Minnesota’s U.S. senators are asking for federal action following the abrupt closure of St. Louis Park-based Regency Beauty Institute and its 79 campus locations nationwide.
The institute, which had been headquartered in St. Louis Park, issued a statement on its website Sept. 28 saying that it had closed.
“It is with great sadness that we announce that after more than 50 years of educating cosmetology students, Regency Beauty Institute is permanently closing on September 28, 2016,” reads the institute’s website, regency.edu.
The institute statement acknowledged that the closure brought difficult news for students, teachers and staff.
“We are truly sorry for the abrupt nature of this information,” the statement says. “How did this happen? In short, the organization does not have the cash to continue to run the business. There are multiple intertwined reasons: declining numbers of cosmetology students nationwide, a negative characterization of for-profit education by regulators and politicians that continues to worsen and, in light of these factors, an inability to obtain continued financing.”
The school had not been forced to shut down because of an accusation of wrongdoing, the statement continues.
“We held ourselves to high educational and ethical standards,” the website states. “The environment is simply not one that allows us to remain open. We diligently explored a range of strategic options that would benefit our students, teachers, and staff – and allow us to remain open. Unfortunately, those efforts were not successful.”
U.S. Sen. Amy Klobuchar and U.S. Sen. Al Franken responded by writing a letter to Secretary of Education John King Jr., head of the U.S. Department of Education. The senators asked the department to use its authority to discharge federal student loans for Regency Beauty Institute students who choose not to transfer their credits to another institution and students who withdrew from the school within about four months of the closure.
“We ask that the Department act immediately by identifying and reaching out to students who are eligible for closed school discharge,” wrote the senators, using the term for the department’s authority in such situations. “Since students who transfer academic credits to a comparable educational program at another school are not eligible for loan relief, we request that the Department clearly state the criteria for closed school discharge during the outreach process.”
The senators concluded their letter, “We appreciate your prompt attention to this matter, and we look forward to hearing the exact actions the Department will take to protect at-risk students.”
More than 400 students in Minnesota attended Regency Beauty Institute’s five campuses in the state. They had been located in Blaine, Burnsville, Maplewood, St. Cloud and Duluth.
The senators noted that hundreds more students attended campuses in other states.
The students “are left without a clear path forward,” the senators wrote.
Regency Beauty Institute’s website noted: “Significant numbers of accredited cosmetology schools are reaching out to Regency Beauty Institute to complete ‘teach-out’ agreements. These schools are eager to accept Regency students.”
The Regency Beauty Institute website said it would update a list of schools that would accept Regency students through transfer arrangements or teach-out agreements “constantly as new information is available.” As of press time, the website listed some schools in other states but did not provide any for Minnesota.
However, the Minnesota School of Cosmetology, which operates campuses in Plymouth and Woodbury, announced that its staff would seek to assist Regency students.
“Minnesota School of Cosmetology (MSC) is trying to help students impacted by their sudden closing to complete their program as seamlessly as possible,” wrote Michelle Knoll, senior marketing and communications manager for the cosmetology school. “They will be accepting all Regency hours/credits so students will not lose any of the time they have put in and can continue their program. They have also created a special October 10th start date specifically for Regency students so they can continue together. And they will be assigning each Regency student an MSC student mentor to help them get acclimated.”