No State-Backed Loans for Mail-Study School
A Los Angeles study-by-mail school where auditors found that students borrow $1 million a month but only 3% graduate was banned Monday from the state’s guaranteed student loan program.
National Technical Schools, which offers a correspondence course in personal computers, is no longer eligible to receive student loans guaranteed by the California Student Aid Commission, said Samuel Kipp III, the commission’s executive director.
The correspondence school suffered a second blow Monday when the Higher Education Assistance Foundation, a Minnesota private nonprofit foundation that guaranteed more than $20 million in loans to students at NTS, decided to temporarily stop backing new loans to the school’s students.
The state commission and foundation removed NTS from the program after reviewing a federal audit that showed that the correspondence school’s “Compulit” courses--conducted between August, 1987, and November, 1988--were too short to meet federal standards and that most NTS students did not complete their studies.
A spokesman for United Education & Software Inc., which operates NTS as part of a chain of trade schools, said the audit was flawed and criticized the commission for announcing the decision before notifying the school.
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