Texas’ attitude toward regulating for-profit colleges: Buyer beware

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(2nd of two parts)

The stream of complaints against for-profit colleges in Texas in recent years has been marked by one constant topic: students who say the schools are more interested in money than in teaching. 

Over and over, students have claimed they’ve been fleeced by career schools both large and small, with no one overseeing the way these operations do business. In many cases, the schools have shelled out refunds, usually after several queries to both the school and the state.

The Texas Workforce Commission, charged with policing trade schools, can and will step in when warranted. The agency has the authority to penalize schools that do not adhere to state standards of performance, including in the disclosure of enrollment and graduation figures. It has closed schools, suspended enrollment and fined the colleges for violations such as falsifying graduation numbers and enrolling students who can’t pass an admittance test.

But the agency also makes it difficult for students to obtain information on the state’s 576 trade school and for-profit colleges.

A review of state business records shows the owners of these schools sometimes operate with shaky finances, both personal and professional.

The NDS Dental School in Fort Worth has operated since 2008, despite a trail of lawsuits and evictions involving owner Kevin Haywood. The list includes a lawsuit filed by the City of Fort Worth last year for failure to pay $2,600 in local property taxes.

Haywood declined to discuss his school.

In Houston, Lisa Byars is approved by the state to offer students the chance to earn certificates as fiber optic technicians, for tuition of $6,000, through her Tejas Fiber career school.

The school, launched in early 2018, notes on its website that it was formed in 2012 “under a different direction.”

That direction was I Am Fit, a nutrition company. It’s unclear from records what happened to that company, but Byars used its corporate filings as a basis for the school that became Tejas Fiber. She then opened Bling it On Fashion, a storefront retailer in northwest Houston. In 2014, though, Byars was sued by Harris County for $1,400 in unpaid property tax assessments on Bling It On; the tax bill was eventually paid.

Byars did not respond to a call seeking comment.

Terrie Michelle Jarvis has been a serial trade school operator since 1999, when she opened a Dallas-based enterprise called Dental Assisting School on a Flashdrive, which promised dentists up to $600,000 a year for lending their names and offices to dental assistant schools “while not having to actually be in the office.”

By 2004, Jarvis, with her husband, had filed for bankruptcy, showing debts to various taxing entities as well as credit card companies and cell phone providers. Jarvis, though, continued to operate her school, enlisting various dental offices as locations for classes. In 2009, she and a business partner opened Eastex Dental Academy in Longview; the school was closed in 2017.

“I had a six-figure income when I was operating my schools,” Jarvis told The Texas Monitor. She said her past involvement with the justice system, including two bankruptcies and a DUI, was not a hindrance to opening a trade school. The state, though, does require a school, before it opens, to have enough cash on hand to operate for three months with no students.

“They didn’t look at my bankruptcies,” Jarvis said. “But supposedly they do a background check.” 

The Texas Workforce Commission struggles to police the trade and for-profit schools. The schools are frequently listed in state business filings under different names, if they are registered as businesses at all, making records research difficult for a consumer trying to find out who is responsible for management of a particular operation.

Fines can be levied on schools for a number of violations, but the reasons for specific fines are not divulged in the state’s listings, leaving the public to guess.

In 2017, the TWC fined the NDS Dental School in Fort Worth $31,713. The agency declined to divulge the reasons for the fines, insisting The Texas Monitor file an open records request for the records. The agency has previously been criticized by the state’s Sunset Commission for the same tactic.

“The only way for a potential student to get information about actions against a school is to submit an open records request to TWC,” Sunset Commission investigators wrote in a 2015 report.

Haywood, the NDS owner, disputes that he was ever fined, despite the public posting of the sanction.

In some cases, school executives have vast business interests that allow them to treat the meager fines assessed by the state simply as a cost of doing business.

New Horizons Computer Learning Centers, one of the world’s largest IT training providers, is a national for-profit string of career schools, with franchises and campuses in all 50 states. For years it operated as a publicly traded company but went private shortly after purchase by a private equity firm in 2012.

New Horizons’ Texas campuses have been fined five times by the TWC since 2016 for a total of $25,000. But New Horizons is one of dozens of enterprises that CEO Derek Wright operates, and the fines are a negligible part of a business that can make hundreds of thousands, if not millions, on student loan money.

Wright also has a business interest in Horizons Southwest Management, Five Point Real Estate, New Horizons Consumer Learning Center, Central Colorado Horizons and 5P 300 Highland. Most of them operate out of the same north Austin office building where New Horizons is headquartered.

Wright did not respond to an email.

Texas is not alone in its Wild West approach toward regulation of career schools. To the extent that it offers information on its website about student completion rates and enrollment, it is ahead of the many states that provide a complaint form and list of approved schools and leave it at that. Other states enforce rules against for-profits and provide readily accessible websites and databases. In California, where 160,000 students attend for-profit schools, the state posts a list of enforcement actions, including fines and revocations.

After the criticism from the Sunset Commission report in 2015, then-TWC Executive Director Larry Temple wrote in response, in a document posted on the Sunset Commission site, that the TWC already posts pertinent information for students. But he promised — and the agency delivered —   “updates with additional details on regulatory actions taken by TWC, including a listing of administrative penalties, program revocations, and enrollment suspensions-are planned.”

Temple died in January.      

A TWC spokesman declined an interview for this story. 

SEE ALSO: TWC still isn’t making it easy for students to learn about – or complain about – Texas career schools 

Steve Miller can be reached at [email protected].

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