National Consumers League

Abrupt campus closures of major for-profit college exemplifies flaws


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Tucked into the back page of the Washington Post last week was a report about the abrupt closure of another for-profit college chain, the Education Corporation of America (ECA). Virginia College and Brightwood College of Maryland announced they would shut down quickly – affecting 20,000 students at 75 campuses – and ECA says it’s on the brink of insolvency.

 

In a statement on Thursday, Brian Frosh, attorney general of Maryland, said this closure without advance notice or planning demonstrates how poorly equipped for-profit colleges are to provide a quality education to students and plan for stormy financial weather.

Now Maryland officials are scrambling to work with ECA to help its students transfer credits or have their loans forgiven.

NCL has written about the poor record of for-profit colleges – their high default rates, low graduation rates, targeting of low-income and students of color, and dependence on students’ taking out expensive federal loans with dubious employment options after getting a degree, if they even do get a degree.

In closing its doors, ECA complained that the Obama Administration had stripped its accreditor – the Accrediting Council for Independent Colleges and Schools (ACICS) – of the power to participate in the federal student aid program, which is easy money for these low-quality for-profit schools. ECA filed suit against the Department of Education as a result.

But what the ECA suit does not say about ACICS is how the accreditation agency had taken its own action against Virginia College over its concerns.

In a letter, ACICS told ECA’s Virginia College, “The Council has reviewed your recently submitted 2017 Campus Accountability Report (CAR) for the Macon, GA, campus, and the campus-level placement rate of 16% is materially below the Council standard of 60%.”

When your own accreditation agency says you’re failing to meet basic standards, then that’s not really the Department of Education’s fault.

Under Education Secretary Betsy DeVos, for-profit colleges have had a reprieve, but apparently not enough to save the likes of ECA from going under. Without the pipeline of federal loan money going to ECA via students taking out those loans, their enrollment has dropped, along with their reputation. We agree with Maryland AG Frosh, who said, “The continuing harm to students of for-profit colleges shows the need for the Department of Education to change course and start protecting students.”