Schumer: Warn students when college is in financial trouble

Sen. Chuck Schumer (D-N.Y.) called for the U.S. Department of Education to implement a warning system for students at financially troubled schools in the wake of Dowling College’s possible closure.

Schumer said the department should require schools to notify their students if the institution is designated as being in the “danger zone” financially, as he said Dowling had been in 2015.

The Department of Education assigns a financial responsibility score to private nonprofit colleges. A Schumer spokesman said the “danger zone” designation was derived from this score.

Such a system would give students “a fair warning if fiscal trouble could lead to an abrupt close,” he said.

“Our young people need to be told the truth about their colleges even if the truth hurts so they can adequately plan for their futures,” Schumer said.

Schumer said schools that failed to disclose to their students that they were in the danger zone should be sanctioned, but he said it should be up to the Department of Education to decide the details.

The Department of Education agrees with Schumer, spokeswoman Dorie Nolt said in a statement.

“That’s why we’ve added such warnings to our College Scorecard and are considering additional regulatory options to improve information for current and prospective students,” Nolt said.

Oakdale-based Dowling announced on May 31 that it would permanently close. That sent about 1,700 students scrambling to obtain transcripts and transfer to other colleges to complete their degrees. Last week the college announced that it was open under “streamlined operations” and is in negotiations with a British investment firm to keep it open.

Citing a 2015 report from Moody’s Investors Service, Schumer said Dowling was not alone, that “there are many colleges on the brink.”

In a statement accompanying last year’s report, Moody analyst Dennis Gephardt said declining enrollment “and lost market share for smaller colleges continue to spur closures and mergers, as students increasingly opt for larger colleges with greater academic resources.”

The report said closures among four-year public and private nonprofit colleges averaged five per year from 2004 to 2014 and were expected to hit 15 per year by 2017.

Dowling student Jennifer Guerrazzi, who joined Schumer’s news conference, said she hopes to finish the last three credits she needs for her master’s degree in special education at Dowling.

Two days before the summer class was supposed to begin, the 25-year-old from Mount Sinai learned her class was canceled and the next day learned the school was closing. Since then she’s been trying to find out whether she could finish somewhere else, or, since Dowling may remain open, if she can finish there.

“I’m still waiting to hear when that class would be offered so I can complete that degree but right now I still have no information,” Guerrazzi said.

Though she completed her undergraduate education at Dowling as well, she said she did not know about the school’s dire financial state when she decided to pursue her master’s degree in 2014.

“Unfortunately I did not know about a ‘troubled’ list or I would have looked elsewhere,” Guerrazzi said.