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Globe University Charged Students 18 Percent on College Loans, MN Attorney General Alleges

The MN AG says Globe threatened some students with expulsion if they didn't sign up for the inflated loans.

The MN AG says Globe threatened some students with expulsion if they didn't sign up for the inflated loans.

Globe University apparently just can't get out of its own way when it comes to the Minnesota Attorney General.

The Woodbury-based for-profit higher ed company with an estimated 10,000 students at campuses in Minnesota, Wisconsin, and South Dakota added a new chapter to its never-ending legal battles when Lori Swanson's office accused Globe University recently of offering illegal college loans to thousands of students at interest rates as high as 18 percent.

See also: John Kline, Who's Fought to Keep Student Loan Rates High, Says He Cares About College Costs

Under state law, the maximum interest rate for student loans is 8 percent.

Earlier this month, Swanson asked a Hennepin County judge to nullify those loans to almost 6,000 Minnesota students and force the company to reimburse them for all payments made over the past four years.

Globe has denied the charges.

According to the AG's complaint, Globe allegedly offered its in-house loans to students when their other forms of aid ran out. In some instances, students were plucked from class and pressured into signing up for the loans under the threat that they'd have to drop out of school otherwise.

The student loan controversy is just the latest legal headache for Globe in Minnesota.

Swanson filed a consumer-fraud lawsuit last summer against the school and its for-profit cousin, Minnesota School of Business, alleging the institutions suckered prospective students into criminal justice degree programs with misleading career claims and strong-armed sales pitches.

Globe has denied those charges as well.

The most recent case is scheduled for trial in November.

According to the website collegefactual.com, the average interest-included loan debt load over four years for students enrolled at Globe's Woodbury campus can amount to almost $48,000.

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