For-Profit Education Corporation of America Closing Schools
When you start an educational program, you expect to be able to finish that program but that isn’t always the case. One reason that can happen, that has nothing to do with the student, is when a school closes. This is exactly what is happening to schools run by the Education Corporation of America, where many GI Bill recipients use their funds to gain an education.
The Education Corporation of America is Closing & What it Means for GI Bill Students
Education Corporation of America announced on Wednesday that they were closing in dozens of their locations nationwide. The company, that operates out of Birmingham, Alabama, is closing schools that operate as Virginia College, Brightwood College, Brightwood Career Institute, Ecotech Institute and the Golf Academy of America in more than 70 locations, in 21 states.
As far as the GI Bill goes, in 2017, the ECA enrolled about 4000 students using the Post-9/11 GI Bill for their education. According to data from the Department of Veterans Affairs, over $41 million went to pay for education at these schools.
Some of the students were told that the school was closing immediately and others were told to attend a meeting later on. Students should be able to at least get credit for this term.
Why is Education Corporation of America closing schools?
Their accrediting agency suspended their approval. They have had allegations that they were loading students up with debt but not providing them with marketable skills, the ones that they thought they would be learning. According to Education Corporation of America’s CEO Stuart Reed, the company was unable to raise money to operate the schools because of the company’s loss of accreditation, and the added requirements from the US Department of Education.
The company sued the US Education Department to maintain its federal funding, however the judge dismissed the suit. According to court documents filed by the company, they could not make payments on their debt as well as rental fees and faced eviction at several campuses.
The US Education Department did criticize them because they had been working with the ECA to arrange a shut-down that gave students time to transfer before the school was shut down.
The ECA was overseen by the Accrediting Council for Independent Colleges and Schools (ACICS,) which is a watchdog group the federal government appoints to ensure colleges offer a quality education. They wrote a letter to the CEO Stuart Reed saying that they were suspending accreditations immediately at all their institutions citing, “rapidly deteriorating financial conditions” plus a failure to make required payments to the council and a wide variety of academic concerns.
The ACICS has been recently reinstated this November by Education Secretary, Betsy Devos, after being shutdown during the Obama administration over allegations of lax oversight.
What will happen with the students?
After the schools, Corinthian and ITT Tech closed a few years ago, the fact that they educated thousands of student veterans when they closed led to the part of the Forever GI Bill that restores GI Bill benefits to victims of abrupt school closures. This is good for those who attended the ECA schools on the GI Bill.
For those with student loans, they might be able to ask the US Department of Education to cancel their loans if they qualify to do so.
One of the biggest issue is for those in the middle of a program, such as the nursing program. Hopefully there will be other schools that will take their credits and allow them to continue the program there, so they will not have to repeat classes and can finish their education in a timely manner.