Hildreth Institute Testifies on Colleges’ Financial Review and Risk Monitoring

Deanna Colella and Bob Hildreth testifying for student rights during college closures

Bob Hildreth, Founder of Hildreth Institute

Good morning Mr. Chairman and thank you for this opportunity to address you, the Board of Higher Education.

I would like to thank the Board of Higher Education for understanding the enormous damage that is done to students when colleges close, and thereby initiating this important conversation. My aim today is to raise awareness of this particularly vulnerable group and to advocate on their behalf. College students must be granted sound protections to defend themselves during college financial difficulties. Three critical aspects are currently missing from this discussion:

First, we must dig deeper to discover why colleges are closing, and not hide behind the simple explanation that it is due to changing demographics. A closer look reveals that current college business models are unsustainable. Under the current proposal, colleges will continue to collapse, possibly at a slower pace, but students’ hard-fought-for dreams and aspirations will still inevitably be harmed. If we are to truly avoid more college closures, we must focus on how to restructure those failing business models.

Second, the current plan doesn’t address that colleges will be hemorrhaging during the teach-out period. Faculty and staff will not be able to patiently wait for plans to be properly executed. We can expect that programs will shut down earlier than anticipated, and there will be ‘student refugees’ — students who have been displaced and derailed from their higher education paths. Some will be forced to spend extended time pursuing their degrees, meaning more student loans. Others will seek loan forgiveness, losing their college credits and being forced to start their degrees over from scratch. And unfortunately, some will give up on their college dream altogether. There must be additional support for students who are affected by colleges that close under this plan.

Last, there is a critical lack of accountability in the non-profit higher education sector. Massachusetts has some of the strongest consumer protection laws in the country. However, legal barriers often prevent students and their families from seeking damages from non-profit colleges and universities under Massachusetts’ Chapter 93A consumer protection law. The fact that students and their families pay substantial amounts, borrow large loans, and are prevented from seeking damages under 93A, is naturally confusing. With this lack of protection, college officials and administrators will continue to advertise the promise of a degree to students and their families;and continue to admit new freshmen classes knowing that they will never reach graduation. I’m confident the Board is familiar with the Mt Ida College closure, where trustees and top administrators argued in court that colleges do not have any fiduciary duty to Mount Ida students, that they do not have a contractual obligation to provide an education to the students. If we are serious about protecting students we will remove the existing barriers standing in the way of students’ ability to file Chapter 93A and other consumer-protection claims against not-for-profit colleges and universities.

Deanna Colella, Former Newbury College Student

Thank you Mr. Chairman and thank you members of the Board. My name is Deanna Colella, and I am a Newbury College student refugee.

In 2014, I graduated with honors from Bunker Hill Community College with an Associate’s of Science in both Meeting and Event Planning & Hotel Restaurant Management. Eight months after graduation from BHCC, having no job offer that paid more than minimum wage, I decided to go and complete my Bachelor’s degree.

I started by taking courses at UMass Boston throughout the spring, summer and fall of 2015, where I maintained a 3.90 GPA. In the spring of 2016, I enrolled in Newbury College’s online Bachelor of Science Professional Studies program majoring in Hospitality Management. I had only two courses left to qualify for graduation when Newbury closed earlier this year. Now I’m faced with a choice, do I transfer my credits, taking on tens of thousands of dollars in more student loans? Or worse, give up my years of hard work and forfeit my dream of earning a Bachelor’s degree, stuck owing over $60,000 in student loan debt with nothing to show for it. While I appreciate the Massachusetts Board of Higher Education’s efforts to provide overdue protections from unexpected college closures. I am disgusted that a student must invest so much of themselves to gain a college education, yet the school and government owe them nothing when a college closes! My time at Newbury College not only required student loans, and credit card charges. I also invested years of time and commitment to earn a degree I don’t have and may never receive.

Instead of putting a band-aid on the problem, the Massachusetts Board of Higher Education needs to require that all private nonprofit colleges ensure their students can complete a degree without incurring further debt, should the college close before the student graduates. Students have limited protections under Massachusetts law, and schools are not obligated to offer teach- outs under current federal regulations.

Students like me, whose opportunity to graduate was stolen from them due to a college closure should have the opportunity to transfer those courses elsewhere and receive a degree, without having to take on more debt.