Business College Closes 3 Campuses

The United College of Business has closed its campuses here, in Hollywood and Pico Rivera because of financial problems that will force it into bankruptcy, officials said earlier this week.

The business school, which had about 1,000 students at the three sites, was closed last Thursday after a state agency barred it from teaching students who receive federally guaranteed loans.

The California Student Aid Commission took that action because the college has had too many defaults on student loans, commission spokesman Dan Parker said. The defaulted loans have totaled about $10 million in the last 10 years, Parker said.

College President Alan D. Mentzer wrote in a memo to faculty and students that the action would deprive the school of money it desperately needed to survive.

“Unfortunately, we do not have the financial resources at the present time to stay open without this tuition,” Mentzer said.

Faculty and students said they were caught off guard last week by memos informing them that the college would be closed after offering computer, secretarial and other business-related classes for the past 21 years.

Mentzer, who could not be reached for comment, advised faculty members that they would not receive their paychecks for work performed since Aug. 16 until arrangements could be made through U.S. Bankruptcy Court. Students were advised to call the state Department of Education for help in finding other schools to continue their education.

“We have been teaching free since Aug. 16 unbeknown to us,” said Larry Halford, who taught English as a second language at the college’s Hollywood campus. “There was no indication that there was not a viable business there. They were even remodeling classrooms.”

Former student Charlotte Bolt, 38, of Norwalk, finished her computer course Aug. 31 and had gone earlier this week to the closed Downey campus in an unsuccessful effort to obtain her records. College officials had not contacted her about the closure; she found out through a local newspaper report.

“I’m annoyed,” Bolt said. “I don’t know if they’re going to get in contact with people who have finished.”

Valerie Marsh, 18, of Hawthorne was surprised when she arrived at the Downey campus for what was to be her first day of secretarial school.

“Oh! really,” she said when told of the closure.

The state Department of Education is overseeing the closure to ensure that students will be able to continue their studies at other business colleges or recover their tuition, said Roy Steeves, assistant director of private post-secondary education.

Tuition ranged from $6,000 to $12,000 for a complete business course, Steeves said.

Steeves said state education officials need to review college records to determine how many students are affected.

Mentzer told state officials that the college would declare bankruptcy and begin liquidating its assets, Steeves said.

As of last January, federal law has required that action be taken against schools that have had many students default on government-guaranteed loans.

Parker of the California Student Aid Commission, which administers about 90% of the federally guaranteed student loans in the state, said the United College of Business was declared ineligible to serve students with Supplemental Loans for Students. The interest rate for those loans is 11.49%.

The default rate for the college was 58.3% in 1987, the last year for which such figures are available, a federal education official said.

Meanwhile, Downey officials greeted the closure with mixed emotions.

The college had been engaged in a battle with Downey for many years over an expansion plan that would have enabled it to enroll 450 students, up from the 250 permitted at the time the campus was closed. The college was in the Civic Center area, where streets can become congested with traffic and parking spots are sometimes difficult to find.

“I feel sorry for the students,” Mayor Roy L. Paul said. “But if (college officials) had gotten their way, it would have overburdened the whole area.”

College officials first sued Downey in state and federal courts in 1987, alleging that the city denied the expansion because the college has a predominantly minority student body--25% black, 40% Latino and 5% Asian.

City officials denied the allegation, saying the expansion was denied because of traffic and parking problems.

Those initial lawsuits were dropped after city and college officials worked to negotiate an expansion, said lawyer Christian E. Markey III, who represents the college.

But in the end, the council again denied the college’s expansion plans, and the college filed another lawsuit in Superior Court. The lawsuit sought a court order requiring the council to reconsider the expansion plan.

Last November, Superior Court Judge Dzintra Janavs found that there was no evidence to support the city’s contention that increased enrollment at the college would adversely affect the surrounding area and nearby businesses. The judge ordered the council to reconsider the college’s expansion plans.

The city’s appeal of that ruling is pending.

Markey declined to comment on whether the college would follow through with the lawsuit.