Marinello Shuts Down Schools After Federal Aid Scandal

haircut-834280_960_720According to a series of news reports, the Marinello Schools of Beauty reported that it’s currently closing several campuses in three states. At least 39 of them are in California.

The report follows comments made by the Department of Education that indicated that the school received federal student aid money to help students who may not have valid high school diplomas. The school was also underawarading some student funds, and even charging fees from students who were taking too long to finish their programs. The agency noted that “other acts of misrepresentation” were also taking place.

Due to all of these issues, the federal agency decided to announce earlier this week that it would stop the practice promptly. At least 21 campuses in California and one in Nevada were not to receive any more aid.

The Education Department has also claimed that the school did not keep its promises related to cosmetology and barbering. The announcement letter had 10 pages, all filled with reasons to drop the institution from its list of aid recipients. Many students who graduated were unable to cut hair. According to the investigation carried out by regulators, Marinello allegedly steered students who hadn’t finished high school to fabricate their diploma.

California campuses that were impacted by this probe include the ones located in the Los Angeles, Moreno Valley, and Sacramento areas.

Between 2014 and 2015, Marinello received over $87 million in Pell Grants and federal loans. As of January 7, the school claimed 4,329 students. To protect taxpayers and students from similar problems in the future, the Department of Education is doing everything in its power to disclose the school’s wrongdoing. Marinello may present evidence disputing the government’s claims by February 16. Depending on how the investigation turns out, however, the school could still be eligible to receiving more aid in the future. But instead of taking the opportunity the school has to fix the issues unveiled by the Department of Education, Marinello has decided to shut down its campuses instead. Utah, Nevada, and California have been impacted.

The school called the Department of Education’s efforts “unprecedented and unfounded” in a letter addressed to students. According to the letter, the school is arranging partnerships with other schools so students are able to complete their courses elsewhere.

This is not the first time the Department of Education investigates for-profit colleges over mismanagement of federal aids. Corinthian Colleges filed for bankruptcy after an investigation into falsified job placement rates. ITT Educational Services and DeVry Education Group are fighting lawsuits filed by the Consumer Financial Protection Bureau and the Federal Trade Commission over claims that the schools were misleading students.

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