Minnesota Litigator posted on a recent class action filed against Walden University and Laureate Education, not holding back our condemnation of those who exploit the critical importance of higher education in our 21st century economy, those who fleece consumers with hyped, over-priced, and possibly useless products.
Minnesota School of Business (MSB) might also belong in the Hall of Shame.
Apparently MSB offers loans to its students and it charges a very high interest rate, like the interest rate of credit cards. It might be so high as to be illegal under Minnesota law (“usurious”).
The question is whether the MSB loans are “open-end credit,” like a credit card (which would allow for a higher interest rate) or “closed end credit,” like a car loan (a fixed dollar amount, a fixed term, not open-ended) (which has a lower allowable interest rate under state law).
Without digging deeply into the question, the answer seems self-evident. A loan to a student for the purchase of a semester or a year’s enrollment seems like closed-end credit to me. Apparently, MSB literally tells its students that the loans were closed-end credit (and takes the opposite position in the the lawsuit against it by the state of Minnesota).
Because the issue seems so obvious, it is puzzling that the Minnesota Court of Appeals found in favor of MSB.
But the Minnesota Supreme Court has granted the State’s petition for review of the Court of Appeals decision against the State. If nothing else, let us hope the spotlight will shine on a so-called “for profit” school, which might be profitable for investors in the school and financially destructive to investors in the education, i.e., students at the school.