Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, July 24, 1993 TAG: 9307290448
SECTION: VIRGINIA PAGE: C-2 EDITION: METRO
SOURCE: LESLIE TAYLOR STAFF WRITER
DATELINE: LENGTH: Medium
Two employees, who asked not to be named, said seven employees - including the vice president of operations, his secretary and five marketing department employees - were laid off.
Frank Longaker, National Business College president, said Friday that the vice president and secretary were laid off temporarily for reasons he could not disclose. He would not say how long their layoffs would last.
The marketing department employees were laid off for "efficiency reasons," Longaker said.
"We're going to more free-lancing," he said. "It seems like the best way to go."
Longaker said he did not expect any more layoffs.
The employees who spoke to the Roanoke Times & World-News - two of 12 people employed in administration, marketing, admissions and operations departments - said they were told the layoffs were part of efforts to cut costs.
"We were told that we were tightening up on spending, trying to cut costs wherever we could," one employee said.
Some of the cost cutting was linked to a change in a decades-old federal consumer rule, they said.
"We were told there was some change made so students would have a harder time getting loan money," one employee said.
The change the employee referred to was in the Federal Trade Commission's "holder rule." The rule states that if a person buys a faulty product and has taken out a bank loan to purchase the product, the holder of the note - the bank - can be held liable.
This year, the FTC made the rule applicable to student loans. The Department of Education chose to apply the rule only to for-profit - or "proprietary" - schools like National Business College.
"If I'm a student and I didn't like the grade I got, or if I didn't like the teacher, I've got legal recourse," said Tony Calandro, a vice president with the Career College Association in Washington. "If I'm a banker, why would I want to take the risk?"
The rule could eliminate a major source of funding for students of proprietary schools, Calandro said.
"That's also an economic hit on the institution," he said. Calandro said he was told that in one state, as soon as the new student loan applications containing the required statement about the holder rule come out, that all banks in that state would stop servicing proprietary schools.
Longaker said the rule change had nothing to do with any personnel changes at the college.
"It's not been a concern to me," he said.
National Business College, headquartered in Salem, employs 350 people on campuses in Salem, Charlottesville, Danville, Harrisonburg, Lynchburg, Martinsville and Bluefield, W.Va. The college has expanded from an enrollment of 115 in 1975 to 1,500 today.
by CNB