The Importance of Knowing Your School’s Financial Security

Guest blogger, Chris Birk, a principal at SuretyBonds.com, is a former newspaper and magazine writer and college professor. His work has appeared in more than two dozen newspapers and magazines, including the Chicago Sun-Times, the St. Louis Post-Dispatch and Insurance Journal.
Students preparing for a post-secondary education or career have a lengthy checklist to pore over before making a decision. Amid the excitement, students and parents can easily forget to take a long look at the background and financial standing of a potential school. And that can wind up costing them thousands in lost tuition dollars.
In the last few months, several private vocational and technical schools have closed suddenly, taking millions in pre-paid tuition costs with them. Most states have minimal safeguards in place, but the reality is that many consumers will struggle to recover their money.
The abrupt closure of ComputerTraining.edu and Mile High Medical Academy shows why it’s incredibly important for students and parents to know the financial background of a potential school and what safeguards, if any, are in place in the event it folds.
Computer Training Closes
Maryland-based ComputerTraining.edu operated 25 campuses across the country, providing computer training classes for student seeking IT careers. The school closed without warning on Christmas Eve. About 150 students in Pennsylvania had already spent $2 million in pre-paid tuition. The Pennsylvania Attorney General has filed a lawsuit against the company and hopes to obtain full refunds for all students.
Mile High Medical Academy
A similar nightmare unfolded in late December for students in Denver. Their private medical career training school, Mile High Medical Academy, was closed suddenly by state officials who discovered that a school administrator had felony fraud convictions in other jurisdictions. It’s unclear whether the school will reopen and what will happen to students who had already invested significant time and money.
The Lessons
These recent examples illustrate why it’s important for prospective students to investigate the schools they’re considering. Do some Internet searches. Check court records and see if the Better Business Bureau has anything on file.
Students can also contact their state Department of Education or Attorney General’s office to learn more about their current or prospective schools. Make sure the institution is properly licensed and bonded. Ask administrators about their financial standing and what safeguards are in place in the unlikely event the unthinkable happens.