Hank Investigates: Trade Schools

Marie hoped for a new career as a medical assistant--it didn't happen.

Marie
"It was a very huge disappointment."

Dave wanted to forget construction and be a web designer, but he’s still on the job site.

Dave
"Its a rotten scam."

Hairdresser Jill imagined herself a health professional -- but she's back in the salon.

Jill
"We were completely railroaded."

What happened? These students paid thousands of tuition dollars for trade school classes they never got.

Beth
"I can’t believe that they would actually do this to people."

Though they promise careers in high tech fashion accounting medicine. Our investigation found, some Massachusetts trade schools students get ripped off instead. State education officials admit they are often powerless to protect them.

Bob Bickerton, Mass. Department of Education
"This is really a business that is trying to make a profit and some of them are not doing that very scrupulously."

This group enrolled at Xintra Institutes

But one day last year students arrived to locked doors and empty classrooms.

Beth
"It just disappeared."

Their schools closed without notice -- but all their student loans with interest did not.

Cristina
"They expect me to pay $50 a month from now til the year 2009."

Now, instead of posing as the class of 2004 - they're the picture of a failed system.

Hank Phillippi Ryan, 7News
"Who expected to get a degree?" "Who got a degree?"

Here's how it happens.

Every trade school must be licensed by the Massachusetts Department of Education many graduate students with no problems.

But this list of closed schools - dozens of them - proves how often they go out of business or simply disappear.

Knowing the risk---the law requires schools pay an insurance bond--to give refunds when a school goes under. We found that system isn't working.

Jonathan
"I want my money back."

Jonathan got a $15,000 loan to learn web design at Hendriks Institute in Woburn.

When the school suddenly shut down. Jonathan expected the bond would reimburse him. Instead he's getting only a third of his money back.

Jonathan
"Complete robbery. I shouldn't have to pay any of it."

And here's the problem---though records we obtained prove last year hundreds of students were due a total of $1.3 million in refunds there may be only $376,000 in bond money available.

Bottom line: for every dollar of lost tuition--students will get paid back an average of 28 cents.

Hank Phillippi Ryan, 7News
What’s your reaction to that?

Bob Bickerton, Mass. Department of Education
"It's a disgrace."

Why doesn't the auditor's office just make the schools put up more bond money?

It can't. The law 15 years old sets a limit.

Hank Phillippi Ryan, 7News
"Do you think the state could do more to protect these students?

Kenneth Marchurs, MA Auditors Office
"Absolutely the state could do more. It'll be a sad situation if its not addressed."

It's even worse for students in this classroom. The state can't protect them at all.

This is John Winsolow Institute in Randolph here students are taking a test--surrounded by equipment used to teach medical courses.

But all this is illegal. This school has no state license. We arrived as students showed up for class.

Hank Phillippi Ryan, 7News
Why are you operating without a license?

Jacqueline Mitchell, John Winsolow Institute
"We have a license."

Hank Phillippi Ryan, 7News
"You do not have a license."

But we showed the school's director that she is on the DOE's web site as unlicensed.

This state has not approved its curriculum or classes and it has no bond at all.

Jacqueline Mitchell, John Wisolow Institute
"You need to talk to the Mass Department of Education."

In fact, after this interview, the Mass Department of Education for the second time sent her a cease and desists letter.

Ordering the school to stop having classes until it gets a license. The unlicensed school remained open.

These students are relying on the state to protect them, and right now its not working.

Bob Bickerton, DOE
"The laws provide protection but not enough."

Outdated laws, outstanding debts and outlaw schools are leaving students who expected a better education, learning a bitter lesson instead.

Christina
"To have our bubble burst, it's very maddening, and it hurts."

State officials say it's up to Beacon Hill lawmakers to revamp the rules so students at these schools are protected.

For more information on trade and proprietary schools and to check if a school is licensed please go to the MA Department of Education's website:

http://www.doe.mass.edu/ops/