WREG.com

Local for-profit barber school could lose funding eligibility

Zaneta Lowe

MEMPHIS, Tenn. —  Another for-profit school in Memphis could be in trouble.

The On Your Side Investigators found out your tax dollars aren’t getting paid back.

Students at the Memphis Institute of Barbering may soon have to find another way to pay for tuition. Because of high loan default rates, the school could lose its eligibility to participate in federal student loan programs.

The US Department of Education released the latest data, and the Memphis Institute of Barbering, also known as the Barber School, was one of several subject to sanctions because its three-year, cohort loan default rate is above 40 percent.

In fact, of those schools in trouble, it had some of the highest default rates. In FY 2011 (the last year available), the school’s default rate was 44.7 percent, and in the two years prior, the rate was 47.2 percent and 44.4 percent.

Torrus Brooks is the owner of Memphis Institute of Barbering.  He sat down with WREG to discuss the possible sanctions.

Schools facing sanctions can appeal based on a number of reasons.  One is an Economically Disadvantaged Appeal.  The school has to show that it has a high number of low income students, but also a high graduation rate.

Brooks says they plan to file an appeal in that category.

“We’re dealing with a different populous compared to the average two-year community college and things of that nature. We’re dealing with people who just have financial hardships,” he said.

Brooks added, “We do everything we can to help the Department find the student, locate the student, we do all the default prevention.”

Brooks says he believes part of the problem is that former barber and cosmetology students often work for themselves in a cash based business, which makes it even harder for the government to track.

However, he doesn’t think schools should pay the price if they’re following the rules.

Over the last four years, the Barber School’s collected roughly $5.8 million in Title IV and Post 9/11 G-I Bill funding.

The school’s graduation rate is 80 percent, and its retention rate is 50percent.

According to the Department of Education, if a school submits a timely appeal and it’s successful, it will withdraw the loss of eligibility status notification.

If the appeal isn’t successful, the Barber School would lose eligibility for two years.

The school is accredited by the National Accrediting Commission of Career Arts and Sciences. The state agency in charge of authorization for the school is the Board of Cosmetology and Barber Examiners.

The Board’s Executive Director Roxana Gumucio says they weren’t aware of the Barber School’s status. Gumucio told WREG the Board handles licensing, inspections and also audits student files for cosmetology schools.  However, it doesn’t deal with financial or student loan data.

How did other schools fare?
Overall, default rates have decreased across the country, but rates are still high. Research shows that while students at for-profit schools represent a smaller percentage of college students, they account for nearly half of the loan defaults.The average default rate at for-profits is 19.1% versus 12.9% at public colleges and 7.2% at privates.
Three-year Cohort Loan Default Rates- FY 2011

Check out College Navigator to compare data on colleges and universities across the country.