This For-Profit College Chain Is Leaving Students With Lots of Debt and No Degrees

The Education Corporation of America, one of the largest for-profit college chains, announced last week it was immediately closing more than 70 campuses in 21 states. Between fifteen and twenty thousand students are now in the unenviable position of being thousands of dollars in debt with no completed degrees or certifications and, reportedly, little prospect of being able to transfer their academic credits to different schools.

NBC reports that in some instances, students were told in the middle of class — some of them while in the middle of their certification exams — that their school no longer exists. Their student debt, however, sure does.

The Washington Monthly is familiar with The Education Corporation of America (ECA). Our 13th annual College Guide and Rankings included the first-ever rankings of colleges for vocational certificates. Vocational certifications–which typically take a year or so to complete–help students attain the skills to work in particular fields, including as a dental assistant, a welder, or an auto mechanic. These kinds of certifications are one of the most effective ways to help people in under-served communities find good-paying work, and eventually become part of the middle class. The number of such certificates awarded has been climbing for years, from roughly 566,000 in 1998–99 to roughly 1.06 million in 2013–14.

In our rankings, we used data from the U.S. Department of Education’s “gainful employment” database, released in the Obama administration’s final weeks, to compare vocational programs across metrics like the median earnings of their students three years after graduation, median debt-to-earnings ratios, annual debt payments, and estimated total debt. At least two ECA campuses showed up in our lists of worst colleges for vocational certificates, including in the HVAC, medical clinical assistant certifications, and pharmacy technician categories. The ECA campuses we examined consistently saddled its students with high amounts of debt, and its graduates reported earnings that were significantly lower than their peers who received similar certificates elsewhere.

But it’s not like ECA’s near-criminal mediocrity wasn’t already widely known by policy makers and regulators. ECA is accredited by the Accrediting Council for Independent Colleges and Schools (ACICS), which was “de-recognized” by the Obama administration two years ago. (The ACICS fought the de-recognition in the courts and won this year.) In 2015, Inside Higher Ed reported that ACSIS was the “gatekeeper to $4.76 billion in 2015 federal aid payments to more than 245 career-oriented colleges, most of them for-profit institutions.”

In justifying the decision, the Obama administration pointed to ACICS’s “pervasive compliance problems,” while advocates decried the agency’s lax oversight of several failed and deeply flawed for-profits, including Corinthian Colleges and FastTrain College. Ted Mitchell, then under secretary of education, cited “such wide and deep failure that they simply cannot be entrusted with making the determinations we, you and the public count on.”

Controversy continues for ACICS. For example, a Danish newspaper last month reported that a business school of questionable academic quality was using its accreditation from ACICS to “circumvent” the laws of that country.

What stank of rotting corruption two years ago smells just divine to today’s administration. Last month, Education Secretary Betsy DeVos revived the ACICS. But the ACICS and the Trump administration knew that ECA was heading nowhere good–and fast. NBC reports that the Department of Education “had been working with the company to arrange a shut-down that gave students time to transfer.” The agency criticized ECA’s decision to close immediately and said it was working to help students transfer elsewhere.

The ACICS had sanctioned ECA in September “over its concerns, including institutional management and employer satisfaction … [and] student progress and staff turnover.” The ACICS began to press ECA for a teach-out plan, but the accreditation agency appeared to not pursue it with the urgency needed. Antoinette Flores, associate director of post-secondary education at the Center for American Progress, told Inside Higher Ed that ACICS had enough time and warning to make sure a process was in place for ECA’s students and likewise the Department of Education had enough warning to hold ACICS accountable.

Instead, it appears Betsy DeVos’s department was more concerned with restoring an accreditor that serves for-profit colleges than making sure that the accreditor accomplished its oversight job.

Joshua Alvarez

Joshua Alvarez is a contributor to the Washington Monthly's Political Animal. He edits syndicated opinion columns at the Washington Post, and can be reached at joshuaalvarezmail@gmail.com.