The abrupt closure of Westech College in Southern California marks the latest in a string of failed for-profit trade schools – a disappearing act sparking debate over whether there’s a growing training gap for those seeking skilled work.
Westech — with campuses in Fontana, Moreno Valley and Victorville — shut its doors over the weekend because of financial problems, leaving roughly 500 stunned students scrambling to get tuition refunds or to transfer their credits to other schools.
After a period of rapid growth, many for-profit trade schools are struggling with their own financial missteps, changes in federal funding and other problems, which have led to a sharp drop in the number of schools.
Westech’s closure followed the shutdown of other high-profile trade schools such as ITT Technical Institute and Corinthian Colleges Inc.
That’s a problem at a time when widespread closures of retail stores and other businesses are prompting laid-off workers to ponder trade schools to burnish their job skills and reenter the employment market, some analysts said.
“We know retailers are likely to close and many of these people might be open to technical education, which could provide a critical future for them,” said Harley Shaiken, a labor professor at UC Berkeley.
Since the 2009-10 school year, about 960 for-profit trade-school campuses have closed nationwide, leaving about 6,000 in the country, said Steve Gunderson, president of Career Education Colleges and Universities, a trade group for the for-profit college industry.
As a result, enrollment in the schools has plummeted more than 40% to 2.3 million today from just under 4 million, he said.
The schools are closing at the same time “we are looking at a dramatic increase in the need for new skilled workers in this country,” Gunderson said.
“This sector probably grew too fast, too much at the beginning of the [last] recession, but now we face the pendulum extreme on the other side.”
But others discounted the notion that students increasingly can’t find job-training courses because for-profit colleges have closed.
Laurence Frank, president of Los Angeles Trade-Technical College, noted that there are 113 public community colleges in California and that “there is very little that is being taught at these for-profit colleges that are not already being taught by a community college not that far away.”
Los Angeles Trade-Tech has an enrollment of 24,000 and “at this point there’s room for all community colleges to grow,” Frank said.
Westech offered career programs including drafting and design, heating and air conditioning, fitness training, veterinary assistance and medical office administration. The school opened in Pomona in 1988 and later moved its main campus to Fontana.
Westech itself did not provide details of its shutdown on its Facebook or Twitter accounts, and efforts to reach Westech President Barry Malecki were unsuccessful. Calls to the school’s three campuses Tuesday were directed to voicemail and the messages were not returned.
Westech’s website indicated it was business as usual. On the site’s chat feature, a representative had no information about the closure and directed inquiries to the school’s main phone number.
Students showed up for class at Westech’s campuses Monday to find locked doors and a notice saying the school was forced to shut down because of recent financial issues.
“It’s ridiculous. It’s just awful,” said Alex Argueta, 21, of Riverside, who was attending the Moreno Valley campus.
Argueta said he had been working a warehouse job when he decided about a year ago to go back to school. He said he borrowed nearly $10,000 from family to pay the tuition for a computer systems technical program and finished his classwork about three weeks ago, although he still hasn't received his diploma.
On Saturday, he heard rumors that Westech might be closing but figured it was an April Fool's joke. Then, on Sunday, his teacher called to say workers with moving vans appeared to be emptying out the campus. He rushed over and saw them himself.
The California Bureau for Private Postsecondary Education sent representatives to the area Monday to help students obtain transcripts and financial aid documentation, bureau spokeswoman Jennifer Iida said.
To request a loan discharge, students should contact their loan servicers — and if unsure who the servicers are, they should contact the National Student Loan Data System, the bureau said. An application for the Student Tuition Recovery fund is available on the bureau’s website.
Westech College was accredited by the Accrediting Commission of Career Schools and Colleges, which evaluates schools to help the federal government determine eligibility for federal financial-aid programs. Westech’s Fontana campus had been accredited since 1991, Executive Director Michale McComis said.
Westech’s recent financial troubles involve a change in the way the U.S. Education Department let the school access money for students’ financial aid.
Usually, a school can draw down federal funds before disbursing that aid to the students. But in December, the Education Department sent Westech’s president a letter saying the school would have to give out its own money and then apply for reimbursement from the government.
The Education Department made this change as a result of “serious findings of noncompliance … including the failure to pay refunds,” it said in a Dec. 16 letter to Malecki. The letter also cited “complaints that indicate lack of financial and administrative capability” at the school, although it did not give details.
“The issue, as I understood it, was [Westech] just didn’t have the cash to continue operations” after the change, McComis said.
That was not the first time a red flag had been raised about the for-profit trade school.
In 2014, the department conducted a review of Westech to determine its compliance with regulations related to Title IV programs. (Title IV is the section of the Higher Education Act that authorizes the major federal financial aid programs.)
The review found several areas of noncompliance, including a lack of verification of students’ federal financial aid application information, missing or inadequate loan counseling, failure to credit a student’s account with a balance from federal funds paid out, and failure to publish required information about financial assistance.
According to a 2015 letter from the Education Department, though, Westech resolved the issues and did not have to take further action.
Previously, the department had denied the school’s fitness training program from eligibility for federal student aid and cited several findings of noncompliance in a 2013 audit. Both resulted in significant liabilities owed to the government, the Education Department wrote, but Westech made written assurances that it had a satisfactory repayment plan, and the program was reinstated.
The Associated Press contributed to this report.
4:15 p.m., April 4: This article was updated with additional analysis.
5 p.m.: This article was updated with information about interactions between Westech and the Education Department and with comment from Michale McComis.
3:50 p.m.: This article was updated with comments from Alex Argueta.
3:20 p.m.: This article was updated with information from the California Bureau of Private Postsecondary Education’s email to students.
2 p.m.: This article was updated with details from Westech’s Moreno Valley campus.
1:30 p.m.: This article was updated with information about workshops given by the California Bureau of Private Postsecondary Education.
This article was originally published at 12:25 p.m. on April 3.