For-Profit College Chain, Education Corporation of America, Announces Shutdown
A for-profit college chain mired in financial troubles announced on Wednesday it is shutting down dozens of campuses across the country by the end of the month. The abrupt decision comes a day after the company lost its accreditation and funding, leaving frantic students scrambling in the final days of the year to enroll in new schools.
The Education Corporation of America, based in Birmingham, Ala., operates 75 campuses — primarily under the names Brightwood College, Brightwood Career Institute and Virginia College — that mostly offer vocational training and associates degrees. About 20,000 students are currently enrolled. It is unclear how many are expected to graduate at the end of the term.
"It is with a heavy heart that today we announce that [ECA] is closing all its career colleges effective with the completion of the current module or term for most students," Diane Worthington, ECA's vice president of marketing communications, told Education Dive in an emailed statement.
ECA did not respond to NPR's requests for comment.
The move follows the Dec. 4 decision by the Accrediting Council for Independent Colleges and Schools to suspend the company's accreditation. In a letter to ECA's Chief Executive Officer, Stuart Reed, the ACICS explained that that the company had not adequately resolved concerns over student progress, student satisfaction, outcomes, certification and licensure and staff turnover.
"The Council is seriously concerned about the education outcomes for the approximately 15,000 enrolled students across all campuses of Virginia College, LLC, which includes students who are set to complete at the end of the December 2018 term," the council said. Additionally, the ACICS wrote that the company had failed to meet its financial obligations and reneged on a payment plan.
ECA has been on the verge of financial ruin for some time, falling behind on rental payments and facing eviction in some cases. As a result, in September officials announced a plan to shut down about a third of campuses by 2020 and the company entered into a court-approved receivership.
A letter obtained by the Knoxville News Sentinel from ECA's President Stu Reed to students offered the following explanation:
"In early fall, we undertook a path to dramatically restructure Education Corporation of America* (parent company of the campus in which you applied) to best posture it for the future. This plan entailed the commitment of additional funds from investors.
"However, recently, the Department of Education added requirements that made operating our schools more challenging. In addition, last night ACICS suspended our schools' accreditation with intent to withdraw. The uncertainty of these requirements resulted in an inability to acquire additional capital to operate our schools."
U.S. Department of Education spokeswoman Liz Hill was critical of ECA's sudden decision to close its campuses, calling it "highly disappointing and not best for its students."
"There were other options available," Hill said, adding that the department was in daily conversations with ECA. "Instead of taking the next few months to close in an orderly fashion, ECA took the easy way out and left 19,000 students scrambling to find a way to finish the education program they started. The Department is ready to help ECA students with either transferring their credits to new schools or applying for closed school discharges."
ECA's Worthington told Inside Higher Ed that campus employees "will work with students to ensure access to their transcripts so they can complete their studies at another school." She added, "This is not the outcome that we envisioned and is one that we recognize will have a dramatic effect on our students, employees, and many partners."
On Wednesday, Alexis Gurrola, a dental assistant student in her first semester, seemed stunned to learn the Corpus Christi Brightwood College campus would cease to exist in a few weeks, Caller Times reported.
"They don't really have many answers for us. What they told us is they're not going to charge us for any future payments, but we pretty much shouldn't show up next week," Gurrola said.
Reporter Julie Garcia tweeted that students had been "walking around the campus crying."
According to Garcia, some students who rushed to check for availability with other local vocational schools were told there are waiting lists to enroll.
There is a lot of confusion about whether or not classes will transfer but Gurrola told the newspaper "students were told they would receive credit for what they have already taken and would be able to receive an unofficial transcript."
Federal student loan borrowers whose schools close could be eligible to apply for a loan discharge by Department of Education.
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