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Members of Congress are seeking to help former employees of a former for-profit school in southern California that suddenly closed.  As reported in the Los Angeles Times, the for-profit Career Colleges of America suddenly closed in January 2014 due to a loss of accreditation and a resulting loss of eligibility for federal financial aid.   A letter from two congresswomen from Los Angeles notes that hundreds of employees of the school apparently worked without pay for weeks prior to the closing, and demands that the school's owners remedy the situation. 
Sudden closures of for-profit colleges across the United States often cause significant harm to former students and employees.  If you have concerns about the closure of a for-profit school that you want to share with an attorney, send us an e-mail at contact@collegewatchdogs.net
 
 
The Los Angeles Times has joined the call among major newspapers for regulatory reform that would require colleges and trade schools -- particularly those for-profit schools selling career programs -- to demonstrate that the expensive programs that they market actually result in gainful employment.  Praising the Obama Administration's recent proposal for new federal rules on the subject, the newspaper wrote in part, "For-profit colleges that wildly exaggerate their graduates' success and talk prospective attendees into taking on extraordinary debt are not only harming their students but costing taxpayers billions of dollars on wasted Pell grants and defaulted federal student loans. After an earlier court defeat, the Obama administration is trying again to set rules to stop schools from overpromising to attract students. This time, the rules should stick. The administration has spent years looking for ways to crack down on the bad actors within the for-profit college industry, which accounts for just 13% of college enrollment but almost half of all federal student loan defaults. The misrepresentations made to prospective students have been widely documented; culinary schools, for instance, have been known to count janitors at fast-food restaurants as graduates who have secured work in their chosen field. But so far, aggressive lobbying and legal complaints by the schools have stymied reform. The new rules, announced this month, don't only target for-profit colleges but apply to any non-degree program that promotes itself as a gateway to "gainful employment." Applicants to such schools would not qualify for federal grants and loans if the default rate for the program they plan to attend is more than 30% and if loan payments regularly exceed a certain percentage of graduates' incomes. It is expected that the rules will overwhelmingly affect for-profit colleges."
 
 
A recent article in the Chronicle of Higher Education reported on a study by the Nexus Research and Policy center that considered the cost to taxpayers if all for-profit schools were put out of business.    The study suggested that California, New York, Ohio and Texas alone would spend $8.4 billion more over five years to accommodate all the displaced students.

While the study may raise interesting public policy questions regarding the role of for-profit colleges in the range of higher education options in the United States, it does not address how devastating the experience at some for-profit colleges can be for some students who are misled about matters such as accreditation and job placement and incur tens of thousands of dollars in debt pursuing what may be their only opportunity for higher education.

 
 
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The Riverside, California Press Enterprise has published a story detailing the pending federal lawsuit against ITT Educational Service, Inc., which operates one of its campuses in the Riverside area.  
The newspaper interviewed a number of students at the local ITT campus who detailed their experiences with ITT and the heavy debt burden they had developed while attending programs at the school.  One such student, Tyler Keaggy, 23, told the Press Enterprise that he feels trapped in a situation where he has to continue taking classes for a degree in project management, in part to defer beginning to have to pay on student loans that total $63,000.
“They [ITT]  kind of go through a process,” Keaggy is quoted as saying, “where they take you to financial aid and they do it on the computer, so you don’t really get to read it all or know where those private loans are coming from. In fact, I still don’t know."
The newspaper also reported:
"According to the lawsuit, ITT trained its recruiters to get people who inquired about its programs to visit the campus in person where they would be more susceptible to a high-pressure sales pitch that could go on for hours."
"When someone asked about the college’s cost, the recruiters were instructed to make statements such as “I cannot tell you what your exact cost will be...it varies student to student.” They were to add that the person would find out about the cost “when you come in for the tour.”
When a reporter visited the lobby of ITT’s campus in Orange last week, there were no brochures available to describe the degree programs or their cost. An employee said the college doesn’t provide brochures to visitors, but that people are told those details when they take a campus tour. She said much of that information was also available on the company’s website.
The government alleges ITT misled prospective students with statistics that exaggerated how much they would earn and their chances of getting a job with a degree."
"Laura Brozek worked as a top recruiter for ITT in Orange County, and at two of its other Southern California campuses until 2011, when she became concerned about management’s tactics. Brozek provided written testimony about her experience to the Senate Committee on Health, Education, Labor and Pensions in 2012."
"In an interview with the Register, she detailed how recruiters had used a technique called “the pain funnel,” which was meant to manipulate potential students’ emotions to get them to enroll.
“I would focus on people’s shortcomings,” Brozek said in the interview. “We played upon the vulnerable.”"



 
 
Sojourner-Douglass  College in Baltimore is facing a potential loss of accreditation, according to a report in the Baltimore Sun.  The newspaper reports that the accreditation problem, coupled with financial losses, is causing an uncertain future for the small college.  The Middle States Commission on Higher Education has given the college until September 1, 2014 to "show cause," or demonstrate, why its accreditation should not be revoked.  The Sun story states in part, "Sojourner-Douglass College was first placed on 'warn' status in November 2011 by the Middle States Commission, which found its financial resources, student learning outcomes and goal-setting insufficient. Colleges typically are given up to two years to come into compliance after a warning is given, according to Middle States Commission spokesman Richard J. Pokrass.One year later, the commission found that the college had sufficiently addressed concerns about student learning and goal setting but still needed to address its shaky finances.  [The college's president] said the college was in the midst of trying to fix its financial difficulties when they began to mount further. The Middle States Commission gave the college a one-year extension in late 2012 to address the financial concerns, said Pokrass."