MN School of Business, Globe U. fraud leaves broken dreams, big debt

Perry Schramm always wanted to be a cop. That's why he enrolled in the Minnesota School of Business' criminal justice program seven years ago. He finished in 2013.

"Just imagine everything that you've worked for three to five years," he said. "And, one day somebody said all that work was for nothing."

In so many words, that's what happened to Schramm.

He knew the school wasn't certified by the state's police board, but said he was told by the school that his credits would transfer. And at the time, was working a full time job to help support his family. The Minnesota School of Business offered online courses he could take at night, an easy path to become a police officer.

After graduating, he tried to transfer to Metropolitan State University. He was told only 27 of his 180 credits were transferable, most of which had come from one semester at St. Cloud State University.

"What am I going to do now? I'm $60,000 in debt. You're just confused. I was angry. I was sad. I was hurt. I was lied to. It was awful," he said.

Schramm said the Minnesota School of Business and Globe University led him to believe its criminal justice program would prepare him for a career in law enforcement. Many students say they were encouraged by the for-profit schools to take out loans to pay tuition.

The state sued, alleging the school defrauded more than 1,000 students. A Hennepin County judge ruled the schools violated state consumer fraud and deceptive trade practices laws, and ordered the schools to pay restitution to those students.

Following the suit, the State Office of Higher Education said the schools could not be registered in the state or take on new students. When the schools became ineligible for federal funding in December, they began to close campuses.

Currently enrolled students are finishing courses over the next couple of semesters at Globe and Minnesota School of Business. Whether the schools will try to stay open is unclear.

Globe did not respond to multiple interview requests.

Last week, school CEO Jeanne Hermann told the state Senate Higher Education Committee Globe regretted "any harm that may have been realized by some students as a result of not being able to fulfill a dream they may have had in becoming a police officer."

She added: "I do ask that you consider the collateral damage that's been caused to the citizens of this state. In attempting to protect a specific group of students, thousands of students were displaced and hundreds of Minnesotans have lost their jobs."

Hermann did not answer specifically when asked whether the schools would pay students back as ordered by the court, only that they intend to comply with legal requirements.

"We understand and take very seriously the findings in this case," she said.

Given the loss of federal income and no longer being registered with the state, bankruptcy could be one avenue for the schools. It's possible, said Minnesota Attorney General Lori Swanson, who brought the lawsuit against the schools.

"At this point, we'll have to see, there hasn't been a bankruptcy filing made at this juncture," she said. "But certainly the ability of the school or willingness of the school to pay restitution is a concern to me as well."

Former student Schramm said paying back a large amount of debt weighs on his family. But he's also unhappy about the time he said was wasted.

"My world ended. I spent three years working for a B average. Right at the end, a 3.0 is what it took. I was really proud of that," he said. "Then I found out that my dreams of being a police officer in the state of Minnesota were just gone, just like that. Just completely vanished."