Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, December 15, 1993 TAG: 9312150155
SECTION: VIRGINIA PAGE: C-4 EDITION: METRO
SOURCE: LESLIE TAYLOR STAFF WRITER
DATELINE: LENGTH: Medium
The Virginia Student Assistance Authorities issued a 30-day emergency suspension against the Career Training Center, effective last Thursday. The school has campuses in Roanoke, Lynchburg and Richmond.
The action followed a similar suspension imposed against the school days earlier by the state Department of Education, said Sherrye Ward, deputy executive director of the agency. Ward was unsure what prompted the department's action. Department officials were not available for comment.
But Robert McGinty, president of Career Training Center, said Tuesday he was informed that the department had received complaints about the school that may have raised questions about its financial stability.
"We have had some problems because of cash flow - more expenses than we expected," he said. "But we're working with the state department as far as how to handle the affairs."
McGinty acknowledged that the school's financial condition was linked to its high student loan default rate - 57.7 percent in 1991, the most recent statistics reported by the U.S. Department of Education.
"The high default rate made it difficult for us to get student loans," McGinty said. "Of course, that means we lost some of our financings and the ability of the school to meet financial obligations."
In August, the U.S. Department of Education listed the Career Training Center among colleges and trade schools at risk of losing their participation in the federal student loan program because of high student default rates.
The school was listed as subject to possible limitation, suspension or cutoff from all federal aid programs.
Under the 30-day suspension, the student assistance agency will not guarantee additional loans and has notified lenders to cease loan disbursements to the school, Ward said.
Ward said that once the emergency suspension is lifted, the agency either can limit the school's participation in student loan programs, terminate the school's participation permanently or let the school participate again.
McGinty said the school is revamping its operations to make it function more effectively. McGinty said he expects the reorganization to be completed before students return after the holiday break.
The school, founded 10 years ago, trains young adults in vocational skills and assists them in finding jobs, McGinty said. Training is conducted in five- to 18-month sessions.
Donna Barrette, director of the Career Training Center campus in Roanoke, said she has informed students that the school is closing early for the holiday break - Thursday - and will reopen Jan. 10.
by CNB