Charlene CrowellColumnistsFinancial Literacy

Unexpected For-Profit College Closures Come Before Christmas

Just a week before Christmas, some are dealing with something far colder than the weather: college closures with no advance notice and a promise of more information at a date yet to be determined.

On the afternoon of Dec. 17, Vatterott College told its students and staff by email to gather their belongings and leave the campuses no later than 4 p.m. The for-profit college had struggled for more than a year with financial stability as well as a more recent loss of accreditation.

“All Vatterott schools and locations will closely completely and immediately effective today,” students and staff alike were advised.

With 15 campuses scattered across the states of Illinois, Missouri, Oklahoma and Tennessee, an estimated 2,300 students were given little to no helpful information. Answers to questions as to whether studies would be able to transfer to other institutions, how or when students could secure their own student records, were deferred and referred to a website “in the coming days.”

For its 950 employees, Vatterott sent a similar letter. Staff would be paid through Dec. 17 or the last day worked. Further, their health insurance ended with their employment. Any keys or passes were to be returned to the campus director that day — again by 4 p.m.

Today, the average student loan balance among baccalaureate graduates is $34,000. But for those who attend for-profit colleges, the cost can be even higher.

Kaylin Reeves, a Vatterott student interviewed by St. Louis’ Fox2 News, publicly shared her reactions.

“We are out $38,000, we are out an education,” she said. “Most of us took times out of our lives and sacrificed our time with our kids to be here, to better ourselves to pretty much be told, ‘You’re screwed.'”

Monica Williams, another stranded Vatterott student, remarked, “My time, I can’t get that back. I worked hard for this, you know? It’s not fair.”

Illinois Sen. Dick Durbin lamented the closing in an issued statement.

“Another overcharging, underperforming for-profit college has closed its doors,” Durbin said. “It’s the second major chain in just the last three weeks to abruptly close. And it won’t be the last.”

The other for-profit institution Durbin referenced was Virginia College, a for-profit college that closed Dec. 5. With 75 campuses across the nation, the Southeast was where the majority of Virginia College’s campuses were located across the states of Alabama, Florida, Georgia, Louisiana, Mississippi, Tennessee, Texas and Virginia. Students were enrolled in studies that included cosmetology, culinary arts, and medical or dental assistant programs.

Both Vatterott and Virginia College closures followed on the heels of their lost accreditation just a day earlier.

What is most bothersome about these latest for-profit closures is that they sound so similar to earlier college closures such as Corinthian College, ITT Tech and others. The students targeted — no, preyed upon — continue to be those from low-income families, older adults returning to school to better provide for their families, and military veterans seeking to make a successful transition to civilian life.

And one more unifying trait between these institutions: People of color, usually Black or Latino, were disproportionately affected.

Low-income students eligible for the maximum federal student aid like a combination of a Pell Grant and a loan, and/or veterans with GI benefits, can lead to taxpayers funding nearly all of for-profit college tuition and other enrollment costs.

Across the country, few for-profit students seldom learn until it is too late that fewer than 30 percent of for-profit students graduate within six years of their enrollment.

As long as I can remember, Black people were told and taught that education was the barrier to break through to earn entry into the middle class. Yet the continuing spate of for-profit college closures has led to a disturbing pattern of Blacks and Latinos winding up with no degree, no skills, and certainly no jobs that pay enough for their loans and accruing interest to be repaid.

The Obama administration designed rules such as the Borrower Defense to Repayment Rule as a financial remedy for students who were promised but failed to receive a college education with marketable skills and higher earnings. Others like Gainful Employment were meant to rein in abusive schools before they could harm students. With Secretary Betsy DeVos heading the Department of Education, both rules have been undermined.

These latest closures coming just a week before Christmas deliver a range of reactions that are polar opposites to the season’s joy and goodwill.

Instead of the seasonal refrain of “Ho, ho, ho,” these consumers — former employees and students alike — are likely shaking their heads and repeating, “No, no, no.”

Charlene Crowell is the Center for Responsible Lending’s communications deputy director. She can be reached at Charlene.crowell@responsiblelending.org.

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