For-profit operator to shut down all schools
Education Corporation of America, owner of a national chain of for-profit schools, including Virginia College and Brightwood College in Maryland, is ending operations this week in the face of dwindling enrollment and regulatory pressures.
“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,” Diane Worthington, a spokeswoman for Education Corp., said in a statement Wednesday.
The abrupt closure left some 20,000 students at more than 75 campuses scrambling to complete their education once the current term ended Friday. Worthington said the company, known by its acronym, ECA, will ensure students can access their transcripts to transfer to another school.
On its website, ECA promises students it will provide information within two weeks about transcript requests and transfer recommendations. The haphazard planning has drawn the ire of the Education Department, which has been in talks with the company to create a transition plan for students, according to department spokeswoman Liz Hill.
“Instead of taking the next few months to close in an orderly fashion, ECA took the easy way out,” Hill said.
She said the Education Department will work with students to transfer their credits to new institutions or apply for federal student loan forgiveness under what’s known as a closed-school discharge. Students will be ineligible for the discharge, though, if they transfer credits to complete the same degree at another institution.
For-profit college industry leaders also expressed disappointment with ECA’s decision to close its schools without warning.
“We understand business decisions. But, sudden closures are the worst moments for our sector because they provide no time for students to transfer and no time for staff to prepare,” said Steve Gunderson, president of the industry advocacy group Career Education Colleges and Universities. “Thoughtful planning and communications can avoid such challenges.”
In Virginia and Maryland, ECA ran a Virginia College location in Richmond, and Brightwood College had campuses in Towson, Beltsville and Baltimore. Maryland Attorney General Brian E. Frosh bemoaned the impact on students and called on the Education Department to rein in forprofit colleges.
“The closure of Brightwood College’s three Maryland campuses is distressing and saddening because of the harmful effect this has on hundreds of Maryland students,” Frosh said in a statement Thursday. “The continuing harm to students of for-profit colleges shows the need for the U.S. Department of Education to change course and start protecting students.”
ECA is the largest for-profit chain to shutter during the Trump administration. Despite Education Secretary Betsy DeVos’s rollback of Obama-era regulations aimed at for-profit colleges, the industry continues to grapple with low enrollment.
Problems at ECA had been brewing for some time. Its marquee brand, Virginia College, has witnessed a steady decline in enrollment. Steve McClearn, who serves as both chief marketing and chief academic officer, said last month that a stronger job market had helped shrink the pool of applicants.
Marketing the school, he said, was also difficult after the Obama administration stripped its accreditor — the Accrediting Council for Independent Colleges and Schools — of the power to participate in the federal student aid program. That move left Virginia College and other for-profit schools searching for a new accreditation agency to retain access to federal student loans and grants, a critical source of revenue.
Virginia College had trouble finding a new accreditor. The school applied to the Accrediting Council for Continuing Education and Training, and it was rejected in a 59-page letter that detailed “weaknesses” across campuses and at the corporate office.
In September, ECA said it would close 16 of 33 Virginia College campuses. A month later, the parent company disclosed in court documents that it was on the brink of insolvency, saddled with lawsuits and under threat of eviction.