Appeals court rules MN School of Business, Globe U must repay high-interest loans

Appeals court rules MN School of Business, Globe U must repay high-interest loans

The Minnesota Court of Appeals has ruled that Globe University and the Minnesota School of Business must pay back students who took out millions of dollars in high-interest loans.

Minnesota's Office of Higher Education revoked the schools' licenses to operate in 2016.

Former Minnesota Attorney General Lori Swanson praised the ruling released Monday. She had sued the schools in 2014, charging they exceeded state limits on loan rates and engaged in deceptive trade practices.

"They made loans to students, about 6,000 students," she said. "On these loans, many of them, they were charging interest of up to 12 to 18 percent interest."

The appeals court ruled that loans made since 2008 with interest rates greater than 8 percent were illegal. In addition, the court said students are entitled to repayment of all principal and interest paid on those loans.

A district court had ruled students did not have to continue paying the loans. But that court did not order the schools to repay students for payments already made.

Swanson said students had received about $3.5 million in repayments and the ruling should give them about another $3.5 million.

An attorney for the schools did not immediately respond to a request for comment.