Virginia College, Jacksonville, at Beach and University boulevards, has closed along with the company’s other facilities nationwide.
The private college offered courses and associate’s degrees in business administration, computer technology, cosmetology, culinary arts, electrical technology and health and medical training.
While the loss of jobs is disconcerting, it demonstrates the strength of the private for-profit educational institution.
On its own web site the company says: “Virginia College offers the education and training demanded by a competitive job market.”
But it was the competitive free market that voted VC down. Although it was one of the largest for-profit college companies in the nation, it could not attract enough students to support the venture.
Unlike the public sector, where an institution that is not performing never shuts down, the private sector demands performance and either rewards or punishes for its presence.
Obviously, something was wrong with VC’s business model or other factors made it unable to operate as envisioned.
The Education Corporation of America is the parent company. ECA owns more than 75 campuses and enrolls about 20,000 students.
The company had closed about a third of its campuses in an effort to turn around its troubled finances and attempted a corporate overhaul through a court-approved receivership.
Virginia College, Jacksonville had been placed on institutional show caused by the Accrediting Council for Independent Colleges and Schools because of “the final adverse action taken by another recognized accrediting agency and for financial concerns,” the college had said.
ECA also told employees that it would complete current course modules over the next two weeks and a skeleton crew of employees will remain on campuses to assist students with obtaining documentation on their programs, according to Inside Higher Ed.
Barack Obama, who hated free enterprise, used his administration to crack down on for-profit education companies during his disastrous term in office. Even though the Trump administration has been trying to reduce the impact, the government’s heavy hand may have been a factor in the demise of ECA.
The real problem with the private education companies may have a lot to do with the government running the student loan program. It controls the money.
A former employee who did not want to be identified and worked at VC for several years, said one of the significant regulations that led to for-profits declining/closing is the gainful employment regulation, which became effective in 2015. “Essentially, the colleges had to demonstrate that “students could obtain employment with wages high enough to allow them to successfully repay that debt” – many of the students at for profits could not meet this because the tuition there was much higher,” she said.
A lot the private schools also began shutting down certain programs over the years, either due to the gainful employment rule or because the students were not passing their program’s licensing certifications. This was why the Jacksonville location had to close nursing and surgical technology programs a few years ago – students weren’t passing the RN examinations or the surgical tech certification at a high enough rate. That impacted some of their enrollment numbers.
In typical fashion the private schools were yanked around by the regulators. Many of these schools were accredited by Accrediting Council for Independent Schools and Colleges (ACICS) until 2016, when the Department of Ed de-recognized them as an accrediting body, she said.
Colleges were given an 18-month window to find new accreditation but in April of this year, DeVos restored ACICS’s accrediting status. It was either too late for ECA or the continued uncertainty made it impossible to plan.
Students pay the price when the government manhandles private companies out of fear of competition.