They took the money, they shut the school down
Another for-profit chain of “universities” abruptly shuts down, leaving students with big debts and no degrees.
Birmingham, Alabama-based Education Corp. of America said it was closing schools operating as Virginia College, Brightwood College, Brightwood Career Institute, Ecotech Institute and Golf Academy of America in more than 70 locations in 21 states. The company said in October that it had more than 20,000 students, although more recent documents indicate the number may be closer to 15,000.
The company, backed by investors including private equity firm Willis Stein & Partners of Chicago, is the latest in a series of for-profit colleges to close after allegations that they were loading students up with debt while not providing them with marketable skills.
Well, they’re there to make a profit. Providing students with skills is farther down the list.
Like the recently shuttered Corinthian Colleges and ITT Technical Institute chains, Education Corporation of America was overseen by the Accrediting Council for Independent Colleges and Schools, one of the watchdog groups the federal government appoints to ensure colleges offer a quality education.
The council, known as ACICS, wrote a Tuesday letter to Reed saying it was suspending accreditation immediately at all the institutions, citing “rapidly deteriorating financial conditions,” a failure to make required payments to the council and a wide variety of academic concerns.
ACICS was shut down by the Obama administration over allegations of lax oversight, but was later reinstated on Nov. 21 by Education Secretary Betsy DeVos, who found it was “substantially in compliance” with federal standards.
Virginia Rep. Bobby Scott, the top Democrat on the House Education and the Workforce Committee, urged DeVos to rethink her decision on ACICS after the Wednesday closure.
“We have repeatedly warned about the risks low-quality, for-profit education companies and irresponsible accreditors pose to students and taxpayers across the country,” Scott said in a statement. “Today’s announcement is another painful reminder of those risks.”
In many cases, students and teachers were in class when they got the news Wednesday. Melissa Zavala, who was studying to be a medical assistant at a San Antonio, Texas, campus of Brightwood, told KSAT-TV students were taken to an auditorium.
“The director was there and she was like, ‘I have bad news. The school is closing down,'” Zavala said. “Everyone was like, ‘What about our student loans? We’re almost done.'”
Zavala said campus officials couldn’t provide additional information and told them to look online for other colleges they could attend.
“They took our money, they shut the school down and that’s it for us,” Zavala said.
But hey: profit.
And I’m willing to bet the credits they have completed are not transferable, so they will need to start again.
iknklast–and to make it even ‘better’, the financials work like this:
The students took loans out from banks, often under various government programs, and frequently with the aid of cosigners. Those loans aren’t vacated just because it turns out the school was unable to meet expectations. The students can sue the school, but that usually amounts to nothing because the corporation immediately declares bankruptcy, anyway.
So the corporation goes defunct, and the students are left with worthless credits and a mountain of debt. If the students try to declare bankruptcy, of course, then the banks go after the parents, spouses and others who co-signed the loans. At a bare minimum, there needs to be a change in the law that would void the loans in the case where a school goes under or loses accreditation. This would force the banks to do due diligence BEFORE the student signs the loan paperwork. Hell, I’d even call that a free-market solution to the problem, in that it puts the private sector to work guarding the interests of the students.
I second this heartily. Most students, especially traditional students who are young and inexperienced, are not the best people to recognize they’re being scammed. Unless they’ve been around the higher ed system long enough, they may not be able to tell the difference between legitimate and for-profit scam institutions.
My son got burned that way. I did my best to warn him, suggested he go to a public community college, but the school convinced him they were the only ones who could possibly give him the skills he needed. Then he found out he could not use his degree (a bachelor’s) from this institution to enroll in a Master’s program at any reputable California institution. He’s having to start over, in spite of having a degree that cost several times what a public university degree would have cost him.
I have known quite a few people who said they didn’t have the time to do a standard degree, and a lot of these places promise fast degrees with few hours a week. That should be an immediate key, but they don’t notice. And they didn’t notice that I managed a regular university in spite of being a single mother working three jobs and getting no child support. (At least one of these friends, though, had a husband who was a fundamentalist Christian pastor, and felt it was not his job to help with housework or kids, so she probably had it only twice as good as I did because she had an income to rely on outside of her own puny income). It’s a scam that attacks people who are (1) vulnerable; and (2) uninformed. Often (3) financially insecure. In short, it’s evil.
This article from back in August seems appropriate…
https://www.npr.org/2018/08/27/642199524/student-loan-watchdog-quits-blames-trump-administration