Woodbury's Globe University banned after being found guilty of fraud

Over the years, Globe pocketed millions in federal money while providing students with often worthless degrees.

Over the years, Globe pocketed millions in federal money while providing students with often worthless degrees.

Globe University founder Frank Maron understood that education didn't serve students if it didn't help them get a job. Maron sired Globe College in 1885 as a business school where students enrolled and breadwinners graduated. The fact that Globe would operate as a for-profit institution only sweetened the deal. 

Terry Myhre eventually bought the education business in 1972. He renamed it Globe University years later. Myhre knew what he was doing. Changes in federal law permitted for-profit schools to access government student loan money, Pell Grants, and GI bill benefits.    

It wasn't long before Globe was swimming in that cash. Between 2011 and 2012, according to the U.S. Department of Education, the company took in about $170 million in federal student aid.

The glory days were on. The Woodbury-headquartered Globe expanded with new campuses across Minnesota and into South Dakota and Wisconsin. At its peak, it enrolled more than 10,000 students at nearly two dozen locations.     

But it wasn't just taxpayers subsidizing Globe's mini empire. Students paid the heavy freight. In 2010, 96 percent of its students took out student loans. They enrolled in two-year programs that  cost about double that of similar associate's degrees offered at community colleges. 

According to the Minnesota Office of Higher Education, Globe graduates left with an average debt load around $45,000. What's more, almost 20 percent were defaulting on their loans.  

The nation finally caught on to Globe's — and the entire for-profit college industry's — unsavory business model four years ago. A damning report from Sen. Tom Harkin (D-IA) showed federal taxpayers were investing $32 billion annually. Half of those who enrolled dropped out. Students who did graduate soon realized their degrees were often worthless.

The report's conclusion: the only ones benefiting from the investment were schools like Globe.   

The beginning of the educator's end inched closer last week. Hennepin County Judge James Moore ruled that Globe, along with the Myhre-owned Minnesota School of Business, committed fraud in marketing and recruiting for their now-closed criminal justice program. The decision spurred the state's Higher Education Office last Thursday to move on pulling the schools' authorization to operate. 

Minnesota law bans private schools if they're found guilty of fraud.

Save for a court injunction stopping the revocation, 1,700 current Minnesota Globe students will likely have a year to figure out where to turn.

What's next for Globe University as a company is uncertain. Spokesperson Michelle Knoll says it has received no formal communication from state officials.

"We will continue to explore all options," she says.