Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, January 7, 1994 TAG: 9401070188
SECTION: VIRGINIA PAGE: B4 EDITION: METRO
SOURCE: LESLIE TAYLOR STAFF WRITER
DATELINE: LENGTH: Medium
Carol Buchanan, an associate specialist with the Virginia Department of Education who oversees proprietary schools, said Thursday that she had been told the school is negotiating a sale.
"I have been told that apparently there is a buyer for the corporation," Buchanan said. The school has campuses in Roanoke, Richmond and Lynchburg.
Should the deal fall through, "then the campuses will close," Buchanan said.
Robert McGinty, school president, could not be reached for comment Thursday. Phones were not answered at any of the campuses. Doors of the Roanoke campus on Brandon Avenue were locked. An eviction notice was posted on the locked doors of the school's Lynchburg campus.
Employees began receiving layoff notices this week from McGinty. The notices were dated Dec. 31.
"It is with deepest regret that I must inform you that I find it necessary to lay off our employees," McGinty wrote. "We are presently planning on reopening on Jan. 10, 1994. As of Dec. 31, 1993, all insurance coverage provided by Career Training Center, Inc. will terminate. This includes medical, dental, and life and disability."
The three campuses had been closed for much of December for a holiday break. The break coincided with a 30-day suspension imposed last month by the Department of Education, during which school administrators were to restructure the school's financial plan.
Employees had expected the school to reopen after the break, jobs intact. The layoff "came as a complete surprise to all of us," said one employee, who asked not to be named.
"It's a real mess. I hate this for the students. They've gotten caught in a management battle."
Buchanan said that the layoff was as much a surprise to her as it was to school employees.
"That was one of the many decisions and actions that they took that I didn't understand," she said. "But they just didn't have the money to keep their employees on staff for that period of time."
The school, founded 10 years ago, trains young adults in vocational medical careers such as nursing assistant, medical assistant, medical secretary and medical transcriptionist. Tuition ranges from $3,000 to $8,000 for 20-week to 15-month programs.
The Department of Education last month withdrew the school's program approval for 30 days, preventing the school from enrolling students until it could prove financial stability. The department had received complaints from students and staff about the absence of instructors, books not coming in on time and paychecks that bounced.
The last paychecks that employees at the Roanoke campus received did not clear the bank. An administrator covered the checks out of her own pocket.
The Roanoke campus had a 1993 enrollment of about 200. Fifty-three of those students have been carried over into the 1994 year.
Donna Barrette, director of the Roanoke campus, said the school's enrollment is composed predominantly of women - most of them low-income - who are trying to improve life for themselves and their families.
"We've got really wonderful students with wonderful potential," she said. "This was a safe place for them, a place where they wouldn't get knocked in the chops. And now, they've been knocked in the chops. That really bothers me."
McGinty said last month that the school had a cash-flow problem. Its financial condition was linked to its high default rate on student loans - 57.7 percent in 1991, the most recent statistic reported by the U.S. Department of Education.
The high default rate, McGinty said, made it difficult for the school to obtain student loans. That meant lost finances and, eventually, affected the school's ability to meet its financial obligations, he said.
Most of the school's students require some kind of financial assistance, McGinty said.
The Department of Education, after inspecting the school's Richmond and Lynchburg campuses in October, found that the school failed to make refunds for loans and grants, in some cases where students had dropped out.
Buchanan plans to meet with Career Training students at each of its three campuses next week. She will meet with Roanoke-area students at the Brandon Avenue campus Tuesday at 6 p.m. and Wednesday at 10 a.m.
The Associated Press provided some information to this story.
by CNB