In recent weeks we’ve seen more predatory for-profit colleges falling apart.  Once again it will be a challenge for the U.S. Department of Education, state authorities, and others concerned about students to help the current students at these schools find new colleges or get some of their money back. 

— San Antonio-based Quest College abruptly shut down last month, leaving students locked out. We previously reported on shady dealings at Quest.

— As we have covered extensively, New York City-based ASA College was informed in November by its accreditor that the school would lose accreditation in March for failure “to demonstrate that it can provide a quality student learning experience.” Since then, the Department of Education has placed ASA on restrictive HCM 2 reimbursement status, reserved for financially troubled schools, and the school’s erratic conduct has placed students in turmoil. 

— Massachusetts-based Bay State College is also now on HCM status with the Department of Education, as the state attorney general’s office is investigating allegations of fraud. In 2019, Bay State paid $1.1 million to settle claims by the AG’s office that in 2016 and 2017 it violated state regulations prohibiting false marketing. Bay State, which was acquired in 2017 by China-based Ambow Education, is on probation status with its accreditor, which has warned that the school may lose accreditation because it may lack the “ability to meet its enrollment goals and to ensure it has sufficient faculty and staff to support its educational programs.” In December, the school laid off many of its senior staff members and cancelled a number of academic programs. [UPDATE 01-10-23: Letter sent today from Senator Elizabeth Warren (D-MA) and Rep. Ayanna Pressley (D-MA) to Bay State’s accreditor.]

UPDATE 01-16-23: 

Accreditor New England Commission of Higher Education has decided to withdraw Bay State’s accreditation, effective in August, according to a letter sent today from Bay State interim president Jeff Mason to the school’s students. Mason notes that the end of accreditation means the end of federal student aid. He says the school “will remain open minimally” through the end of August. He further asserts, “If you are scheduled to graduate in May or August 2023, this decision will not affect your progress to your degree.”

I’m not sure what Mason means by “minimally” and how students attending a minimal school will be able to complete their studies.

Mason’s letter continues: “If you were scheduled to graduate after August 2023, the College is committed to working to give you transfer options to another institution in as seamless way as possible. We are in the process of arranging transfer agreements with several area schools.” He adds, “Students may also choose to transfer to another college of their choice, as Bay State credits are and will remain transferable to all colleges and universities.”

He then tells the students, “if you wish to forego this semester, there is a process for withdrawal, and you will not be charged for this semester. Students who enrolled for the first time for Spring 2023 will also get their deposits back if they choose to withdraw.” If Bay State actually keeps this promise, it will be laudable and refreshing for this industry. (See, e.g., ASA College above.)

Mason also says that Bay State will appeal the accreditor’s decision.

UPDATE 01-17-22: Here is a January 16 statement from accreditor NECHE about its decision.

It’s time for the Department of Education to take the necessary steps to stop approving federal aid for all predatory colleges, so we can stop these meltdowns and the crises they create in the lives of hardworking Americans tricked into enrolling in these shady schools. 

UPDATE 01-23-23:

A second U.S. school owned by Ambow, NewSchool of Architecture & Design, located in San Diego, is also in trouble with its accreditor. The Western Association of Schools and Colleges (WASC) in November issued the school a notice of concern, warning it “may not have resources sufficient to ensure long term viability if current trends continue.” WASC plans to address the school’s status at its meeting in February. The Department of Education, meanwhile, has placed the school on restrictive HCM2 financial status.

UPDATE 01-12-23:

— Living Arts College, a Raleigh, North Carolina, for-profit that offered programs in filmmaking, audio production, animation, and video game design, shut down in December, in the wake of the U.S. Department of Education’s de-recognition of accreditor ACICS, which had approved Living Arts’ eligibility for federal student aid. The Department decision, issued in August 2021, gave ACICS-accredited schools eighteen months to find a new accreditor.

In a December 9 letter to Living Arts students and staff, the school  president, Roger Klietz, blamed the Biden administration for the school’s shutdown, writing that the decision to close “is not a decision made by the College. Instead it is an action forced on several schools accredited by ACICS. The Secretary of Education under the Biden administration has issued provisional rules that has made it financially impossible to continue operations.” He further claimed that the Department of Education “has simply not cooperated in responding to our weeks of requesting help for students.”

But Daniel Harrison, vice president for academic and regulatory affairs at the University of North Carolina system, which oversees licensing of non-public colleges in the state, told Triangle Business Journal that Living Arts had not, as of November 2022, applied to any other accreditor. 

Living Arts had 203 enrolled students as of September 2021, according to Department of Education data. Federal student aid accounted for 83 percent of the school’s revenue.

UPDATE 01-13-22:

Living Arts is urging its students to transfer to another troubled, expensive for-profit college, Full Sail University. The group Veterans Education Success this week wrote to the U.S. Department of Veterans Affairs and the North Carolina state veterans agency expressing concern that Living Arts’ communications to students don’t warn them that Full Sail was on warning status with its accreditor, ACCSC, which has cited poor student outcomes at the school. (Full Sail is apparently now off ACCSC’s list of schools on warning status, as of January 11, the day after VES sent its letter.)