- The owner of Vista College, a chain of for-profit schools, filed for Chapter 7 bankruptcy protection Monday after last week suddenly shuttering campuses and saying it would close down operations.
- In a letter to students, Vista College said it was "unable to continue due to financial circumstances." It said it was still in compliance with accreditation standards and state and federal regulations.
- The college shut down before the beginning of a new term on Monday and while a term for nursing students was underway, according to a local media report. "We apologize for the sudden notice but due to unforeseen events we could not continue with the new term," the letter stated.
Vista College has several campuses in Texas, as well as sites in New Mexico and Arkansas. Its programs span healthcare, business, information technology and criminal justice.
The chain's sudden closure blindsided students, according to local media reports. Some are unsure where they can finish their degrees or weren't given the opportunity to complete their certification exams — even though the school promised to pay the fees for those tests.
The school's closure marks the latest for-profit college to shut down without much warning. In late 2018 and early 2019, three major for-profit chains shuttered nearly overnight, leaving tens of thousands of students scrambling to adjust their college plans.
It also comes as the Biden administration prepares to crack down on the for-profit sector. Last week, the Federal Trade Commission warned 70 of the largest for-profit colleges they would face hefty fines if they made misleading claims. The FTC did not accuse the schools of wrongdoing.
The U.S. Department of Education also recently reestablished an enforcement office within the Federal Student Aid division to strengthen oversight of all colleges receiving federal student aid.
Education Futures Group, Vista College's owner, has assets worth between $1 million and $10 million and liabilities totaling $50,000 or less, according to court documents. It estimates it has between 200 and 999 creditors.
Prospect Partners, a private equity firm, owns a majority stake in the company, while Vista College CEO and founder Jim Tolbert owns the remaining 16.7%.
Tolbert told a local media outlet in early August that the school decided to suspend enrollment after seeing large decreases. "The reason we did that is to make sure we had all the financial resources at our disposal to make sure the students currently enrolled in school get exactly what they paid for," Tolbert told KBTX.
The school's enrollment steadily fell over the past few years, from a high of 4,701 students in 2016 to 2,945 in 2020, according to federal data. Vista College's online business also saw wavering headcounts over that period, with 574 students enrolled last fall.
Vista College notified students in the letter announcing the closure that they may be eligible for closed-school loan discharges, which forgive federal student loan debt for students whose schools closed either while they were enrolled or shortly after they withdrew.
Education Futures Group and the Education Department did not immediately answer Higher Ed Dive's questions emailed Tuesday.