Florida Coastal School of Law has filed a lawsuit against the Department of Education in U.S. District Court on the grounds that the department has "exceeded and abused its authority and acted arbitrarily, capriciously and without due process" in refusing to allow the institution to participate in federal student aid programs, according to a release.
The Office of Federal Student Aid denied the for-profit law school's application for reinstatement in May, stating that it was failing to meet financial responsibility standards and the fiduciary standard of conduct and standards of participation.
"FCSL has met every proper requirement imposed by the Department, and it even worked in good faith to meet the Department’s ultra vires demands," the complaint said. "But the Department demonstrated that its true objective was to close a viable school as part of a political agenda against proprietary education, while retaining millions of dollars in security posted by the school’s owner."
The complaint argues that even though the department required FCSL's owners to sign a provisional program agreement and assume joint responsibility for any future liabilities of the institution in order to be eligible for Title IV programs, it doesn't have the authority to require ownership to assume joint liability under a PPA. It also alleges the department "manufactured new reasons to keep the school closed" after one of FCSL's owners relinquished all ownership interests to meet the department's standards for reinstatement.
The institution is asking the court to vacate the department's decision. FCSL has also filed an emergency temporary restraining order so that it isn't forced to close at the end of the month.