By Glynn Wilson –
There may be no better example of a corrupt, capitalist corporation trying to profit from the American dream of young people in the United States to advance themselves with an education than the Birmingham, Alabama-based Education Corporation of America, which announced this week the closing of 75 colleges across the country.
There was no advance warning for the 20,000 students who learned of the closing of widely advertised Virginia College, along with Brightwood College, the Brightwood Career Institute, Ecotech Institute and the Golf Academy of America in a letter to students and a post on a website announcing that operations would be discontinued in December of 2018.
Apparently the national newspaper USA Today broke the story: National for-profit college chain abruptly closes, stunning thousands of students.
In a letter to students, company president and CEO Stu Reed said:
“It is with extreme regret that this series of recent circumstances has forced us to discontinue the operations of our schools. Unfortunately, this means that your enrollment will be cancelled and there will not be future classes at the campus in which you enrolled or any Education Corporation of America campuses.”
Apparently the company’s colleges lost accreditation due to new rules put in place by the Trump administration’s Department of Education, and lost money immediately when the Trump Department of Veterans Affairs refused to pay benefits owed to student veterans and the children of veterans.
But the company was already at risk due to $50 million in unsecured debt to creditors.
As an excuse, Reed said the company was in the process of restructuring and seeking additional funds from investors when the Department of Education added new requirements for accreditation, “that made operating our schools more challenging.”
“The uncertainty of these requirements resulted in an inability to acquire additional capital to operate our schools,” Reed said. “We encourage you to pursue your career training with another school in your area that offers the same or similar program. This is clearly not the outcome we envisioned for you or our schools, and it with the utmost regret that I inform you of this direction.”
The Accrediting Council for Independent Colleges and Schools suspended the company’s accreditation Dec. 4. It was apparently one of the largest for-profit colleges in the country, serving at least 20,000 students, according to Inside Higher Ed, 4,000 of them veterans or military service members.
At the Corpus Christi, Texas, branch of Brightwood College on Wednesday, stunned students walked around the campus crying.
Alexis Gurrola, a student in the dental assistant program, said she didn’t know what her next steps would be. She was “top of the class” and received straight A’s in the four months she attended Brightwood.
“They don’t really have many answers for us,” Gurrola said. “We can take our final (test) and get credit for this last course.”
If a school closes, students with loans can ask the U.S. Department of Education to cancel those loans, according to Toby Merrill, director of the Project on Predatory Student Lending.
In response to the news, U.S. Senator Doug Jones of Alabama wrote a letter to the company asking for more help for students who invested thousands of dollars in the now-defunct schools.
Jones wrote to CEO Stu Reed calling for ECA to help students navigate their options and understand the resources available to them. Based in Birmingham, ECA operates for-profit Virginia College campuses in Birmingham, Huntsville, Mobile, and Montgomery and serves more than 3,800 Alabama students, 670 receiving GI Bill benefits, Jones said.
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Information for students is currently not expected to be available until on or around December 17, Jones said, which could delay students from being able to transfer to another institution in time for the spring semester.Jones urged Reed to speed up outreach and assistance to students.“
After abruptly closing the doors, your decision to make students and families wait nearly two weeks to receive any information about their next steps is simply unacceptable,” Senator Jones said. “You have a responsibility to these students, including our veterans and service members, to ensure they have all of the tools and information they need to move forward, including the choice between receiving a discharge of their federal student loans or transferring to a similar program if they can find an institution willing to accept their credits.”
The announcement also got the attention of Maryland Attorney General Brian Frosh, since Brightwood has three campuses in Maryland, in Towson, Beltsville and Baltimore.Students who are currently attending Brightwood College or withdrew within 120 days of the closure should be aware of their options, Frosh said in an announcement issued Friday.
“The closure of Brightwood College’s three Maryland campuses is distressing and saddening because of the harmful effect this has on hundreds of Maryland students,” Frosh said. “The continuing harm to students of for-profit colleges shows the need for the U.S. Department of Education to change course and start protecting students.”
Full text of Senator Jones’ letter
December 6, 2018
Dear Mr. Reed:
I am writing on behalf of the students in Alabama and across the country who are enrolled in one of Education Corporation of America’s colleges, including Brightwood Career Institute, Brightwood College, Ecotech Institute, Golf Academy of America, and Virginia College.
When the news broke yesterday regarding your decision to abruptly close these colleges, I was immediately concerned about the futures of 20,000 students enrolled nationwide in 20 states, including 4,000 veterans and military service members using the G.I. Bill.
In Alabama, Education Corporation of America’s Virginia College campuses will close in Birmingham, Huntsville, Mobile, and Montgomery, leaving a combined total of more than 3,800 students in my state, including 670 student veterans who have been using the G.I. Bill benefits they have earned, left scrambling to figure out their educational future. According to your company’s website, there will be information for students regarding transcript retrieval, transfer, and contact information that you “expect to start loading” on or around December 17, 2018.
After abruptly closing the doors, your decision to make students and families wait nearly two weeks to receive any information about their next steps is simply unacceptable.
You have a responsibility to these students, including our veterans and service members, to ensure they have all of the tools and information they need to move forward, including the choice between receiving a discharge of their federal student loans or transferring to a similar program if they can find an institution willing to accept their credits. Veteran students also need to understand the impact of the closure on their G.I. Bill benefit eligibility.
I am deeply troubled by reports that many Education Corporation of America colleges have not been informing students of their right to seek a “closed school discharge” of their federal loan as is required by federal law under the 2016 “borrower defense” rule. Additionally, students who are encouraged to transfer should understand the limitations of fully transferring credits, and the impact on their eligibility for a loan discharge.
I urge you to do all you can to inform these students of their options. They have invested thousands of dollars into your institution and could potentially lose everything.
Sincerely,
Doug Jones
U.S. Senator
