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Slow-motion collapse of for-profit colleges shows grass may not be greener over there

Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Can I get rid of student loans by declaring bankruptcy?”

 

For-profit colleges and universities have aggressively sought to brand themselves as hip alternatives to traditional institutions of higher learning, with a range of television and other advertisements featuring young people breaking away from the pack and pursuing their own dreams.

College graduate Charlotte Debt Lawyer North Carolina Bankruptcy AttorneyAt least 264 of those dreams shattered last week when Anthem College shut down its Beaverton, Oregon campus. The Beaverton location was just one of many campuses shuttered after Anthem’s Florida-based parent company—Education Training Corp.—declared Chapter 11 bankruptcy.

The closure of Anthem campuses hurts more than students, said Chris Ebersole of SkanlanKemperBard Companies, Anthem’s landlord at The Round office and retail complex in Beaverton, where Anthem leased 30,000 square feet of space. The college did not pay its August rent, Ebersole said, and his company will likely be looking for a new tenant.

Anthem’s Beaverton branch offered one-year programs to train medical and dental assistants, medical records clerks and massage therapists. Tuition and fees for the programs cost students $15,000 or more. For-profit colleges have been criticized for aggressively recruiting students who are required to pay expensive tuitions for low-quality educational offerings.

Anthem and other for-profit schools have seen a steep decline in enrollment—in the case of Anthem down to 10,000 students from a peak of 22,000. Many students cannot afford the tuition themselves, so they take out loans dispensed by the United States Department of Education.

In July, the Department of Education placed a hold on Santa Ana, California-based Corinthian College’s access to federal student aid after the college failed to provide “extensive data and documentation to justify the company’s job placement rates.”

Corinthian operated schools under the Everest College, WyoTech and Heald brand names. After announcing that it would sell 85 of its 107 campuses and online programs, Corinthian revealed last month that the company had received a grand jury subpoena from the United States Attorney’s office in Los Angeles.

It is just the latest investigation into Corinthian’s business practices. The college has been accused of falsifying job placement rates and student attendance records in an effort to retain access to federal student loans and grants. In 2013, Corinthian derived 85-percent of its revenue from federal loans and grants, so the hold on loan and grant money placed the college on the brink of collapse.

Kent Jenkins, a spokesman for Corinthian, said the company would “vigorously defend its policies, practices and track record of serving students effectively.”

Back in Beaverton, Anthem students have been left in a lurch, concerned that they will be asked to repay loans they took out for classes they never received. Borrowers can get loans cancelled if the schools they are attending shut down while they are enrolled or within 90 days after enrollment.

If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with the best advice for your particular situation.

 

 

About the Author

Bryan 1Bryan Stone is a Partner with Arnold & Smith, PLLC, where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.

A native of Macon, Georgia, Mr. Stone attended the University of Georgia, where he earned a BBA in Banking and Finance, and Wake Forest University School of Law, where he obtained his law degree.

Following law school, Mr. Stone relocated to Charlotte, where he currently serves as Chair of “Bravo!” – a young professionals organization associated with Opera Carolina – and founded the University of Georgia Alumni Association of Charlotte.

In his spare time, Mr. Stone enjoys perfecting his barbeque skills for the annual “Q-City BBQ Championship” and playing softball in the Mecklenburg County Bar softball league.

 

 

Sources:

http://www.oregonlive.com/education/index.ssf/2014/09/anthem_shutters_campuses_in_be.html

http://www.latimes.com/business/la-fi-corinthian-colleges-20140814-story.html

 

 

Image Credit:

http://upload.wikimedia.org/wikipedia/commons/5/50/Graduation_Girl.jpg

 

 

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