Shuttered For-Profit College Was Run By Industry Perennial
When a for-profit college chain abruptly closes, locking out its students and leaving their futures in doubt, the industry is often quick to disavow the dead school as a wayward abuser, an outlier. In reality, though, many of the surviving for-profit college chains use the same predatory playbook as the collapsed ones, and leaders of the dead schools are often industry veterans, people who have already presided over abuses and collapses at other colleges — and may try again running a new taxpayer-funded school soon after.
Every time a for-profit college closes, students and taxpayers are left holding the bag (along with the traditional trinity of top for-profit college bankruptcy creditors: lawyers, landlords, and lead generators).
Last week’s sudden closure — literally mid-class for some students — and bankruptcy of Texas-based Vista College, which offered programs in medical assisting, information technology, cosmetology, business, and other career fields, illustrates how for-profit college executives — mostly a group of white men presiding over schools that deceive, overcharge, and under-educate women of color and other struggling Americans — recycle themselves over and over.
Jim Tolbert is the CEO of the company behind Vista College, called Education Futures Group, which in turn has been owned by Prospect Partners, a Chicago-based private equity firm. Prospect sports a predictable all-white-male team (with a female office manager providing diversity). Tolbert formed the college chain that became Vista with Prospect Partners in 2005-2006. (The Prospect Partners page boasting of the company’s investment in Vista has now disappeared, although a write-up about Prospect Partners is still featured on the Education Futures Group homepage.)
Vista College, which enrolled around 3000 students last year, had many of the hallmarks of predatory schools. Its campuses sometimes came perilously close to exceeding the legal limit of getting 90 percent of their revenue from federal grants and loans. Its programs in medical assisting and office management flunked the Obama administration’s gainful employment rule, which, before it was cancelled by Betsy DeVos, aimed to weed out programs that buried students in debt.
Such performance failures apparently were not how Vista measured itself. In a profile of Tolbert on its website, Vista described itself as “wildly successful.”
Tolbert is a man of the for-profit college industry; indeed he scaled the heights of the industry’s central lobbying group, ultimately serving as chairman of the Career College Association. That group is now called Career Education Colleges and Universities (CECU), the ever-active cheerleader for the industry in Washington DC.
Tolbert previously was chief financial officer of and investor in another career chain, Virginia College, starting in 1999, the year Prospect Partners (later Tolbert’s partner in Vista) created a holding company called Education Corporation of America (ECA) and acquired Virginia College. Tolbert left Virginia College/ECA soon after its 2004 “recapitalization,” in which 80 percent of the company was acquired by another Chicago-based private equity firm, Willis Stein and Partners. (Willis Stein became among the most aggressive resisters to efforts by the Obama administration and Democrats in Congress to hold predatory colleges accountable for waste, fraud, and abuse.) That’s when Tolbert and Prospect started building the operation that turned into Vista.
In 2018, ECA suddenly shut down its 70 campuses across the country, including Virginia College and Brightwood College (which ECA had acquired from another predatory chain, Kaplan). Like other previously shuttered chains, including Corinthian Colleges and ITT Tech, ECA had financial problems, poor student outcomes, troubles with accreditors, and problems with law enforcement.
Predatory chains like ECA, ITT, and Corinthian continued enrolling students until closure was imminent, banking as much taxpayer cash as possible to the bitter end.
When ECA’s Virginia College and Brightwood collapsed, guess what helpful college operator stepped forward to offer their students an invitation to enroll at his school? None other than Vista College CEO Jim Tolbert, who, perhaps because he previously helped run ECA, felt the students’ pain: “We know that they have worked hard and are now trying to figure out their next steps,” Tolbert said in a written statement, “and we want to assist with that process.” Shucks.
Before joining Virginia College, Tolbert, according to his bio, “was the Founder and CEO of Career College Loan Company, a specialty consumer finance company, providing tuition financing to the for-profit education sector.” Before that Tolbert worked at McKinsey & Company, Disney, and Morgan Stanley.
Rather than attending a for-profit college, Tolbert received a BA in economics from the University of Pennsylvania’s Wharton School and an MBA from the University of Chicago.
When Tolbert’s latest school, Vista, shut down, it informed students — veterans, single moms, and others — by email. Clarence Robinson, an army vet studying business administration at Vista’s Killeen, Texas, campus, got the message while at the movies celebrating the completion of a course. He told TV station KCEN that when he tried to call the school for information, the phone lines were disconnected. “It is not easy trying to find another school,” Robinson said.
Jim Tolbert explained that he was putting students first, telling station KBTX, “We were seeing significant decreases in our school population. And so for the best interest of the students, we decided to suspend enrollment. The reason we did that is to make sure we had all the financial resources at our disposal to make sure the students currently enrolled in school get exactly what they paid for.”
Vista student Virginia Galaviz, who attended the College Station campus, did not feel the benevolence Tolbert claimed. She told the same TV station that she had more than $23,000 in student loans for her medical assistant program. She said she recently realized the school “had actually tacked on two more loans and the price of a book. This is before we knew that they were closing.”
Students at Vista’s El Paso campus also did not seem to agree with Tolbert that they “got exactly what they paid for”; they protested in front of the school.
The Texas Workforce Commission, which has oversight of career colleges in the state, says Vista did not even notify it of the closure.
If past is prologue, then Jim Tolbert may be back running another for-profit college soon, just as long-time industry executives like Todd Nelson, Jack Larson, Jon Coover, and Arthur Benjamin keep popping up to run new for-profit college operations, despite controversies and poor outcomes at previous schools. And just as, some former employees fear, the men behind recently collapsed, awful, predatory Center for Excellence in Higher Education — Carl Barney, Eric Juhlin, Kody Larsen — may be scheming to start another college soon. The money is way too good, and the con — unless the government at last steps up and enforces the law — is way too easy.