High expectations for Lon Morris College's quick recovery were dashed on Friday when the college announced it would not be able to open this fall.
According to a press release issued by Bridgepoint Consulting, which was hired by the ailing 158-year-old institution to help with its financial woes, LMC will suspend classes and focus on finding a buyer for the school.
Dr. John Ross, academic dean at LMC, said the college had between 80 and 120 students in their system, but the figure includes several who were not intending to return. He said each student was contacted individually to help facilitate a transfer to another institution. LMC classes were slated to begin on Wednesday.
“Yesterday and today have been all about the students, trying to help them further their education,” he said.
Ross said most of the students will end up at Tyler Junior College or Jacksonville College because the institutions have an agreement to aid displaced students.
We have been praying for them and in conversation with them all summer,” Dr. Mike Smith, president of Jacksonville College said in an email. “Some of their students have enrolled with us and others possibly will in the near future. My commitment to them is that we will do all we can to expedite the admission process to get them into class.”
The decision follows Monday's bankruptcy hearing in the Eastern District of Texas United States Bankruptcy Court in Tyler, where college representatives tried to prevent the Department of Education from revoking their Title IV status and funding based on its Chapter 11 bankruptcy filing.
LMC claimed the decision was discriminatory because it was based purely on the bankruptcy filing, while the Department of Education said under regulations made by Congress, once an institution files for bankruptcy, it automatically becomes ineligible for HEA funding. The program disperses federal funds and federal student aid such as the Pell Grant, Teacher Education Assistance for College and High Education grants, Federal Work Study and direct loan programs.
“The oldest junior college in Texas has been trying to do everything right to preserve an East Texas institution educating students for 158 years,” said Dawn Ragan, chief restructuring officer of the college, in a press release. “The DoE’s action to cancel all federal financial aid is justified by bureaucrats merely quoting policy, noting they are powerless to use judgment to provide reasonable or practical accommodations. We understand we would literally need an act of Congress to ensure this does not continue to happen to other schools in the same predicament.”
LMC experienced financial difficulty for years as the school tried to expand through costly programs and unfunded scholarship aid, and took on almost $20 million in debt to finance its expansion, the release states.
The Board of Trustees brought in Bridgepoint Consulting, in May, which cut costs and endeavored to put the school on a path to recovery, according to the release. Due to pressure from creditors, including threatened termination of utilities and a posted foreclosure, the school sought Chapter 11 bankruptcy protection on July 2, 2012.
Ross said he has not been informed on what is next for the institution.
“Now it's a wait and see,” he said.