Proposed settlement in Mountain State lawsuits would create fund for students

University of Charleston President Ed Welch on Wednesday announces a proposed settlement in the class-action lawsuit filed by former students against now-defunct Mountain State University. Under the terms of the possible agreement, MSU students would continue to receive a discount on tuition at UC.
Plaintiff’s attorney Anthony Majestro talks about the proposed $8.5 million settlement between Mountain State University and its former students.
Plaintiff’s attorney Anthony Majestro (left) and UC President Ed Welch (right) speak Wednesday about a proposed settlement between Mountain State University and its former students. UC took over operations at MSU after the Beckley-based school folded.

A proposed settlement in hundreds of lawsuits filed by former Mountain State University students would create a fund of more than $8.5 million for former students.

Mountain State University would also liquidate its assets and personal property, and money owed to the now-defunct school by the U.S. Department of Education would go toward the fund. A judge would still have to approve any settlement agreement.

The proposed settlement was announced Wednesday at the University of Charleston, which took over operations at Mountain State campuses after the Beckley-based school folded.

About 14,000 former MSU students could be affected by the proposed settlement.

Under the proposal, MSU would sell its campuses in Beckley and Martinsburg. UC would look for a new place to offer classes in Beckley and would move classes in Martinsburg to the National Guard headquarters there. UC would still offer tuition help to former MSU students under the deal.

In June 2012, the Higher Learning Commission revoked MSU’s primary accreditation after years of failing to correct major problems in leadership, program evaluations and campuswide governance.

The lawsuits allege that school officials were deceptive about the problems the school was facing. When a university loses its primary accreditation, any subsequent degrees conferred by the university are effectively worthless. Class-members are made up of students who were attending the school when it lost accreditation.

The roughly 400 cases were granted class-action status and are assigned to West Virginia’s mass litigation panel.

MSU is the first higher education institution in West Virginia history to have its schoolwide accreditation revoked, according to the West Virginia Higher Education Policy Commission.

In May, MSU officials filed a lawsuit in federal court in Beckley against the Higher Learning Commission over the accreditation loss, claiming, among other things, the school wasn’t given enough time to turn things around. Under the proposed settlement, MSU wouldn’t admit wrongdoing and former students would be barred from suing MSU further.

The Higher Learning Commission, a regional accrediting body for colleges and universities in several states including West Virginia, placed MSU on “show cause” status in June 2011, citing the school for its top-down leadership, lack of long-term planning, failure to collaborate with faculty, failure to give information to students, and the loss of specialized accreditation for the nursing program.

A large portion of the lawsuits were filed by nursing students, plaintiff’s attorney Anthony Majestro said Wednesday. While students majoring in many other disciplines were able to transfer to UC, nursing students had to find another school — and most schools wouldn’t accept their previous credits from MSU.

“There was no other place that MSU had provided for them to go,” Majestro said of the nursing students.

Plaintiffs sought damages for delayed educational opportunities, delayed entry into the workforce and student loan debt, among other claims, according to Majestro.

The possible fund would be divided among students based on the number of credits they had paid for that wouldn’t transfer to other programs when MSU closed, Majestro said.

UC President Ed Welch said 416 former MSU students have already graduated from UC. The school took on an additional 550 students from MSU.

In June 2015, UC will lose the right to occupy the MSU facilities it’s leasing in Beckley. The school doesn’t have the financial resources to buy the Beckley campus, according to written information provided by the school about the proposed settlement. However, Welch said, conversations about finding a new location would begin immediately.

“We are intent on being in Beckley, West Virginia,” Welch said. “We are intent on continuing to offer seven or eight of the programs we are offering in Beckley. We have the equipment to offer those programs ... because of the confidential nature of the negotiations we haven’t been able to explore sites until this time, but we will begin this afternoon with conversations with people in the affected area — the community, friends and residents, about alternatives for the University of Charleston beginning 2015-2016.”

UC previously announced it would stop this year offering a culinary arts program in Beckley. Welch said that’s the only change to curriculum for now in Beckley.

The National Guard headquarters will be a permanent solution for Martinsburg students, who are nearly all members of the Guard, Welch said.

In addition to the $8.5 million, United Education, MSU’s insurance company, would provide up to $500,000 to help administer the settlement.

UC has addresses for all former MSU students, Majestro said, and class-members will be given notice and have the opportunity to object to the settlement. A hearing is set Oct. 6 in Raleigh County Circuit Court to set dates for future hearings. Majestro guessed, if approved, the settlement wouldn’t be finalized until early next year.

Reach Kate White at, 304-348-1723 or follow @KateLWhite on Twitter.

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