Phillips Students Lose Their School High Default Rates On Loans Led To Government Pressure

Phillips Junior College in Spokane is closing its doors under pressure from the federal government, school officials said Thursday.

The college at 1101 N. Fancher Road in the Spokane Valley will stop offering classes as of Monday, but will stay open for a month to help its 270 students find other schools.

Students at the college Thursday evening looked dazed, even as they were about to take final exams for the end of the current quarter. Some of them fought back tears.

“I’m not happy,” said Thersa McNee, 24, who was six months shy of finishing her accounting program. She said she has taken out $11,000 in loans so far.

Steven Milnes, 25, who is taking an electronics course on his Army veteran benefits, said he needs two more classes to finish. He said he will try to transfer to another college.

“Until I find out exactly what’s going on, I’m not totally upset,” he said.

The closure comes in the wake of a battle with federal officials over the number of loans not being repaid by Phillips’ graduates.

Under guaranteed loan programs, the government is liable if a graduate doesn’t make payments.

Spokane’s facility is one of a dozen Phillips colleges being closed around the country in an agreement with the U.S. Department of Education, said Carolyn Greenleaf, director of the college here.

Two dozen other Phillips colleges will remain open, she said.

Students from the Spokane school have had default rates as high as 35 percent in recent years.

Federal officials a year ago said Phillips could lose its eligibility for granting student loans as a result.

According to Greenleaf, the Phillips college system was put into financial constraints in recent weeks when the Department of Education stopped providing reimbursements for loans already granted to students.

Phillips agreed to close 12 of the 36 colleges in the system in exchange for the government continuing its loan programs to Phillips students, she said.

Eight degree programs are offered by Phillips. Credits are transferable only to for-profit colleges like Phillips. Spokane’s state-run colleges will not accept credits from Phillips.

Greenleaf said the largest program at Phillips was for a medical assistant’s degree.

There are no similar programs in Spokane, she said. Phillips officials are talking with City University about offering the medical assistant program.

About 20 staff members will lose their jobs at Phillips, Greenleaf said.

, DataTimes MEMO: This sidebar appeared with the story: NO CREDIT Spokane’s state-run colleges will not accept credits from Phillips.