Business in Vancouver has learned that executives at Sprott-Shaw Community College (SSCC), which recently announced it would close the company’s Duncan, Vernon and Courtenay campuses, are considering further campus closures.
“I think we may plan to close one more campus next year,” said Toby Chu, CEO of CIBT Education Group Inc. (TSX:MBA), which owns the college. “I don’t think it would be appropriate [to say which campus could close].”
Service Canada’s Canada Student Loans Program announced it had stopped issuing loans to students who attended CIBT’s Duncan and Courtenay campuses because of high default rates.
CIBT closed its Vernon operation because the campus had a mere 20 students and was unable to attract students from nearby UBC Okanagan and Okanagan College.
Chu said the campuses with the high student loan default rates were populated with many single moms and aboriginal students.
“Some of [those students] tend to have difficulty [getting] jobs right away so the loans are in default,” he said. “Canada Student Loans pulled loans because the default rate was high, but the default rate was high because of the kind of student we tend to have. It was a chicken-and-egg issue.”
About 35 of SSCC’s approximately 600 staff lost their jobs.
CIBT is also enduring a second blow, Chu said.
The introduction of the HST costs the company about $500,000 per year because it has to pay the HST on expenses and is not able to charge the HST on students’ tuition.
“Enrolment is strong. Part of our strategy is to refocus so that instead of spreading our resources to 17 locations, we can focus on the 14 campuses that are making money.”
Glen Korstrom
Twitter: GlenKorstrom