Trade School Stops Accepting New Students

United Education & Software, an Encino-based trade school operator, said Monday that it has stopped accepting new students for its National Technical Schools’ home-study program and laid off 170 of the school’s 196 workers.

UES said it took the actions because banks are refusing to provide loans to new students at the school. The banks have stopped making the loans because National Technical Schools’ program has come under severe state and federal criticism. The roughly 6,000 students already enrolled won’t be affected, it said.

National Technical Schools, a Los Angeles home-study computer school, was the subject of an audit released by the U.S. Department of Education in October, which found that the courses offered by the school did not meet federal standards.

California Atty. Gen. John K. Van de Kamp earlier this month slapped UES with a $24-million lawsuit, alleging that National Technical Schools misled its students and provided poor education. It also alleged that the school falsely claimed that graduates would qualify for entry level computer jobs, that student loans would not have to be repaid until graduates obtained jobs and that the dropout rate was far lower than the actual dropout rate of 91%.

Also as a result of the federal audit, the California Student Aid Commission, a state agency that administers the federal student-loan program, said it would stop guaranteeing new loans to students of National Technical Schools. However, a federal court in Los Angeles ruled that the commission could not stop guaranteeing loans to students enrolling in the school until a hearing is held.

UES, which owns 25 other trade schools, has sued four officials of the Student Aid Commission, alleging that they made false statements to bank executives to induce the banks to stop making loans to National Technical Schools students.

About 95% of National Technical Schools’ students enroll under the government-guaranteed student loan program, which provides about $1.2 million a month in tuition revenues to the school, UES said.