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When Corinthian Colleges Inc. agreed in July to sell off or close nearly all of its 107 campuses, it left 72,000 students wondering about their futures—and whether they should have seen the writing on the wall.

Now, with more colleges and universities than ever having trouble making ends meet, experts are urging students to pay closer attention to warning signs.

“In this day and age, when there’s so much at risk, it doesn’t hurt to do some legwork and investigate,” said Mike Reilly, executive director of the American Association of Collegiate Registrars and Admissions Officers, or AACRO.

Colleges going out of business
A Everest College location in Woodbridge, Virginia on July 6, 2014. Corinthian Colleges, the parent company of Everest College and for-profit corporation has come under scrutiny by the Department of Education for alleged predatory recruiting that leaves students with high levels of debt and low graduation rates. Photo Credit: Kristoffer Tripplaar/ Sipa USA (Sipa via AP Images)

Measures to protect investors and students take different forms, depending on the nature of the school. Many can be difficult to decipher.

A for-profit college like Corinthian, for example, must disclose serious issues to investors and the federal government. In January, Corinthian filed a regulatory report acknowledging that the federal government was preparing legal action against the company.

The key, Reilly said, is for students to keep up with the warning signs.

“In this day and age, when there’s so much at risk, it doesn’t hurt to do some legwork and investigate.” Mike Reilly, executive director, American Association of Collegiate Registrars and Admissions Officers

“They’re very far down the vortex of the funnel by the time these problems are publicly acknowledged,” he said.

Most reputable colleges and universities are overseen by regional accreditors, which keep an eye on schools’ academic and financial health.

When City College of San Francisco’s budget fell apart, for instance, the Accrediting Commission for Community and Junior Colleges,stepped in and ordered the community college to close. That decision is on hold while a court battle proceeds.

Accreditors give schools several rounds of warnings before taking the rare step of ordering them to close. It’s important for students to know the difference between an early warning and more serious sanctions, said Mary Ellen Petrisko, president of the Western Association of Schools and Colleges, or WASC, division that accredits four-year schools in California and Hawaii and other Pacific islands.

“Students should not panic when they see there’s some sort of challenge to the institution,” Petrisko said. “Institutions go through challenges all the time.”

Accreditors like WASC post warnings and other actions after each meeting. The documents can be helpful for students who want to keep track of their schools’ financial health.

Other resources include credit-rating agencies such as Moody’s, which warn bond investors about at-risk schools. Among the schools that have failed Moody’s smell test is New York’s Yeshiva University, which was downgraded to junk-bond status after a series of financial problems.

Yeshiva’s vice president for university and community life, Rabbi Kenneth Brander, said some students had expressed concerns about their financial aid. But Brander said there was no threat to scholarships or academics.

Students at shaky colleges should press their student leaders to keep a close eye on the school’s future, said Reilly, of AACRAO. A school that is confident it’s on the right track should have no trouble communicating details to students, he said.

“One of the things is for students to look at whether an institution is being realistic about its future,” Reilly said. “Once a school closes, your options become a little more limited. I would start asking questions about what the plan is for the institution. If they’re doing nothing but making assurances to students, I’d be concerned.”

Several colleges and universities have tried to stave off extinction by merging with other schools. Some mergers work out, but others fail and leave students marooned and without transferrable credits.

A merger “to me seems like a very tenuous strategy,” Reilly said. “That seems like a trigger in my mind. I’d get a copy of my official transcripts at that point.”

The U.S. Department of Education also provides a measure of schools’ financial strength through its annual “financial responsibility composite scores,” on which a score of less than 1.0 indicates problems. Among the schools falling into the irresponsible category in the latest list were vocational colleges such as Alabama’s Birmingham School of Massage and Ohio’s Toledo Restaurant Training Center and more traditional schools such as Oklahoma Christian University.

Stricter federal oversight would help students, who often are unable to decipher warnings about their schools, said Maxwell Love, vice president of the United States Student Association.

“There’s a lot of uncertainty,” he said. “Students are really not in the best situation for making their own decisions.”

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