Marinello closes all of its 56 beauty- school campuses
Move comes after it’s accused of misallocating U. S. student aid funds.
Marinello Schools of Beauty abruptly shut down, closing all 56 of its campuses, including 39 in California, after the U. S. Department of Education said the for- profit cosmetology school was improperly allocating federal student aid money.
The Department of Education said earlier this week that it would stop providing federal aid to 21 Marinello campuses in California and two in Nevada after it found that the school was knowingly requesting aid for students without valid high school diplomas, under-awarding some student funds, charging fees to students who took too long to f inish their programs and committing “other acts of misrepresentation.”
Marinello failed to follow through on promised training in cosmetology and barbering, the department said in a 10- page letter describing the reasons it had decided to stop providing aid. Department staffers spoke with students “who supposedly ‘ graduated’ yet were unable to cut hair,” it said.
Students also said they were not provided with equipment and supplies necessary to complete their studies, despite paying up to $ 2,700 for such materials.
The department also found that Marinello enrolled students after steering them into a fabricated high school diploma program. Students said they received small workbooks or packets to complete on their own. Many told the department that they were allowed to look up answers to test questions or to repeat exams until they passed. Fourteen of the campuses involved in the investigation were in the Los Angeles area.
Marinello is owned by B& H Education Inc., a Beverly Hills company. Marinello and B& H did not respond to phone calls or an email seeking comment.
In 2014- 15, Marinello received more than $ 87 million in Pell Grants and federal loans, according to the Department of Education. The school, founded in 1905, reported that it had 4,329 students enrolled as of Jan. 7.
The department said Marinello could submit evidence to dispute the f indings by Feb. 16 and potentially continue to receive federal financial aid.
Marinello shut down instead, closing its California, Nevada and Utah campuses Thursday and its Connecticut and Kansas locations Friday.
In a letter to students posted on its website, Marinello said it was arranging partnerships with other schools so students could complete their studies. It said it would host meetings next week to give out transcripts and discuss transfers. “We did everything in our power to avoid this unfortunate conclusion,” Marinello Chief Executive Rashed Elyas said in the letter. “Unfortunately, the Department of Education’s unprecedented and unfounded actions left us with no other option except to close our schools.”
Sara Moore, 21, graduated in December from a cosmetology program at a Marinello campus in Connecticut. She said that for months, she’d heard rumors the school would shut down.
“It was no surprise,” she wrote to a Times reporter. “My campus had no director, f inancial aid representative and no admissions instructor from November on.”
After graduation, she said, she received letters from Marinello saying that she owed $ 800. Moore said she tried to call the corporate office to explain that her payments were taken care of through f inancial aid, but later got another letter saying she owed $ 3,000. The Grove, Ohio, resident said she works as a waitress because Marinello will not release her records to allow her to get her cosmetology license until she pays the charges.
The Obama administration has been scrutinizing for- profit colleges since 2009, amid evidence that many schools were saddling students with massive debts they couldn’t repay. The industry soared during the Great Recession as schools marketed heavily to growing ranks of unemployed workers seeking new skills.
But the rapid growth at- tracted the attention of federal and state authorities, who noted poor graduation rates and ballooning student loan defaults at many of the schools. For- profit colleges on average charge more than four times as much as community colleges, according to the College Board, and they cost significantly more than the in- state tuition at public four- year colleges.
Last year, the Department of Education instituted new rules that would cut off federal funding to programs that consistently leave students with large debts compared with their incomes. A department investigation into falsified jobplacement rates at Corinthian Colleges led the company into bankruptcy last year. Other major for- profit college chains, including ITT Educational Services and DeVry Education Group, face lawsuits from federal agencies claiming they misled students.
Jennifer Wang, who heads the Washington office of the Institute for College Access and Success, praised the department for its investigation of Marinello, but said students need better information about their options regarding student loans. If a school abruptly closes, students are eligible to have their federal loans erased, she said. Marinello’s letter to students doesn’t mention that.