MEMPHIS, Tenn. – The business of beauty.
It can be big money and schools that teach it can make big dollars.
One of the most popular schools in Memphis was the Tennessee Academy of Cosmetology.
It touted hands on training and an exciting and lucrative field, but the majority of the students needed Government Financial Aid and many of those aid dollars are handled directly by Tennessee Academy of Cosmetology.
“These young people don’t see this paperwork, that money. They don’t know what’s going on behind the scenes. They don’t have any idea how much they are billed,” said Bridget Jones, a former student.
She contacted WREG after she said she was forced to withdraw.
She cited numerous problems, but particularly what happened with her financial aid loan.
“In the financial aid office when I was asked for my pin. No one should be signing for you for student aid,” said Jones.
She wasn`t the only one .
WREG found documents going back years where dozens of students have filed complaints with the State Cosmetology Board about the Tennessee Academy of Cosmetology on numerous areas, some related to the handling of Financial Aid Funds.
When WREG first started investigating the claims, we sat down with the owner of Tennessee Academy of Cosmetology, William Oxley.
We asked him if the school accessed students’ Financial Aid accounts without them knowing what was deposited or withdrawn.
We also asked if the school forced students to hand over their pin numbers.
“They could easily say no. We have a computer they would have to go around and enter it. At some point they are going to have to enter it,” Oxley told us, as he described the process of using the pin number.
Yet, the Federal Government’s Financial Aid website urged students to not turn over their pin and call the Inspector General to report problems.
“So far no student has complained about anything that I am aware of that the state board did not end up dissolving at some point because when we present our side of it, that was the end of it,” said Oxley.
He was right.
Case after case, students complained and the state took no action.
Some irregularities caught the U.S. Department of Education’s attention.
In 2010, it reviewed how the Tennessee Academy of Cosmetology was handling Title IV government funds that paid for student`s higher education.
The report said 98% of the school’s students received Title IV funds, translating to more than $2 million between two campuses in the 2010-2011 school year.
It found 14 infractions where the school did not return Title IV funds when students withdrew, improperly calculated how much loan money students earned,
failed to keep accurate student attendance and improperly held on to student credit balances without authorization.
It even cited the school for making ineligible disbursements of funds in student accounts.
That was from 2010.
It sounded familiar to Bridget Jones who said she ran into similar problems before withdrawing in 2014.
“I was there one week and I got a bill for almost $4,000. The total cost of the program is a little over $8,000,” said Jones.
After the 2010 review, the federal government told the school to review records, recalculate refunds and repay the Department of Education.
It also had to stop holding students’ credit balances without prior written authorization.
We went back to ask Oxley about our new findings.
This time he refused to come out and meet us.
A manager told us he had nothing to say.
The Department of Education couldn’t tell us how often these type of financial irregularities occurred, but said the department gave schools a chance to respond.
No fine was imposed.
While some issues are required to be brought to the attention of a student population, the ones in the 2010 review weren’t.
So most students never knew about the irregularities.
Oxley blamed the problems found in 2010 on a new reporting system, but he said they were resolved.
Bridget Jones disagreed.
“I was told I don’t have to give you paperwork. You must sign over all your money to us. So they are still doing the same thing at this point that they were doing years ago,” said Jones.
In 2013, two Financial Audits by the Department of Education found Tennessee Academy of Cosmetology in compliance with standards, but students still had complaints.
The State of Tennessee told us its Board of Cosmetology had at least one open investigation based on complaints.
They will take that up on May 4, 2015.
The bottom line, you don’t have to give anyone your private pin number, letting them access your financial aid account , even if it is the school that you are attending.
If you want to file a complaint, you can contact the U.S. Department of Education, Office of Inspector General at 1-800-mis-used or (1-800-647-8733).
Here is a helpful website:
https://studentaid.ed.gov/types/scams#report-college-fraud.
