Computer Learning Centers suspended classes at its 25 campuses on Monday, after the company took successive hits from the U.S. Education Department and a lender that left it without enough money to operate.
The chain of computer and technical schools, based in Manassas, Va., said last week that it hoped to find a buyer. However, the company said Monday that its efforts have been unsuccessful so far, and that its board was exploring other alternatives, including bankruptcy.
“The critical thing at this point is that we find a way to protect the students,” said Michael Goldstein, a lawyer who represents the company.
Computer Learning Centers, which has some 9,500 students, announced the suspension of classes on its Web site and on recorded telephone messages at the company’s corporate headquarters and individual campuses.
In December, the Education Department ordered Computer Learning Centers to repay $187-million in federal funds for allegedly violating financial-aid regulations by paying members of its admissions staff based on how many students they enrolled. Making such payments is illegal under the Higher Education Act. And this month, the department told the company that it would either have to post an irrevocable letter of credit or wait to be reimbursed for the federal aid awarded to its students. Its lender subsequently informed the company that it was in default and that its checks could no longer be cashed.
Officials with the Education Department are visiting Computer Learning Centers sites throughout the country. “We’ve gotten well over 100 calls today from students who are concerned,” said Stephanie Babyak, a department spokeswoman. She added that department officials are working with state licensing agencies and with each of the company’s campuses to determine whether students could benefit from “teach outs,” in which they would be able to complete their degrees at neighboring institutions. If not, the students may be eligible for loan discharges. The department provides general information on loan discharges on its Web site.
Background articles from The Chronicle: