Two days ago, I wrote a post about Marinello Schools of Beauty, and how the DOE decided to pull their federal funding and deny their recertification. Today, Marinello is still crying foul and proclaiming their innocence, while announcing the immediate closure of all Marinello campuses. The closure will displace 4,300 students and 800 employees.
Marinello claims the closure is due to financial hardship, claiming that federal education officials “waited until we were past the point of no return financially to allow us any opportunity to respond to its unfounded allegations.” The Department of Education withheld funding from twenty-three of their locations for the last two months.
Renew DeMont, a former regional manager for Marinello, believes the Department of Education’s accusations against Marinello are well-founded. “They were getting their diplomas extremely rapidly,” she said.
Nicole Standlee, 28, of Visalia, attended the same Marinello school two years ago. Standlee dropped out of high school as a sophomore, and couldn’t believe how quickly they received high school diplomas through Parkridge. After a single week of study, Standlee was told she was ready to take the final exam.
“I literally finished it all in one week and had my high school diploma,” Standlee said. “They pretty much gave me all the answers to the test. It was the exit exam. It’s an actual diploma.”
You know what the DOE calls those schools? Diploma mills.
Jesse Silva, a barbering student, is one of many who arrived to find the Fresno location’s doors closed, with security guards telling students to “grab your stuff and go.” Silva says, “It was always a concern for all of us that for our hours we were being over-charged but it was just–we all thought it was okay because we’d never been to beauty college. We’d never been to another school. We always thought those penalties occurred because that’s how it was.” (Doesn’t that sound familiar?)
Another student, Emily Reyes, wasn’t surprised at all about the sudden closure.
“It’s not like we didn’t see it coming.”
In a letter, Marinello CEO Rashed Elyas wrote: “We want you to know that we did everything in our power to avoid this unfortunate conclusion and keep your school open. Unfortunately, the Department of Education’s unprecedented and unfounded actions left us with no other option except to close our schools.”
Point 1: The allegations clearly aren’t “unfounded.” (They must not understand what that word means.) Actually, the DOE’s actions appear to be quite overdue, and contrary to what Marinello seems to want everyone believe, the actions taken by the DOE were not sudden or unforeseeable. Marinello had been placed on Heightened Cash Monitoring 2 as far back as March of 2015, a designation which means that the school would have to pay out financial aid to students from its own funds and then be reimbursed by the DOE. Marinello was placed on HCM2 for violating their very clear contract with the federal government. How can Marinello blame the federal government for their failure to adhere to the terms of the agreement?
Point 2: Marinello has until February 16th to prove to the DOE that there has been no wrongdoing. That seems like plenty of time to disprove these “unfounded allegations” to me, if they truly are “unfounded.”
For the company to act as if this action comes as such a great shock is ridiculous. Marinello often cites its “long history of compliance with regulatory requirements.” I’ve read the regulatory requirements for Title IV and I’ve also read the DOE’s ten-page letter to Marinello outlining their specific reasons for pulling funding.
Their claim of innocence looks pretty damn hollow when 92% of the files reviewed by the DOE indicate that the company obtained federal financial aid funds using the bogus diplomas they awarded to students, and 17% of those same files also indicate that Marinello illegally charged excessive overtime.
Interviews the DOE conducted reinforce their accusations, and the students and educators I’ve personally spoken with since this began are adding their voices to the chorus of people who, like Jesse Silva, also feel they’ve been defrauded by Marinello.
I’m willing to bet that’s not a coincidence, error, or mass delusion.
Dorie Nolt, the press secretary at the Department of Education fired back, saying in a statement: “Marinello was deceiving students and taxpayers.”
Student Alondra Rubalcaba is wondering what they’re going to do with her money. “The tuition is $22,000. I had to take out two loans. Will I have to pay that back and no graduation?”
Actually, no. The DOE has posted a notice for Marinello students, which contains information on seeking loan discharge. If students succeed, the school will be required to reimburse their loan payments and the federal government for the remaining balance.
Do it now, Marinello students. Finance guy Steve Rhoade predicts that door is about to slam shut. Follow the recommendations in his article if you’re seeking loan forgiveness.
Marinello posted a schedule for student meetings at all of their campuses, where they’ll provide students with their transcripts, proof of training, financial aid transcripts, state contacts, and other information they need to learn how they can continue their education. Representatives of the state agencies in California, Nevada and Connecticut will be present to explain the students’ rights and the options available to them.
I’m currently in the process of compiling a list of national academies accepting Marinello transfers and will be updating it as more of them get back to me. Should any of you hear of any such schools, please notify me in the comments.