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Career Colleges of America: Tough Lessons

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Congresswoman Janice Hahn looked into our camera and said she knew when she first heard about the failure of Career Colleges of America the situation was "tragic and criminal!"

At the very least it clearly has created confusion in the minds of hundreds of students trying to enrich their minds. They took federal loans for as much as $30,000 to have courses in such trades as drug and alcohol counseling and how to be a surgical technician. This is a three-campus college that boasts of being in business since 1988. It has had media ads and a fancy website. In the end, however, CCA's owners have been unable to explain why they had to close the for-profit college.

Our investigation shows that the Department of Education had given the school what's called a HCM sanction. That stands for Heightened Cash Monitoring. DOE's Jane Glickman says that happens a lot to different schools. CCA being put on HCM signaled problems for ACCET.  The Accrediting Council for Continuing Education (ACCET) is the accrediting agency for trade schools like CCA. The agency sent a  "show cause" letter asking the owners of CCA to explain why it should continue to be accredited when it's facing financial problems. Here is a link to the publicly displayed letter.

The letter points to a requirement for the school to come up with a "teach-out" plan for the 800 students that could be harmed by a closure of the facility. A teach-out plan is when another school takes over the classes and finishes the teaching of the coursework.  From all of those I've spoken with these are difficult to create because different schools have different curriculum.

At about the same time as the "show cause" letter, dated December 20, 2013, students and teachers started getting nervous. Instructor Anthony Romo got his last paycheck at the end of November and hasn't seen another one since. Same goes for other teachers I have spoken with personally. Romo and others say they continued to teach without pay because of the students. Students, getting no answers from administrators, went to the media because they didn't know where else to go. They had much at stake. Their future aside, many had taken federal loans for as much as $30,000 to attend CCA.

Fast forward to January 24, 2014.  In a park in South Gate several dozen students are getting advice from legal staffers of Legal Aid Foundation Los Angeles (LAFLA). Students were offered forms to fill out that are intended to get their federal loans discharged and help in any other reimbursement that may be necessary.  It's the taxpayers that will take the hit for that. Glickman says DOE will likely pursue getting money back from CCA, but many we've spoken with agree it can be difficult in this type of situation. That aside, Robyn Smith with LAFLA says students have rights which can include discharging of loans. Here is a link to information on that from the DOE website.

Jeff Meisel, one of the owners of CCA, returned one of our many calls Wednesday night. He told me he's working with the regulatory agencies and students to find a resolution. He hopes to get students placed at other schools, but that's not easy.

In our conversation he told me he has been able to place some students in other schools and get diplomas and transcripts out as fast as possible. But, that's takes time and there are a lot of students calling.

What happened? Meisel says the company had financial problems. And, as of this point, it's not clear if his Career Colleges of America will be able to reimburse students or the Federal Government.

Here are websites that can provide helpful information in the event of a trade school closure:

Bureau of Private Post secondary Education: http://www.bppe.ca.gov/

Guide for Students Facing a School Closure: www.bppe.ca.gov/students/guide.shtml

Career Colleges of America (CCA)UPDATE from BPPE: http://www.bppe.ca.gov/students/guide_update.pdf

CCA UPDATE on Student Records: http://www.bppe.ca.gov/students/guide_update_student.pdf

CCA UPDATE on Closure: http://www.bppe.ca.gov/students/guide_closure.pdf

Student Loan Borrower Assistance: http://www.studentloanborrowerassistance.org/

Legal Aid Foundation of Los Angeles: http://www.lafla.org/

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