We were informed on April 2, 2021 that the U. S. Department of Education (“Department”) terminated the Title IV Student Loan eligibility of our Law School. For the first time in school history, the Department requested our equity investor to sign the Program Participation Agreement (“PPA”) between the Department and Florida Coastal. Our equity investor provided information to the Department showing that its fund contracts prohibited it from providing the signature requested. The Department was provided the relevant information to explain the situation and the legal limitations.
The equity investor relinquished its shares on April 5, 2021. We provided the Department with documentation of the divestiture on that day. Florida Coastal submitted an application for reinstatement in the Title IV program on April 7, 2021.
The ABA requires a school that has had its participation agreement terminated to submit a teach out plan for approval. We will be submitting a plan on May 7, 2021 that would include a time frame for all current students to complete their degrees, followed by closure of the school. During this time the school would continue to be accredited, thus allowing all graduates to be eligible to apply to sit for a bar examination. We are, however, very hopeful that participation in the loan program will be reinstated and the teach out becomes unnecessary.