A state agency is looking at stiffer requirements for private career schools, changes that could have flagged problems at a local computer training school much earlier.
By the time Go2cert.com closed its Everett and Federal Way campuses in May, filing for bankruptcy, its Snohomish County owners owed more than $530,000 in back taxes, past-due rent and other debts.
The mounting bills went unnoticed by the state Workforce Training and Education Coordinating Board in the five years before the school closed.
“These schools are businesses, and they will make decisions about closing just as any other business,” Executive Director Ellen O’Brien Saunders said. “However, we can be much more alert and have a sharper set of tools to deal with schools that are in distress.”
The board is looking at Oregon’s rules for private career schools, including rigorous financial requirements, subject-area experience for all teachers, and expectations for the rates at which students complete programs and find jobs.
The state has schools self-report financial information and only requires owners to sign the statements. Only teachers in fields that require a license or certificate must have related experience. And the state sets no minimum completion or placement rates.
Workforce board members, who represent education, business and labor, must approve any changes. They will study a proposal at their Sept. 22 meeting at Yakima Valley Community College.
Career schools assist adults seeking new jobs or training in a variety of professions. In Snohomish County, there are 23 campuses that serve about 2,700 people each year.
The state board’s review of its rules comes after the 20-student Go2cert.com and 500-student Business Career Training Institute closed earlier this year under a cloud of questions.
In March, Gig Harbor-based BCTI closed its seven campuses, including one in Everett and two in Oregon, amid an Oregon investigation that it trumped up its job placement success and recruited outside welfare offices.
In May, Federal Way-based HTLC Inc., which did business as Go2cert.com, closed its two campuses after the state began the process of revoking its license following student complaints regarding classes and refunds.
Private career schools nationwide have come under increased scrutiny.
“There’s every indication that this is a very serious problem,” said Deanne Loonin, an attorney with the National Consumer Law Center in Boston and co-author of a report about the need for better oversight of the schools.
Washington gets good marks for having a tuition recovery trust fund to give students a financial boost after a closure.
But, nationwide, “at the front end there’s clearly a lot more prevention that could go on, and a lot of that’s more oversight and better credibility in data, like not relying on self-reported data,” Loonin said.
In the case of Go2cert.com, financial statements submitted by the owners each year did not indicate their problems keeping up with bills. The state board did not know that the school was behind on taxes and rent, spokeswoman Tana Stenseng said.
The board did order an audited financial statement from the school in January after students complained about not getting refunds, Stenseng said. The school requested an extension, then closed before the deadline.
In all, the school owes creditors $505,767, according to papers filed in U.S. Bankruptcy Court in Seattle. That includes nearly $97,000 to the Internal Revenue Service and $42,000 to the state Department of Revenue, back taxes incurred since the year the company started.
In at least two cases, bankruptcy papers show the school overcharged by collecting tuition from two different places for the same student, including the Veterans Administration.
In a separate case, papers filed in Snohomish County Superior Court show the school also owed more than $32,000 to its landlord, Everett Mall 01 LLC of Mukilteo.
The state board also is owed money. It is demanding owners Tassawar Sheikh of Mill Creek and John Sheehan of Lake Stevens repay the $147,079 in tuition refunds it paid students because the school did not.
Sheikh has not accepted mail from the state board and has not responded to requests for comment from The Herald.
His lawyer said Go2cert.com was a victim, like BCTI, of “the poor economy in the computer sciences.”
Sheikh earlier this year tried to shift the school’s focus from serving individual students to groups of students from area businesses, but investors pulled out, added Patrick Brick, a Seattle attorney. “It was too much overhead, too few students coming in the door. I think it sort of broke his heart he couldn’t keep Go2cert running.”
Sheehan, reached at home, declined to comment about the closure of the school, of which he is a 5 percent shareholder. “It’s just that I’m moving ahead in other things,” said Sheehan, who said he now is a consulting engineer.
Go2cert.com was one of seven schools the state board has worked to shut down in the last decade. In all, the state oversees more than 250 career schools.
Gena Wikstrom, executive director of the nonprofit Washington Federation of Private Career Schools and Colleges, told state board members last month that it has a good track record.
“There’s no need to have onerous or useless regulations,” Wikstrom said.
Meanwhile, former Go2cert.com student Ross Allen Johnson of Port Orchard is trying to finish his computer-related certification studies on his own and looking for a job.
Johnson, 51, said he doesn’t fault the school’s owners, adding he enjoyed and learned from his instructors at the Everett and Federal Way campuses.
But if he had to do it over, Johnson said he would have gone elsewhere.
“There should have at least been some warning signs,” he said.
Reporter Melissa Slager: 425-339-3465 or mslager@ heraldnet.com.
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