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The original documents are located in Box 1, folder "Advance Schools, Inc." of the
Richard B. Cheney Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
1975
Dow, LOHNES & ALBERTSON
1225 CONNECTICUT AVENUE
PAYETTE 0.00W (1681-1662)
HOURSE L.COMIES (1067-1924)
WASHINGTON, D.C.
IRED W. ADDERTSON
ALAN C.CAMPOELL
20036
THOMAS W. WILSON
RICHARD F. SWIFT
DEPRARD 3. 10M0
WILLIAM Γ. SIMS
PATRICK H.ALUEN
or COUNSEL
THOMAS 11. WALL
PALPH W. HARDY. jr.
PARL R. STANLEY
JAMES O. MONAHAN
JOHN .. RAFTER
JAMES A.TREANOR III
RICHARD L.GRAUNSTEIN
SUZANNE METER
JOHN MATTHEWS
J. MICHAEL MINES
RICHARD O. HARKS
TELEPHONE
CHARLES J. MCKEANS
0. DWIGHT PEARY
JOHN 1. DAVIS
(202) 659-8200
DANIEL M. REDMOND
ARNOLD P. LUTZKER
CABLE "DOWLOHNES"
L.ADRIAN ROBERTS
LEONARD J. BAXT
DANIEL W. TODNEY
DONALD D. WEAR.JR.
DERNARD J.LONG,JR.
JOY M. MARPLE
December 31, 1974
CHARLES M.HELEIN
MICHAEL MCCARTHY
Advance Schools, Inc.
5900 Northwest Highway
Chicago, Illinois 60631
ATTENTION: Fred C. Lochmann
General Counsel
Gentlemen:
You have requested our opinion on the extent of
the insurance coverage on loans insured under the Federally
Insured Student Loan Program ("FISL") in the circumstances
set forth below. In giving this opinion, we have examined
certain documents provided to us by Fred C. Lochmann, Gen-
eral Counsel. In addition, other facts have been provided
to us in conversations with Mr. Lochmann and Charles Chase
of your Company.
I. Facts
Advance Schools, Inc. ("Advance") is a home study
educational institution and is the largest educational lender
under FISL. Upon enrollment of a student, Advance enters
into a retail installment contract to provide instruction to
the student in one or more vocational subjects. The student
has the option of paying the full amount of his tuition in
cash or to finance the tuition by a variety of means, the
least expensive of which is by obtaining a loan under FISL.
If a student wishes to finance his tuition under FISL, Advance
does not lend him cash, but accepts a note executed on Office
of Education ("OE") Form 1164 in the amount of the student's
tuition. Under the terms of an FISL loan, the student is not
obligated to make any payments of principal or interest prior
to the expiration of nine months following the termination of
his course of study.
In order to raise working capital, Advance sells
student loans to banks for their full face amount, with notice
Digitized from Box 1 of the Richard B. Cheney Files at the Gerald R. Ford Presidential Library
Dow. LOHNES Ex ALBERTSON
Advance Schools, Inc.
December 31, 1974
Page Two
of sale being given to each student. Since the sale proceeds
are used by Advance for working capital, they are not directly
traceable to the performance of services for the student-bor-
rower. Under the terms of the purchase agreements with the
various banks, Advance is obligated to repurchase a student's
loan for its full face amount, less any student prepayments,
at such time as the student either completes his course of
study, cancels his enrollment or is terminated by Advance.
Since the interest rate on Federally insured student loans
is substantially less than the banks could earn on other
investments, the banks purchase the loans in reliance on the
Federal insurance covering the full amount of the loans and
thereby making them economic investments.
The tuition contract entered into by the student
provides that, if the student completes one or more lessons,
he is obligated to pay $70.00 plus a pro rata amount for
each completed lesson, computed by subtracting $70.00 from
the total tuition charge and dividing the result by the num-
ber of lessons in the course. The excess tuition charge is
to be refunded to the student. In the case of a student who
makes a cash tuition payment, this refund would be in cash.
In the case of a student who finances his tuition, this
refund would be in the form of an offset against his loan
pursuant to a power of attorney given by the student to Advance.
II. Question Presented
The question which has been raised by the banks
participating in Advance's sale program is whether, in the
event Advance is unable to honor its repurchase and refund
obligations, the student defaults in his payment of the
loan and the loan is still owned by the bank, the Federal
insurance covers the full amount of the loan or only the
amount of the loan minus any refund due to the student from
Advance. Although the matter is not free from doubt, we
believe that the better view is that the insurance covers
the full amount of the loan excepting only such amount by
which the loan may be reduced by reason of student payments.
While we are aware of the so-called Mable Greene
Note, the facts involved there are distinguishable from
the present situation, since the amount of the refund due
the student was apparently applied to reduce the amount of
the student's loan held by a financial institution. In
such a case, it is clear that the Federal insurance covers
Dow. LOHNES Ex ALBERTSON
Advance Schools, Inc.
December 31, 1974
Page Three
no more than the reduced amount of the loan. The situation
involved in the present case, however, is one in which the
bank has received no payment, with the result that the prin-
cipal amount of the loan is still the amount disbursed by
the bank. The remainder of this letter will be based on
the assumption that no pre-payments have been made and will
address itself only to the situation in which a refünd is
due to the student because of his failure to complete his
full course of study.
III. Statute and Regulations
Section 429 of the Higher Education Act of 1965,
as amended, (the "Act"), 20 U.S.C. $1079, authorizes the
Commissioner of Education (the "Commissioner") to insure
student loans made by eligible lenders and permits transfer
of insured loans between eligible lenders pursuant to regu-
lations promulgated by the Commissioner. Section 430 of
the Act, 20 U.S.C. $1080, provides that, upon default by a
student borrower, the Commissioner shall pay to the insured
the amount of the loss sustained by the insured upon the
loan. The Section also defines the amount of the loss as
an amount equal to the unpaid balance of the principal
amount and interest on the loan.
These statutes are implemented by regulations
found in Part 177 of Title 45 of the Code of Federal Regu-
lations. These regulations are incorporated into the Con-
tract of Insurance issued to an eligible lender which pro-
vides that loans will be insured and administered in con-
formity with the Act and the regulstions. The regulations
provide that the Commissioner will enter into agreements
with eligible lenders insuring losses resulting from the
failure of borrowers to repay the principal amount of
insured loans. 45 C.F.R. $177.42 (a) (1974) The insurance
covers all disbursements made pursuant to the loan, 45
C.F.R. $177.41 (b) (1974), and the amount of the loss on
any insured loan "shall be the amount equal to the unpaid
balance of the principal amount of such loan. 11 45 C.F.R.
$177. (d) (1974). Apparently, the discrepancy between
this regulation and the statute referred to above is due
to the fact that the regulation was promulgated prior to
DOW. LORNES & ALBERTSON
Advance Schools, Inc.
December 31, 1974
Page Four
the amendment to the statute permitting the insurance
to cover interest. Under the provisions of 45 C.F.R.
$177.49 (1974), an eligible lender is permitted to transfer
insured loans to other eligible lenders and in the event
of transfer, the insurance coverage remains in full force
and effect.
IV. State Law Aspects
If the transaction is viewed solely from the
standpoint of State law, the unpaid principal balance of
the student's loan could be considered to be an amount
equal to the original principal amount minus the amount
of any refund due to the student. If Advance were to
attempt to sue the student for the full amount of the loan,
it appears that the student could successfully assert the
defense that he was not liable for more than the original
amount of the loan minus any refund attributable to the
portion of the course which he he did not complete.
Although it is not clear which State law would
be applied in construing the rights of Advance, it appears
that, under the commercial law of most states, the banks
could not claim rights greater than those of Advance. The
note executed by the student in connection with the loan is
not a negotiable instrument since it lacks the specific
words of negotiability, that is, it is not payable to
order or to bearer, but is merely a statement that the
maker will pay a specified amount to Advance. It is unclear
whether the note is payable at a definite time and whether
it contains an unconditional promise to pay. If the note
does not contain these two additional elements of a negoti-
able instrument, it is not only non-negotiable, but also
it is simply a contract and is not covered by the provisions
of the Uniform Commercial Code. It appears, however, that
the classification of the note is irrelevant in determining
the rights of the banks.
If the note is a "non-negotiable instrument"
which merely lacks words of negotiability, it is, never-
theless, subject to the provisions of the Uniform Commer-
cial Code pursuant to Section 3-805, but no holder of
the note could become a holder in due course. Thus, the
Dow. LOHNES & ALBERTSON
Advance Schools, Inc.
December 31, 1974
Page Five
rights of the bank would be governed by Section 3-306 of the
Code providing that all persons who are not holders in due
course take instruments subject to any defenses which would
be available in an action on a simple contract or the
defenses of want or failure of consideration. In addition,
the provisions of Section 3-119 of the Code to the effect
that the terms of the note may be modified or affected by
any other agreement executed as a part of the same trans-
action would apply in determining the bank's rights.
Accordingly, we believe that the bank would probably have
no greater claim against a student than Advance itself
would have, and thus could sue the student only for the
earned portion of the tuition, that is, the original
amount less any refund due to the student.
If, on the other hand, the note is not a non-
negotiable instrument, it is merely a contract. Assuming
that the sale to the bank under the purchase agreement
is an assignment of Advance's rights against the student
to the bank, nevertheless, we believe that the bank would,
as a general rule, be subject to all of the defenses which
the student could assert against Advance. 3 Williston,
Contracts, $432 (3rd Ed. 1960). Even though notice of
the assignment is given to the student, this would not pre-
vent the student from asserting a defense arising from
the terms of the enrollment agreement itself, i.e., that
the amount of the student's debt is limited to the earned
portion of the tuition.
V. Federal Law Aspects
While the liability of the student and the rights
of the bank and the school on the student's note are governed
by State law, the question presented is not one of State
law, but of Federal law. The Federal government has under-
taken to insure student loans pursuant to its own statutes
and regulations. These statutes and regulations are imposed
upon an existing system of State law and economic practice.
In construing the Federal statutes and regulations, it is
necessary to take into consideration the full economic sub-
stance of the transaction.
When considered from this viewpoint, rather than
from the viewpoint of State law, it appears that the bank
Dow. LOHNES Ex ALBERTSON
Advance Schools, Inc.
December 31, 1974
Page Six
is really the lender in this case and should be entitled to
the full insurance protection. When a student finances his
tuition under FISL, Advance neither immediately disburses
nor receives cash. Nevertheless, it requires funds in
order to operate and obtains them by selling student loans
to banks. However, the provisions of 45 C.F.R. $177.6 (e)
prohibit an educational lender from transferring loans
at a discount. Thus, the banks which purchase loans from
Advance are required to pay the full amount of the loan.
Advance's practice is not distinguishable from
the situation in which a bank makes a loan directly to a
student who then pays cash to a school for the amount of
his tuition. In such a case, the student is clearly in-
debted to the bank for the full amount of the loan regard-
less of whether the student is eligible for a refund from
the school. From the point of view of the bank, the sub-
stance of the transaction in the present case is the same.
In either case, the funds are not traceable to the perfor-
mance of educational services on behalf of any particular
student. In either situation, the bank actually disburses
the full amount of the loan for the benefit of the student.
The only difference is that, in the present situation, Ad-
vance performs certain functions which would otherwise be
performed by the bank, such as investigation of the student's
credit and processing of the insurance application. These
mechanical details, however, do not affect the fact that
the bank disburses the loan to finance the student's tuition
in each case. Because the substance of the transaction is
the same, it is apparent that in each case the real lender
is the bank and the real loan is the disbursement of funds
by the bank. Accordingly, the amount of the insured loan
should be the same in each case, i.e. the the amount of
money disbursed by the bank.
Regardless of the rights of the parties under
State law, it is clear that, from the standpoint of Fed-
eral law, the bank is the lender and the amount of its
disbursement is the loan which is covered by the Federal
insurance. Under the provisions of Section 430 (b) of the
Act, the Federal government is subrogated to the rights of
the lender upon payment of the insurance claim. It appears
that the obligation undertaken by the Federal government
is to fully reimburse the lender for the amount of the loan
and to step into the shoes of the lender in any proceedings
which may subsequently be brought under State law to collect
upon the student's note. It is apparent, therefore, that
Dow, LOHNES & ALBERTSON
Advance Schools, Inc.
December 31, 1974
Page Seven
there are two levels of legal obligations involved in the
present situation, those imposed by State law and those
imposed by Federal law. Under Federal law, the government
has undertaken to protect the lender from the risk of
default on student loans and to accept that risk itself.
Viewed in this manner, it appears that the Federal insur-
ance covers the full amount of the loan unreduced by the
amount of any refund which may be due to the student.
VI. Conclusion
The real question is not the rights of the various
parties under state commercial or contract law, but the
proper construction of a Federal statute and regulation,
the purpose of which is to guarantee lenders and thus
facilitate credit to students for educational purposes.
It is clear from the legislative history of the Act that
the intent of Congress was to involve banks and other fin-
ancial institutions in making loans to students through
the vehicle of providing government insurance of the loans.
See, e.g., S. Rep. No. 673, 89th Cong., 1st Sess. (1965),
1965 U.S. Code Cong. & Admin. News, p. 4059 et seq. ; H.R.
Rep. No. 1319, 90th Cong., 2nd Sess., 1968 U.S. Code Cong.
& Admin. News, pp. 3116, 3124-31. Like most educational
lenders, Advance must sell its student loans to raise
working capital, a situation which is contemplated under
applicable regulations and has existed for a substantial
period of time. This method of educational financing
facilitates the purpose of the Act by removing the admin-
istrative burden of making student loans from the banks,
but the substance of the transaction reveals that the bank
is as much the lender as in the case in which the loan is
made directly by the bank. The full insurance coverage
by the government is consistent with both the substance of
the transaction, the policy of the Act and the provisions of
the regulations. Therefore, while the matter is not free
from doubt, we believe that the proper interpretation of
the regulations is that the banks are lenders entitled to
insurance protection and that the amount of the insurance
coverage is the amount disbursed by the bank minus any ac-
tual payments received by the bank, but not reduced by any
refund due to the student.
Very truly yours,
Dave,
DOW, Lohnes & Albertson
advance schools, inc.
5900 NORTHWEST EIGHWAY, CHICAGO, ILLINOIS 00031
SHE RMAN C. CHRISTENSEN
OFFICE OF THE PRESIDENT
December 23, 1974
Mr. Kenneth A. Kohl
Associate Commissioner
Office of Guaranteed Student Loans
Department of Health, Education and
Welfare
Washington, D. C. 20202
Dear Mr. Kohl:
A question as to the extent of the guarantee covering federally insured
student loans ("FISL") has been raised by the commercial lenders who deal
with Advance Schools, Inc. ("Advance").
This letter will describe the operational procedures of Advance with
relation to those students who participate in the Quaranteed Student
Loan Program. For your information, under separate cover we have re-
quested the law firm of Dow, Lohnes {r Albertson to send you its discussion
of the issue and the firm's conclusionary views.
When a student applies for enrollment at Advance, be signs a contractual
obligation which stipulates the tuition agreement. (Sce Exhibit "A").
A part of that agreement is the tuition refund policy of Advance. This
is an essential part of the tuition contract for the student who remits
his tuition prior to the commencement of his training. If a student is
unable to pay cash for his course a variety of financing plans are avail-
able to him, the most economical of which (to the student) is FISL.
Should the student desire to participate in FISL he completes all the
forms as required by the Program. (See attached Exhibits "B", "C", "D",
and "E"). In addition, we request the student to corplete a Power of:
Attorney Assignment form (see attached Exhibit "P") in order that should
the loan be approved, and should the student's active student status
cease for any reason prior to course completion with a tuition refund
due, the student's refund might be applied to his unpaid principal
balance, as a student prepayment, effectively, in order that the loan
Study
Council.
advance schools, Inc.
5900 NORTHWEST HIGHWAY
CHICAGO, ILLINOIS 60631
Mr. Kenneth A. Kohl
December 23, 1974
Page Two
balance may be reduced. Absent the power of attomey the student would
be the recipient of the refund. We are of the opinion that the assignment
of power of attorney and subsequent application of refund to reduce the
unpaid principal balance of the loans has been signal in the reduction
of default, SO we, therefore, encourage the protection of both the govern-
ment's and the student's interests through such an assignment.
Às an educational lender in FISL our lending function disburses the full
amount of the loan at the outset of the course, SO that the student might
be enabled to meet his tuition payment obligation stipulated in his
tuition contract.
In order that other students might be similarly served and that cash for
our lending function might be obtained, we sell these loans to commercial
lenders pursuant to the terms of an agreement drawn between Advance and
the oumercial lender. Our agreements are Mather unique in that they
provide for our repurchase of the loans upon their "naturation". "Naturation"
for purposes of such agreements, is that point in time thirty (30) days
after (i) a student's graduation, (ii) withdrawal from the course by the
student, or (iii) termination of the student's enrollment by Advance. In
this way we will service out the note and, further have found this con-
sistency of contact (as far as the student is concerned) to facilitate
repayment, thus, again; reducing default. (For a typical example of our
agreements with commercial lenders see Exhibit "G".)
Upon Advance's sale of the loan to a comercial lender, the lender
disburses the full amount of the loan as required by 45CFR Sec. 177. (e)
Concomitant with the sale is the prompt notification to the student by
Advance of the transfer of his loan, informing him of the lender to
whom his loan has been transferred (see Exhibit "H").
Our notification to the student of the transfer of his loan is thorough.
At the time of the student's application for FISL we provide him with a
booklet describing the loan program in detail. In our efforts to reduce
default we find it baneficial to inform the student clearly and in several
ways that he is applying for a loan and not a grant and that repayment is
Home
the
Council.
We
advance schools, Inc.
5900 NORTHWEST HIGHWAY
CHICAGO, ILLINOIS 60631
Mr. Kenneth A. Kohl
December 23, 1974
Page Three
expected. Further, we encourage the student to make prepayments prior to
the expiration of the grace period because this, in reality, benefits both
the government and the student.
One of the vehicles for this communication is the attached booklet referenced
above. (See Exhibit "I") You will note that on page 3 there is the
statement:
=
It is your cbligation to keep your lender (emphasis added)
informed of changes of address, school cr student status. After
the expiration date or completion of your course or withdrawal
from the school, whichever comes first, you must contact your
lender to arrange for repayment of the loan
"
Finally on page 3 we inform the student:
"When making payments to your lender it is best to use a personal
check or money order. All checks or money orders should be made
payable to the financing institution indicated by
=
As you can see, the student is apprised of the potential of dealing with
a lender other than Advance. Then, upon the actual transfer, he is informed
of the identity of the lender. (Exhibit "H") Thus, any prepayments
made by the student are sent to the lender holding his loan so that his
unpaid principal balance might be reduced.
In the interest of expedient processing of any prepayments by students,
we have subsequently revised the above referenced booklet to request that
students deal directly with Advance rather than their Lender. [See Exhibit
"I(a)"] Our experience has demonstrated that we can more efficiently
collect and remit to the lender holding the student's loan than any alterna-
tive method.
When the student ceases to be an active student (due to graduation, termin-
ation by Advance, or withdrawal from the course) we repurchase his loan
from the lender. Should withdrawal or termination occur prior to completion
of the course, a refund of tuition is due the student pursuant to the terms
of the tuition contract. As mentioned above, because our students grant
us a power of attorney, we may direct the refund to the unpaid principal
balance of the loan rather than directly to the student. In this manner
the refund is actually a prepayment by the student, facilitated by our
administrative procedures.
the of the National Home Study Council,
advance schools, Inc.
5900 NORTHWEST HIGHWAY
CHICAGO, ILLINOIS 60631
Mr. Kenneth A. Kohl
December 23, 1974
Page Four
During the fifth month following the cessation of the student's active
status, we send him a repayment schedule requesting his signature and
the return of the schedule. This repayment schedule indicates the
original amount of the loan and any amount by which the unpaid balance
(original amount) may have been reduced due to prepayment. (See Exhibit
"J")
At the time of repurchase and subsequent maturation, Advance services
out the loan, but if Advance were not to repurchase the loan for any
reason whatsoever, the comercial londers would need to service out
the loan, utilizing their own collection functions, or otherwise provide
for such necessary activity.
This, then, describes the participation of Advance and its students in.
the Guaranteed Student Loan Program.
Although a question has been raised by the comercial lenders about the
extent of the guarantee, we feel that review of the legislation, the
legislative history, the regulations, and our administrative procedures
answers rather than asks any question of the extent of the guarantee.
Quite obviously the intent of the program was to facilitate universal
student access to postsecondary education by reducing financial
impediments. This would be accomplished by inducing the extension
of credit to students for educational needs by corrercial lenders.
Realizing that the fixed low yield of the loan notes would not, in
itself, provide incentive and would be more likely to discourage
participation, the Congress had to provide the lending comunity with
an incentive, and that was the guarantee that there would be no
capital loss ever sustained by a comercial lender.
The Congress, in its wisdom, also realized that some educational in-
stitutions were either in locations not served by commicial lenders
or that the lenders in a particular location were not adocuately
capitalized to finance the students of the institution. In addition,
the home study divisions of colleges as well as private home study
schools have students who reside in disparate parts of the country
and abroad. These students, in particular, would have difficulty
advance schools, Inc.
5900 NORTHWEST HIGHWAY
CHICAGO, ILLINOIS 60631
Mr. Kenneth 7. Kohl
December 23, 1974
Page Five
individually obtaining financing. To solve these problems, the Congress
authorized educational institutions to become lenders.
Another potential daterment for commercial lender participation was
again dispelled by the guarantee. This potential determent was the
requirement of 45 CER Sec. 177.6(e) that educational lenders sell or
transfer their loan paper only at full value. Anyone familiar with
commercial banking knows that I.O lender would consider purchasing a
low yield note with potential for default at least commensurate with
historical bad debt and a prohibition from discounting to cover such
potential loss. As alluded to above, the full guarantee of the full
amount of the loan is the redeeming factor which encourages commercial
lender participation.
Accordingly, we hereby respectfully request of your office a clarification
of the extent of the guarantee covering FISL in response to the expression
of interest and concern by our counercial lenders. Your pronpt attention
to this matter is greatly appreciated. Should you have any question or
require additional information, please Co not hesitate to contact US.
Sincerely,
Shorman C. Christensen
President
CVC/FCL/pw
CC: John B. Ackley
JAN 20 1975
DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE
DEPART.
STATE
OFFICE OF EDUCATION
U.S.A.
WASHINGTON, D.C. 20202
January 17, 1975
Mr. Sherman C. Christensen
President
Advance Schools, Inc.
5900 Northwest Highway
Chicago, Illinois 60631
Dear Mr. Christensen:
This is in response to your letter of December 23, 1974, in which
you request clarification as to the extent of the Federal guarantee
under the Federal Insured Student Loan Program, particularly as it
pertains to the lending activities of Advance Schools ("Advance"). We
have carefully considered the points made in your letter, as well as
those in the letter of the same date from Mr. Patrick H. Allen, of the
law firm of Dow, Holmes and Albertson, and a letter dated January 2, 1975,
from the same law firm to Advance, a copy of which was furnished to us
by Mr. Fred C. Lochman of your staff.
You indicate in your letter that a student at Advance who desires a
federally insured student loan may receive it from Advance, acting in its
capacity as an approved, eligible lender. The student is asked to sign
an "authorizations certificate" which, inter alia, states that any re-
fund which may become due to him from Advance will be paid to "the lender"
and will be applied against the outstanding principal balance of the
loan. The loan is disbursed in its entirety at the time the student be-
gins his course and, in order for Advance to have cash resources for ad-
ministering its program, the loan is subsequently sold to a commercial
lender, with notice being provided to the student that such sale has been
made. Under the terms of the agreement between Advance and the commercial
lender, Advance is obligated to repurchase the loan from the lender upon
the student's graduation, his withdrawal from his course, or the termina-
tion of his enrollment by Advance. Advance is then responsible for all
further servicing and collection on the loan.
So long as the lending activities of Advance are carried out in this
manner, it would appear that no concerns or problems should arise regard-
ing the extent of the Federal guarantee. The concern, as we understand
it, is raised by the commercial lenders with respect to the situation that
would arise if Advance, for any reason, were not to repurchase the loan
and the lenders were therefore responsible for servicing and collecting
the loan. In particular, the lenders are seeking a clarification of the
extent of the Federal guarantee in the case that a student has become
Page 2 --- Mr. Christensen
entitled to a refund from Advance, but the refund has not been paid to
either the student or the lender.
As you point out, the Federal Insured Student Loan Program ("FISL
Program") is intended to enable students to finance their postsecondary
education by encouraging lenders to provide funds which might not other-
wise be available for such purpose. Consistent with this purpose, we
welcome the participation in the program of eligible lenders which fol-
low sound and established practices regarding federally insured student
loans. We have no desire to adopt policies which would conflict with
what lenders might expect from the Office of Education on the basis of
such practices. On the other hand, in the exercise of our statutory
responsibility for the administration of the FISL Program, we must not
adopt policies which would be inconsistent with the duties and obliga-
tions which Congress has imposed on lenders and on the Office of Educa--
tion, even if such responsibilities do not conform to some of the per-
ceptions or expectations which lenders may have formed with regard to
the program. In this regard, we do not concur with the rather absolute
statement, on page 4 of your letter, that Congress has provided a guaran-
tee that there would be no capital loss ever sustained by a commercial
lender.
To state the matter succinctly, in carrying out our statutory
authority and responsibilities, our policy objectives are to promote
student accessibility to the FISL Program; to hold institutions and
lenders to sound and diligent practices in their participation in the
program, including providing the student with clear and timely explana-
tions of his obligations and rights; and to provide reasonable assurances
to lenders who conform to such standards that their investment will be
protected.
I.
It is our present policy to honor a default claim submitted by a
commercial lender on a loan which was originated by an institution of
higher education (or vocational school) and assigned to the lender, in-
cluding any amount in such claim which represents a refund which is due
to the student borrower from the institution, provided that all of the
following conditions have been met:
(1) the student's right to the refund has come into existence
subsequent to the assignment of the loan to the lender;
(2) the student was notified promptly when the loan has been
assigned to the commercial lender and was fully advised of
his obligations and rights with regard to the institution and
the comercial lender, respectively;
Page 3 -- Mr. Christensen
(3) if the institution does not intend to pay the refund directly
to the student, either because the student has agreed that the
refund shall be applied against the outstanding balance of his
loan or for any other reason, the institution has promptly noti-
fied the lender that such refund has become due and should be
treated by the lender as an amount receivable from the institution;
(4) the lender has made a reasonable effort to collect the amount
of the refund from the institution; and
(5) the institution and the lender have otherwise exercised
reasonable care and diligence and have complied with all other
statutory and regulatory requirements.
Please note that the current regulations for the FISL Program, at 45 CFR
177.49 (b), require that the student borrower be given notice of an assign-
ment of his loan. The notice may be given by either the institution or
the lender to when the loan is assigned; however, if the lender relies
on the institution to do so, it will also bear the risk that such notice
is not given.
In our view, when all of the conditions set forth above are met, our
policy will result in appropriate protection for both the student and the
lender. The student will not be subjected to collection efforts for
amounts greater than he is responsible for repaying. The lender will be
expected to meet a requirement for reviewing the practices and capabilities
of the institution with which it proposes to do business and to make a
sound business jurigment whether to proceed. The lender will also be ex-
pected to make reasonable efforts to collect the amount from the educational
institution but will otherwise be protected on its purchase of the loan.
In particular, the Office of Education will, in large measure, assume the
responsibility for seeking the collection of the earned refund from the
school. (In this regard, we note our expectation to publish in the near
future regulations requiring each institution to provide fair and equitable
refunds. The enforcement of such regulations will properly be the role of
the Office of Education and the regulations will include appropriate pro-
cedures for such enforcement.)
II.
In view of the generalized nature of the concern being expressed by
the lenders, it appears desirable to set forth two additional points in
further elaboration of the policy stated above. If the lender authorizes
or knowingly permits the institution to collect or receive payments from
the student borrower subsequent to the transfer of the loan to the lender,
the Office of Education will not honor a default claim submitted by the
lender as to any amount therein which is attributable to such payments made
to the institution, but not forwarded by the institution to the lender. We
believe this to be a straightforward restatement of generally applicable
Page 4 - Mr. Christensen
comercial law and generally understood comercial practice. Again, it
serves to protect the student borrower and to place on the lender a reasona-
ble responsibility for knowing the institution with which it deals,
In addition, if a student borrower is not able to complete the program
of study for the particular period of time for which he obtained the FISL
loan, due to the fact that the institution has discontinued its teaching
activities during that period of time. The Office of Education will not
honor a default claim from the lender for any amount therein which is
attributable to the loss to the student for the portion of the program of
study which he was not able to complete. In other words, we are differentiat-
ing between the case in which the institution continues to operate, but fails
to pay an earned refund, and the case in which the institution ceases to
operate its academic functions. In our view, the latter situation coes to
the very substance of the student's contract or agreement with the institution.
In the parlance of generally applicable commercial law, we view this situa-
tion as involving a failure of consideration on the initial transaction,
thereby giving rise to the defense on the part of the student which is good
against the lender irrespective of the receipt of notice that the loan has
been transferred. In terminology comparable to that used above, the
responsibility being placed on the lender includes a reasonable judgment
that the institution has the resources and administrative capability to pro-
vide the services for which the student has entered into his contract.
III.
We have reviewed the various documents which you were kind enough to
attach to your letter. We are aware that when the documents and forms being
used by Advance were prepared there was an expectation that the issues under
discussion in this letter would not arise.
We are suggesting modifications which we believe would bring prospective
practices more in line with the policy statements set forth above. They in
no way affect the application of prior comments to your past practices.
We are concerned that the package of materials and forms presented to
the student convey to him the overall image that the student's enrollment
contract, Advance's tuition refund policy, and his FISL loan, even after
transfer to another lender, are merely elements of a unitary package of
rights and responsibilities which are inseparable and are not affected in
any manner by the transfer of: the loan to another lender. More specifically,
we believe the student is not adequately advised of the nature of his poten-
tial responsibilities to the lender, the consequences of his making payments
to Advance subsequent to the transfer, and the full consequences of the
"Authorization Certificate for the Guaranteed Student Loan Program" (Exhibit
"F" to your letter) which he has signed. The notice of transfer (Exhibit "H"
to your letter) does not appear to be adequate for this purpose, but rather
to contribute to the overall perception that there is no real significance
to the transfer.
Page 5 -- Mr. Christensen
We recommend the following changes:
(1) Since the "Authorization Certificate", as now worded, appears to
refer to Advance in two capacities --- both as lender and as school ---- there
is a serious ambiguity in the reference to "the lender" in the last sentence
of the form. While this could be read to include a subsequent tranferee
lender, it is also highly probable that it is often read to mean Advance
itself. If you wish to have an arrangement with the student and the lenders,
whereby you will not make any refund payments directly to the student but
will apply the refund to the student's loan being held (or which might con-
tinue to be held) by the lender, we suggest that the form be expanded and
that it specify that the refund will be made to whichever lender is hold-
ing the note at the time the refund becomes due. The form should also
specify that, in any event, Advance will notify the holder that a refund is
due and that the student's outstanding loan obligation will be reduced in
the amount of the refund. If you do not wish to have this kind of arrange-
ment with. the student and the lenders, and do not use a power of attorney
form, then the documentation which is given to the student should explain
that, in the event that the loan is transferred to another lender, the refund
is a separate element from the student's loan obligation; and in that
situation, even though the student may be entitled to a refund from Advance,
he will still be obligated to the lender for the full amount of the loan.
(2) The form letter used to notify the student that his loan has been
transferred to another lender (Exhibit "H") now states that "this does not
affect your
loan obligation", thereby creating the impression that
there has been no change in the student's responsibilities to any of the
parties. We recommend that this letter discuss in more detail the expecta-
tion that Advance will repurchase the loan before it goes into repayment
status and the fact that if that repurchase does not take place, the student's
repayment obligations will be to the lender or to such other party as the
lender designates. If you wish to continue the current practice of making
collections on loans held by the lenders on their behalf, we recommend that
this form further indicate that this is being done with the permission of
the lender and that the student will not be subjected to double collections.
The lenders will, of course, have to approve such a statement; and it would
seem necessary for the form, if it is to continue to come from Advance, to
carry some indication of such approval, such as the signature of an official
of the lender. It would also be desirable that this form reiterate the
arrangements regarding the payments of refunds directly to the holder of the
loan and the consequences thereof.
It may also be desirable to make further changes in your materials,
including appropriate changes in the "Retail Installment Contract"
(Exhibit "A" to your letter) which will clarify the separation of the various
elements --- the enrollment contract, the refund policy, and the FISL loan.
We recommend that you review all of the documents and materials distributed
Page 6 - Mr. Christensen
to your students, with the viewpoint of clarifying their rights and
responsibilities, consistent with the policies set forth in this letter.
I sincerely hope that this letter serves to clarify Office of Educa-
tion policy on those issues which have given rise to your concerns and
those of the lenders with whom you do business.
Sincerely,
22 a. dell
K. A. Kohl
Associate Comissioner
Guaranteed Student Loan Program
CC: Mr. Allen
Advance Schools, Inc. is one of the nation's largest home study schools
for vocational training in fields such as automotive, appliance and
television repair. Currently 70,000 students from all over the United
States are studying with Chicago based Advance, 48,000 students graduated
last year. Its typical student is in his late 20's, married, has children
and is employed. Most of them are veterans.
The Company is a leader in quality education within its field and in ethical
practices for dealing with its students and their financial obligations.
Its students have a high percentage of lesson completion and graduation.
Professional surveys show that students believe that Advance's courses
have accomplished the purposes for which they were taken.
Advance has created and represents about 10% of the Federally insured
Guaranteed Student Loan program, as about 90% of its students use this method
of financing their education. Advance's refund policy obligates a student
to pay only for lessons completed. The school has not submitted any claims
for loss, except in the case of death or bankruptcy.
To provide working capital, Advance has sold its insured student loans to
banks. There are now 47 banks who hold about $70,000,000 of guaranteed
loans originated by Advance. In addition, Student Loan Marketing Association
(Sallie Mae) has lent $9 million to Advance, secured by $111/2 million in
guaranteed student loans.
Advance has agreed to repurchase these loans from banks upon a student's
graduation, termination or cancellation, which repurchase has been financed
b y the sale of new student loans. This procedure avoids the need for the
banks to service repayment of the loan, a factor that has limited their
direct participation in the student loan program.
Due to the high prime rate and tight credit conditions, for some months
Advance has been unable to sell new student loans to banks. This has led
to a liquidity problem for the School. It has been unable to repurchase
paper from banks and to meet vendor obligations according to their terms.
These conditions exist despite the fact that Advance continues to operate
profitably, and its operations for the three months ended December 31, 1974
were within its revised budget. Student enrollments and lessons taken are
on schedule. Company has a net worth of $11 million and it has over $20
million in insured student loans which it has been unable to sell because
of the conditions just outlined. It also has about $9 million in demand
deposits in banks, the use of which has been blocked by the banks'
uncertainty about the situation. To meet this situation, Advance has reduced
its operations by about a third, and created a five year financial program
that will restore liquidity to the Company. This plan involves $5 million
in new secured borrowing from Sallie Mae, and Advance's banks continuing
their present level of participation in the school's financing.
This plan was presented on November 21st. At this time some banks raised
a question as to the coverage of federal insurance on the "unearned"
portion of student loans they had purchased.
Advance sought to obtain an authoritative answer to this question, and
retained special Washington counsel which stated that the insurance was
effective on the unearned part of the loan. A request was also made
for the Office of Education's opinion, and on January 17th, it stated
that the unearned portion would be insured only so long as the school
was in business.
Also in mid-January, Advance was advised by Sallie Mae that it would
lend the school only $1.5 million more and it would do this only in a
manner that would give Sallie Mae an improved collateral position on
its existing loans to Advance. The Company would also have to incur
$500,000 in additional annual servicing fees for its Sallie Mae borrow-
ings.
Advance told Sallie Mae that this is an inadequate response, that it
has need of $5,000,000 as stated in November, and that the delays in
response from Sallie Mae and the Office of Education have made the bank-
ing community uneasy and created severe cash problems for the Company.
If Advance goes out of business there would be about $40,000,000 of
unearned student loans in the hands of its banks, which amount would
lose its insurance coverage under the recent Office. of Education opinion.
The entire student loan program would suffer a severe shock, creating a
question if it can effectively provide financial aid to people of modest
means. A number of banks would also be severely hurt by losses they could
suffer under these conditions.
Last but not least, the field of vocational and home study education would
lose the school and its 2,200 employees that set the standards in its field.
Since governmental agencies have been urging other schools to conform to
Advance's practices, their efforts to upgrade the field would also be
impaired should Advance be forced out of business.
The Guaranteed Student Loan program was created to help provide financial
aid, at a reasonable cost, to students of modest means. Its usefulness
is not limited to higher education. In recent years a large number of
people have improved their vocational skills through home study, through
use of federally insured student loans. Auto, appliance refrigeration
and television repairs are examples of these skills.
Since home study schools neither have endowment nor public tax support,
they finance their work through the sale to banks of insured student loans,
or secured borrowing against them.
This procedure has been made nearly impossible due to tight credit condi-
tions, and a prime rate that is equal or above the return permitted on
these loans. Consequently schools, who relied on the continuing sale of
student loans are in a severe liquidity crunch which threatens their very
existance, even though they may be doing an outstanding job in instructing
students, and are operating efficiently and profitably.
The Student Loan Marketing Association, (Sallie Mae) was created to provide
liquidity in the student loan market, but it has declined to assist
effectively in this crisis. This is true even though Sallie Mae finances
itself mainly through the sale of its own federally insured notes.
Banks which have been purchasers of this guaranteed student paper are also
unwilling to participate further in the program due to uncertainty over
the coverage of federal insurance created by a recent Office of Education
ruling. It indicates that to the extent that a student loan, originated by
a school and sold to a bank, is unearned, it is not insured if the school
goes out of business. Since this is the very time the insurance would be
losses, this ruling could cause on present portfolios, over $40 one
reeded, the banks' position is understandable especially in view million of potential from
school's Toans alone.
Banks have been generally unwilling to participate directly in the student
loan program due LO the costs involved in servicing the loan. Therefore,
conditions caused by this ruling will eliminate the economic way for banks
to participate, namely, through school-lenders "aggregating the demand"
for banks.
Unless these conditions are corrected, so that Sallie Mae provides the
necessary liquidity and banks are reassured on insurance coverage thousands
of Americans of modest means will be denied an opportunity to advance them-
selves, and our economy, through self-improvement by home study of vocational
skills.
NEWS
from Advance Schools, Inc.
From: Advance Schools, Inc.
FOR INFORMATION
(District office street address)
(District Manager's name)
(City, State, Zip Code)
(Office phone number)
FOR IMMEDIATE RELEASE
(Date)
ADVANCE SCHOOLS HELPS AREA RESIDENTS
REACH CAREER GOALS THROUGH HOME STUDY
More and more
residents are enrolling in
(name of your city)
vocational training courses at home by mail as a means of reaching their
career goals, according to
, district manager
(your name)
of the local office of Advance Schools, Inc.
According to
, more than
(your last name)
(number of active students)
area residents are enrolled in home-study courses from Advance Schools. The
courses range from auto mechanics, air conditioning and refrigeration repair,
and electrical wiring to radio and television repair, bookkeeping and accounting,
and general office skills.
Costs range from $745 for the basic electricity and small appliance repair
course to $1,865 for the radio and television service and repair course, according
to
. On the average, it takes about 18 months to complete
(your last name)
an Advance Schools home study course.
Nationally, Advance Schools ranks as one of the largest educational companies,
with over 72,000 active students. Since 1969, the school has graduated some
74,000 students and has an average completion and graduation rate of more than 50
per cent. A recent. audited survey of Advance Schools' graduates showed that over
86 per cent of those responding were employed in a field related to their
home-study training, according to
(your last name)
(more)
-2-
The Advance Schools office in
is located at
(your city)
For further information about home-study vocational
.
(street address)
training, contact
at
(your full name)
(your office phone number)
# # #
NEWS
from Advance Schools, Inc.
For: Advance Schools, Inc.
Marketing Communications Dept.
5900 Northwest Highway
Chicago, Illinois 60631
(312) 775-8585
FACT SHEET
ADVANCE SCHOOLS' CURRICULUM
Mobile Engine Service & Vehicle Maintenance
Aimed at assisting the student in developing skills for fields such as
specialty mechanic, shop foreman, automotive mechanic, technical instructor
or service mechanic for buses, trucks, tractors or autos, this course consists
of 69 units. The student is provided with home, laboratory/shop work-kits
consisting of professional-quality tool box, engine charts, battery service
materials, timing light, tune-up analyzer, compression gauge, exhaust gas
analyzer, and various other diagnostic and service implements.
The course comes with filmstrips, projector and instructional recordings. It
usually requires about 17 months to complete and costs $1,495.00.
Scientific Tuneup, Ignition, Carburetion
The purpose of this course is to assist the student in developing skills in
fields such as an auto ignition tuneup service specialist, or parts manager,
jobber salesman or automotive sales representative. Thirty-six instructional
units which usually take nine months to complete include tools, engine charts,
fuel and vacuum testing gauge, implements for battery testing and servicing,
timing light, compression gauge, exhaust analyzer and additional service
equipment. Cost of this course: $1,075.00.
Refrigeration and Air Conditioning
The graduate of this course can qualify in a field such as refrigeration
mechanics, prepared to develop into a diagnostician and service technician,
inspector, instructor, troubleshooter or experimentation and testing assistant.
The 70 instructional units are accompanied by such training aids as service
tools, refrigerant, refrigeration tubing, thermometer, soldering set and
testing gauges, all the material to build and experiment with a complete
refrigeration system, in addition to filmstrips, projector and instructional
recordings. Most students complete the refrigeration and air-conditioning
course in 18 months, at a cost of $1,525.00.
(more)
-2-
General Office
In 53 instructional units this course is aimed at assisting the student in
developing skills for such fields as typist, clerk-typist, general office
worker, girl or guy Friday or receptionist. Students are taught proper
typing techniques on a manual typewriter, use of correct spelling, grammar
and vocabulary and how to handle filing, mail and the telephone properly.
Graduates are also skilled in preparing manuscripts, letters, envelopes
and some of the commonly used business forms and legal documents. Training
aids include a typewriter, filmstrip projector, filmstrips, dictation records
and practice records. Cost is $1,125.00.
Bookkeeping and Elementary Accounting
Upon successful completion of this course, the ASI student will have an
understanding of the basic principles of bookkeeping and accounting as
well as a solid foundation for additional training as a cost accountant,
budget analyst, tax accountant or auditor. He may qualify in such fields
as bookkeeping or accounting.
The 50 instructional units normally require about 17 months to complete.
The student is given practice worksheets, an electric adding machine,
filmstrips, projector and correlated instructional recordings -- all
included in a tuition cost of $1,125.00
Electric Service and Appliance Repair
After graduating from this course, the student is prepared to develop
into a specialty technician, foreman or service manager. With some sales
ability, the graduate might even advance to parts manager, salesman or
even manage his own business in appliance repair, commercial and residential
wiring, motor-generator repair and maintenance.
The 60 lessons are accompanied by filmstrips, projector and instructional
recordings and 15 home, laboratory/shop work-kits. Service tools, soldering
equipment and supplies, Vac-U-Tronic tester, neon glow lamp, vacuum gauge
and many other service essentials are provided. The course includes lessons
in business-building procedures, such as direct advertising and circular
distribution, and teaches successful methods of developing a profitable
electric service and repair business. Normally completed in 16 months, this
course costs $1,255.00.
Basic Electricity and Small Appliance Service
Twenty-six lessons coordinated with eleven home, laboratory/shop work-kits
provide the student with the background needed to develop into an electrical
technician specializing in the operation, repair, and maintenance of small
appliances. The course costs $745.00 and means an investment of time amounting
to about 7 months.
Among the materials provided with the course are projector, filmstrips,
instructional recordings, service tools, soldering equipment and supplies,
electrical parts, materials for diagnostic testing and troubleshooting
equipment used in the servicing of such appliances as vacuum cleaner, oven,
range, toaster, etc.
(more)
-3-
Electric Service: Major Appliances, Motors
Students who complete this course can qualify to handle operation, repair
and maintenance of motors, generators and laundry appliances, possibly
even in business for themselves. Forty instructional units are accompanied
by such materials as service tools, solder gun and supplies, terminal crimping
set and components to build a professional ohmmeter, armature growler and
pyrometer. In addition, filmstrips, projector and instructional recordings
are provided as training aids.
The course costs $895.00 and is usally completed in about 10 months.
Electric Wiring: Heating, Oil Burners
In 32 units this course is aimed at preparing the student for a career as an
electrical technician specializing in installing commercial and residential
wiring, servicing heating appliances and providing oil burner service. There
is potential for opening one's own business in electrical service, if the
student has sales ability.
During the course of study the student receives six home, laboratory/shop
work-kits and projects consisting of service tools, soldering equipment,
components to build an ohmmeter and electrical-load testing unit and basic
electrical parts plus filmstrips, projector and instructional recordings.
Cost is $795.00 and the course is normally completed in 8 months.
Radio and TV Service and Repair
The graduate of this course can qualify for the field of radio-TV service
and repair -- troubleshooting radios, tape recorders, record players, hi-fi
systems and black & white televisions. Or, the graduate may utilize his
skills in industrial positions such as analyzer, repairman, phaser and quality
controller.
The cost of $1,865.00 includes 96 instructional units, normally completed in
two years. Nineteen separate kits are supplied to the student, containing
tools, testers, signal generator, vacuum-tube voltmeter, oscilloscope and
radio and television assembly kits in addition to instructional recordings,
filmstrips and projector.
Color Television Service and Repair
The student of this course must have successfully completed the course in
Radio and TV Service and Repair as a prerequisite. As a graduate of both, he
may be eligible for more technically demanding careers in commercial and
industrial fields.
(more)
NEWS
from Advance Schools, Inc.
For: Advance Schools, Inc.
Marketing Communications Dept.
5900 Northwest Highway
Chicago, Illinois
(312) 775-8585
HANDICAPPED REHABILITATION ASSISTANCE PROGRAM
by
Ray O'Neal
Industrial Sales Manager for
Advance Schools, Inc.
THE PROBLEM
Millions of American men, women and children are afflicted with a
wide variety of disabling conditions, including mental illness and
retardation, orthopedic impairments, nervous-system disorders, blindness,
deafness and amputations. The word "handicapped" is often used as a
generic term intended to apply to all of these disabling conditions. It
is not an entirely inappropriate term, for these conditions are frequently
handicaps to obtaining employment.
In recent years, there has been a major emphasis to "Hire the
Handicapped." This stepped-up activity enables disadvantaged citizens to
move toward increased independence through training and job placement. But
it should be pointed out to American business that when jobs are provided,
it not only helps the individual, but also helps the taxpayer who otherwise
must support the institutions that care for the handicapped. Employers must
be convinced to give handicapped persons a chance in spite of preconceived
notions about what those with disabilities can and cannot do. They need to
understand that the handicapped have useful skills and can perform carefully
selected jobs as well as their non-disabled counterparts.
(more)
-2-
THE SOLUTION
All of us -- the handicapped, employers and society -- benefit from
making full use of everyone's abilities. Emphasis should be placed on
what the handicapped can do, not what they cannot do. The goal of a program
should be to set the stage so that handicapped persons can help themselves
and take pride in the fact that they are doing so. These programs should
emphasize the ability and skill applicable to employment rather than
particular handicapping factors.
Good placement of a handicapped person means using the "whole man"
concept -- evaluating the candidate on the basis of his total capacity,
experience, training, aptitude, skills and physical qualifications. The
mark of a proper placement is when the impaired person is no longer
occupationally handicapped.
In the past few years, some new approaches have been undertaken in
rehabilitation training. One of these is "programmed learning" in which
each handicapped student moves at his own pace through a series of packaged
lesson plans. Advance Schools, Inc., one of the country's largest,
privately-operated, guided, independent home-study schools, offers a wide
range of technical as well as business-oriented courses suitable for use
in training the handicapped.
Today, thousands of companies have enlightened employment practices
concerning the hiring of the handicapped, and have made realistic evaluations
of the physical demands of various jobs. Concerned companies are ready to
evaluate and modify job requirements, even to the extent of creating a new
position, when such an effort will enable them to tap the skills of the
handicapped applicant.
(more)
-3-
We should all remember that a handicapped person is essentially the
same as anyone else. As long as we know the nature of his disabilities,
we can train and treat him as we would anyone else. Although today many
disabled men and women are still barred from employment by negative
attitudes as well as physical barriers, Americans can be proud that
8 million handicapped persons have been placed in jobs...and some 3 million
prepared for work through vocational rehabilitation.
#
# #
ADVANCE SCHOOLS, INC. RADIO INTERVIEW SCRIPT
ANNCR:
As MORE AND MORE OF US BUY A SECOND CAR,
A SECOND OR EVEN THIRD TV SET, OR AN
AIR CONDITIONER FOR THE BEDROOM, THE PROBLEM
OF WHO'S GOING TO FIX IT WHEN IT NEEDS
REPAIRING IS GETTING WORSE, TODAY, WE'RE
GOING TO BE LEARNING MORE ABOUT ONE METHOD
OF VOCATIONAL TRAINING FOR THE REPAIRMAN OF
TOMORROW. WE'RE HAPPY TO HAVE WITH US
OF ADVANCE SCHOOLS, ONE OF THE LARGEST
CORRESPONDENCE SCHOOLS IN THE COUNTRY,
TELL ME,
,
JUST HOW
BIG IS ADVANCE SCHOOLS?
ASI:
WELL, CURRENTLY WE HAVE MORE THAN 72,000
ACTIVE STUDENTS ENROLLED IN OUR HOME-STUDY
COURSES,
ANNCR:
WHAT COURSES DO YOU OFFER?
ASI:
ADVANCE SCHOOLS HAS HOME-STUDY COURSES IN
AUTO MECHANICS, AIR-CONDITIONING AND
REFRIGERATION SERVICE AND REPAIR, ELECTRICAL
WIRING, RADIO AND TELEVISION REPAIR, GENERAL
OFFICE SKILLS AND DRAFTING AND BOOKKEEPING
AND ACCOUNTING
-2-
ANNCR:
WHAT DOES ONE OF THESE COURSES COST, AND HOW
LONG DOES IT TAKE TO FINISH?
ASI:
ON THE AVERAGE, OUR COURSES COST ABOUT $1,200.
THEY RANGE FROM $745 FOR THE 26-LESSON BASIC
ELECTRICITY AND SMALL APPLIANCE REPAIR COURSE
TO $1,865 FOR THE RADIO AND TELEVISION SERVICE
AND REPAIR COURSE. FOR THE AVERAGE STUDENT, IT
TAKES ABOUT 18 MONTHS TO COMPLETE THE COURSE,
ANNCR:
WHEN YOUR STUDENTS GRADUATE, DO YOU GET THEM
GOOD JOBS?
ASI:
No, ADVANCE SCHOOLS PROVIDES FIRST-CLASS
VOCATIONAL TRAINING. WE ARE NOT AN EMPLOYMENT
AGENCY, AND YOUR LISTENERS SHOULD CAREFULLY
INVESTIGATE ANY CORRESPONDENCE SCHOOL THAT
PROMISES TO GET ITS STUDENTS JOBS BY ASKING FOR
VERIFICATION OF JOB-ASSISTANCE CLAIMS,
ANNCR:
THAT'S A GOOD POINTER FOR ANYONE CONSIDERING
ENROLLING IN A CORRESPONDENCE COURSE, WHAT
ARE SOME OF THE OTHER PITFALLS TO AVOID?
ASI:
THE FIRST THING THAT I'D DO WOULD BE TO CHECK
THE SCHOOL'S REPUTATION WITH THE LOCAL BETTER
BUSINESS BUREAU AND WITH THE NATIONAL HOME
STUDY COUNCIL IN WASHINGTON, D. C. ANOTHER
GOOD SOURCE IS THE EDUCATION DEPARTMENT IN
THE STATE CAPITOL,
-3-
ANNCR:
I'D GUESS THAT ONCE YOU CHECKED OUT THE
SCHOOL, THEN YOU'D ASK FOR A SCHOOL CATALOGUE
OR OTHER LITERATURE?
ASI:
THAT'S RIGHT. BUT ALSO ASK THE SCHOOL FOR
THE NAMES AND PHONE NUMBERS OF SOME OF THEIR
CURRENT STUDENTS AND GRADUATES HERE IN TOWN.
THEN CALL THESE PEOPLE AND FIND OUT IF THE
SCHOOL DELIVERED ON ALL ITS PROMISES.
ANNCR:
OK, LET'S ASSUME THAT YOU'RE TO THE POINT THAT
YOU HAVE THE SCHOOL'S SALESMAN IN YOUR HOME.
Do YOU HAVE ANY SUGGESTIONS ON HOW THE
CONSUMER CAN BE PROTECTED?
ASI:
THE BEST ADVICE THAT I CAN GIVE IS TO
CAREFULLY READ AND UNDERSTAND EVERYTHING ON
THE SCHOOL CONTRACT BEFORE YOU SIGN IT.
FEDERAL REGULATIONS REQUIRE A THREE-DAY
COOLING-OFF PERIOD DURING WHICH YOU CAN STILL
BACK OUT OF THE CONTRACT. DON'T BE RUSHED INTO
ANYTHING,
ANNCR:
ALL RIGHT, LET'S ASSUME THAT EVERYTHING IS
ON THE UP-AND-UP, AND YOU START THE COURSE,
THEN AFTER YOU'VE BEEN AT IT FOR A MONTH OR
SO, YOU DECIDE THAT YOU JUST DON'T HAVE THE
TIME TO KEEP IT UP, ARE YOU $1,200 POORER
AND STUCK WITH THE COURSE?
-4-
ASI:
WELL, I CAN'T SPEAK FOR ALL SCHOOLS, BUT
IF YOU WERE AN ADVANCE SCHOOLS' STUDENT YOU
COULD QUIT AT ANY TIME AND BE OBLIGATED FOR
ONLY THE LESSONS YOU'D COMPLETED.
ANNCR:
WE'VE TALKED ABOUT QUITTING, WHAT ABOUT
GRADUATING? How MANY OF YOUR STUDENTS
GRADUATE?
ASI:
ON THE AVERAGE, OF EVERY 100 STUDENTS WHO
BEGIN THE ADVANCE SCHOOLS' PROGRAM, 51
COMPLETE THEIR COURSE OF STUDY AND
GRADUATE, THAT'S A 51 PER CENT GRADUATION
RATE, WHICH IS BETTER THAN MANY COLLEGES.
ANNCR:
I ASSUME THAT THE REASON MOST PEOPLE TAKE A
CORRESPONDENCE COURSE IS TO GET A BETTER JOB.
IF YOU DON'T OFFER JOB PLACEMENT, HOW
SUCCESSFUL ARE YOUR GRADUATES IN GETTING INTO
A RELATED FIELD?
ASI:
You're RIGHT. IN MOST CASES, THAT'S WHAT
VOCATIONAL TRAINING IS ALL ABOUT. WE
RECENTLY RECEIVED THE RESULTS OF AN AUDITED
SURVEY OF OUR RECENT GRADUATES. THE REPORT
WAS THAT OF THOSE WHO TRIED TO GET A JOB IN
A FIELD RELATED TO THEIR ADVANCE SCHOOLS'
TRAINING 86 PER CENT WERE SUCCESSFUL,
-5-
ANNCR:
WELL, THANK YOU
FOR GIVING US THE BENEFIT OF YOUR EXPERIENCE
IN HOME-STUDY, I HOPE THAT SOME OF
YOUR STUDENTS HERE WILL BE GRADUATING SOON
TO FIX MY TV SET WHEN THE PICTURE TUBE GOES,
I'M SURE THAT
WOULD BE HAPPY TO ANSWER ANY OF OUR LISTENERS
QUESTIONS ABOUT HOME-STUDY TRAINING, HE'S
LISTED IN THE PHONE BOOK UNDER ADVANCE
SCHOOLS, INC.
NEWS
from Advance Schools, Inc.
For: Advance Schools, Inc.
Marketing Communications Dept.
5900 Northwest Highway
Chicago, Illinois 60631
(312) 775-8585
FOR IMMEDIATE RELEASE
GUIDED HOME STUDY ONE SOLUTION
TO COUNTRY'S JOB-SKILL DEFICIT
Today there are an estimated 5 million Americans, including military
personnel, enrolled in vocational training by correspondence. And Sherman
T. Christensen, chairman of Chicago-based Advance Schools, Inc. (ASI), believes
that these are the people who will have to meet America's increasing needs
for skilled mechanics, repairmen and tradespeopie.
Department of Labor figures show that in 1972 there were 2.8 million
mechanics and repairmen in the U.S., and by their projections, the need for
these. skilled workers, in the country as a whole, is expected to increase rapidly
through the mid-1980's. For instance, the national need for auto mechanics is expected
to grow 21% between 1968 and 1980. That translates to 20,000 new openings a
year in just this category. But according to data available to the Department
of Labor, only just more than 13,000 are being trained annually. And this is
exactly the need that Christensen feels home study can help fill. (Of course,
these statistics apply to the total U.S. population. Local requirements may
vary considerably.)
"The dignity of the trades is reaching new levels, and skilled tradesmen
are more in demand every day, but traditional vocational training is still not
the top priority in most high schools today. And small businessmen don't have
the time or the teaching skills to provide on-the-job training," noted
Christensen.
(more)
-2-
"Home study can thus be an effective way to learn a new trade or to
upgrade a person's skills to keep up with the changing technology in our
world. Our enrollment figures, alone, have increased more than 400 per
cent since 1970. We believe that the reason behind this sudden interest in
learning a profession at home by mail is that it is one of the best
means for a person already employed who simply can't take the time for
classroom learning or for someone who can't conveniently'commute to school,"
noted Christensen.
"We're enrolling the serious student who genuinely wants to upgrade
his or her job skills. Home study is a very difficult way to learn and only
the truly motivated person will succeed. But for those with motivation,
home study can be rewarding. In an audited study of our graduates conducted
this year, we learned that of those responding who tried to find employment
in work relating to their ASI training, 86.2 per cent were employed in work
relating to the field of their ASI training. This number, of course, includes
those who were already employed in a training-related field and upgrading their
skills, as well as those who entered a new field because of their ASI training,"
reported Christensen.
The home-study industry has a great deal of work ahead of it, though,
if it is to keep up with the increased demand for vocational training, according
to Christensen. He is the first to admit that the home-study industry has a
bad reputation, but he and other industry leaders are working to improve the
industry's image by trying to correct the industry's problems. He also said
that the industry must do a better job of selling prospective employers on the
concept that a job applicant who learned his skill by home study is as well
qualified as the person who learned in a residential trade school. The industry,
too, must keep pace with technical advances that have the potential for improving
home-study, vocational training.
(more)
-3-
Such concepts as video-taped course lessons and monitored final exams,
for example, are already being investigated by ASI education experts.
Christensen also envisions adapting some traditional classroom vocational
courses to home study. "Welding, for instance, just couldn't be taught by
home study because you simply couldn't send a welded auto fender through the
mail for grading. We are considering the idea, though, of developing a welding
course that would be supplemented by a trailer truck outfitted with welding
equipment. This mobile classroom would be accompanied by a certified welder
as an instructor. Our students could then learn welding theory by mail and
then put theory into practice when the mobile classroom was in their part of the
country," he explained.
Home study, Christensen feels, is also a logical vehicle for
company-sponsored training programs, so valuable in the development of employee
potential. "At ASI we are forecasting that a far greater share of our business
will come from industry by 1977," stated Christensen.
Advance Schools, with over 72,000 active students, also offers home-study
courses in such "white-collar" skills as general office, bookkeeping and
accounting. "A good many enrollments in these areas are from housewives whose
children are in school all day and who want to supplement their family income.
Many of these women are using these new skills to help their husbands manage
small businesses. Another large segment wants to be able to keep better track
of family finances when they are responsible for the family's bill paying and
income-tax preparation," he said.
#
#
#
NEWS
from Advance Schools, Inc.
For: Advance Schools, Inc.
Marketing Communications Dept.
5900 Northwest Highway
Chicago, Illinois 60631
(312) 775-8585
FOR IMMEDIATE RELEASE
CAREER GOALS REACHED
THROUGH HOME STUDY
Students are helped to meet their career objectives by investing
their money, time and effort in completing their educations through guided,
independent study at home. This was the major conclusion of an audited survey
of graduates of Advance Schools, Inc. (ASI).
"Most people enroll in a home-study course for one of five reasons,"
said S. T. Christensen, board chairman of Advance Schools. "They seek to
learn a completely new skill or trade, they want to upgrade their occupational
skills, or they want to supplement their income with part-time employment.
Other home-study students want to become self-employed or move to higher
level positions within their existing occupations."
Advance Schools, one of the largest privately-operated home-study
schools in the United States, recently mailed questionnaires to more than
27,000 graduates of its four major courses of study. Designed to determine
if their ASI training had helped them achieve their objectives, the survey
was answered and returned by 39.9 per cent of the graduates.
(more)
-2-
"The end result of any type of vocational training is most often
measured in terms of gainful employment," said Christensen. A total of
7,911 survey respondents reported that they had attempted to find employment
in work relating to their ASI training. The survey revealed that 6,818 of
these graduates -- 86 per cent -- were employed in work related to the field
of their ASI training. The other 1,093 survey respondents were not yet
successful in their employment attempts. This number includes those who
were already employed in a training-related field and upgrading their skills,
as well as those who entered a new field because of their ASI training.
Nearly 44 per cent of the 11,175 graduates responding to the survey
said that they had enrolled in home-study courses because they wanted to learn
a completely new skill or trade. Of those who sought this goal, 68 per cent
reported that they had put to use the new skills they had learned from their
ASI training.
Another 15 per cent of the respondents said that upgrading occupational
skills was their primary reason for home study. According to survey results,
76 per cent of these graduates reported that this goal had been achieved and
that their ASI training had been of help in upgrading their skills.
Supplementing their income with part-time employment was selected as
the primary reason for home study by 12 per cent of the graduates responding.
According to the survey, 71 percent of the graduates who sought this goal
reported that they found part-time employment in work related to their field
of home-study training.
(more)
-3-
Almost 4 per cent of the graduate respondents indicated that their
motive for home study was to move to a higher-level position within their
occupation. Fifty-three per cent of these graduates reported positive
results and that ASI training was important in their move up.
The remaining 19 per cent of the graduates responding indicated a variety
of other reasons for enrolling in home-study courses. Of these, 86 per cent
felt that their ASI training would be valuable in seeking work if something
happened to their present job.
"The typical student who enrolls for ASI training is a highly-motivated
individual, who takes his studies and responsibilities seriously," according
to Christensen. "The majority of our students complete their lessons, are
graduated and will, I believe, attain the primary goals they set when they
enrolled," he concluded.
# # #
NEWS
from Advance Schools, Inc.
For: Advance Schools, Inc.
Marketing Communications Dept.
5900 Northwest Highway
Chicago, Illinois 60631
(312) 775-8585
HOME STUDY SCHOOLS: CON GAME OR TRAINING RESOURCE?
Remarks by S. T. Christensen
Chairman, Advance Schools, Inc.
The title of a recent editorial series on the vocational training
industry -- "Home-study schools: con game or wave of the future?" -- illustrates
well, I think, the great confusion existing today about the industry with
which I've been associated for the past 37 years.
Today, I'm going to bring you up to date on the state of the "correspondence"
school business from my point of view. I believe strongly that guided,
independent study at home by mail is an effective way of learning. In many
cases, it is the only practical way for those who must continue to earn a
living while studying in their spare time.
My company, Advance Schools, Inc., is one of more than 150 accredited
member-schools of the National Home Study Council. These member-schools
have a combined enrollment of 1.5 million students who are taking some 500
courses of home study.
(more)
-2-
The total industry is much larger, and the non-accredited sector is
the breeding ground for many of the public relations problems facing our
business today. The Federal Trade Commission, in its consumer education
program, says that there are about 10,000 private trade, technical, business
and correspondence schools in the United States. Together, they have an
enrollment of about 3.2 million students who spend close to $2-billion
a year on proprietary, vocational school courses. I've seen estimates
even higher, saying that vocational education has become a $2½-billion
annual business.
One reason for confusion about the size of our industry is the whole
area of financial reporting. There simply are no existing, consistent
reporting avenues open for the sharing of information. In a nutshell --
everyone's guessing.
Learning at home is not a new educational development. Ben Franklin
and Abe Lincoln both were men who educated themselves at home. But the real
emergence of home study or correspondence study as a formalized educational
technique began in the late 1800's.
Today, the home-study business is booming for a variety of reasons.
Stacks of studies point out the urgent need for training young
workers for the nation's technical industries. With the coming of
the second car, the second or third television set and the air-conditioned
bedroom in many homes, the need for skilled tradesmen to keep this equipment
in operation becomes greater. We're finding that many retired folks are
taking home-study courses to keep their hands and minds busy, and women
are turning to home study, to brush up on skills or to learn new ones.
(more)
-3-
We've found that most people enroll in a home-study course for one of
five reasons. Primarily, of course, they want to learn a new skill
or trade. Others want to upgrade their present skills or supplement
their income with part-time jobs. Other students want to go into business
for themselves or move to a better job within their own profession.
The industrial market is another growth area for us. Home study
satisfies management's demand for practical results without high training
costs. Its integration with both the one-person, and large-staff, training
and development unit makes practical sense.
My company also sees great promise in home-study training for the
vocational rehabilitation of the physically handicapped and prisoners.
Here's a story that may be interesting to you.
The sister of a Bismarck, North Dakota, prison inmate asked one of
our men to approach the prison's educational counselor about allowing the
inmate to enroll in our electrical course. The inmate's sister had taken
a home-study course with us and had recommended it to her brother.
Two major problems stood in the way. First, inmates are not allowed
to have money or to enter into contractual agreements. Second, educational
budgets in Bismarck Prison are tight, and funds for independent studies
are not available.
At the same time, the fact is that about two-thirds of the inmates who
leave prison without learning a skill return, while the skilled-inmate
return rate is 15 per cent. Prison officials estimate that it costs about
$10,800 to confine one man in prison for one year.
(more)
-3-
We've found that most people enroll in a home-study course for one of
five reasons. Primarily, of course, they want to learn a new skill
or trade. Others want to upgrade their present skills or supplement
their income with part-time jobs. Other students want to go into business
for themselves or move to a better job within their own profession.
The industrial market is another growth area for us. Home study
satisfies management's demand for practical results without high training
costs. Its integration with both the one-person, and large-staff, training
and development unit makes practical sense.
My company also sees great promise in home-study training for the
vocational rehabilitation of the physically handicapped and prisoners.
Here's a story that may be interesting to you.
The sister of a Bismarck, North Dakota, prison inmate asked one of
our men to approach the prison's educational counselor about allowing the
inmate to enroll in our electrical course. The inmate's sister had taken
a home-study course with us and had recommended it to her brother.
Two major problems stood in the way. First, inmates are not allowed
to have money or to enter into contractual agreements. Second, educational
budgets in Bismarck Prison are tight, and funds for independent studies
are not available.
At the same time, the fact is that about two-thirds of the inmates who
leave prison without learning a skill return, while the skilled-inmate
return rate is 15 per cent. Prison officials estimate that it costs about
$10,800 to confine one man in prison for one year.
(more)
-4-
Our man approached local service clubs with the idea, since keeping
people out of prison and in useful positions not only benefits the well-being
of the former inmate and the community as a whole, but also cuts down on
the amount of money needed to run the prisons.
A local Lions Club agreed to sponsor the inmate. The program is being
expanded, and during the first six months of this current pilot project, we
hope to enroll from 20 to 40 club-sponsored students from the inmates at
Bismarck Prison.
We've been fortunate to have participated in other inmate
release/employment programs across the United States. Last year, working
with the Illinois Jaycees, we helped train 310 inmates released from
Stateville Penitentiary. Through local service clubs across the country,
we plan to work with local and state self-help organizations in giving
ex-offenders an alternative to crime.
But the biggest share of the home-study market is made up of veterans.
On reason for this is that many of them took government-sponsored correspondence
courses while they were in the service; another is the G. I. Bill.
Our industry has come under some heavy criticism because of the
importance of this veterans' market.
We feel that much of that criticism has been misdirected. After all,
young veterans make up a significant segment of the population to whom
home study is an important educational alternative. It's the abuse of these
veterans' rights by certain unethical schools to which criticism should be
leveled and to which we also strongly object.
(more)
-5-
We employed a leading certified public accounting firm to supervise
and audit a survey of more than 27,000 graduates of our four major courses of
home-study. We wanted to find out if ASI training had helped them reach
their career objectives. We got nearly a 40 per cent response to our
survey from all types of students. This response from a survey is way above
the industry average. A summary of the results is in your information kits.
But here's what we learned specifically about our students who are veterans.
Of those graduates who responded who had taken their ASI training
under the G. I. Bill who had tried to get a job, 86.7 per cent were employed
in work relating to their ASI training.
That's a significant number, and one that we feel is a strong rebuttal
to those who blindly criticize the industry for its veteran market. Home study
is working in providing veterans with job skills that are useful and
marketable.
A good share of the success of all our students is because we look
for the highly-motivated individual who takes his studies and responsibilities
seriously. Home study is a hard way to learn. It takes determination to
do your lessons after you've worked a full shift that day. However, our
records show that of every 100 students who begin the ASI program, 51 will
complete their course of study.
This high completion rate is directly due to our rather unique marketing
procedures. We don't enroll every student who wants to take an ASI course.
Last year, we enrolled over 73,000 students, but we also rejected a number of
other prospective students who just didn't measure up to our standards.
(more)
-6-
The industry's biggest public relations headache in our era of consumer
protection is the fast-talking, commission salesman who promises prospective
students the moon in order to make a sale. Our school has combatted the
"hard sell" by being the first home-study school to pay its full-time salesman
a salary rather than a commission. Our people are judged on the quality of
students they send us, not just the number. As far as obtaining jobs for
students, no ethical home-study school should ever promise jobs for its
graduates.
The Federal Trade Commission has published some suggestions on how to
select the right vocational school. A copy of the FTC pamphlet is in your
kits. By the way, I agree with most of the FTC check list. However, if
my best friend asked me what to look out for, here's what I'd advise,
before he puts his signature on the dotted line.
First, determine your own career objective. Do you want to learn a
completely new skill or trade, or do you want to upgrade your job skills?
Is your goal to supplement your paycheck with part-time income, or do you
want to go into business for yourself?
Second, ask friends who have studied at home by mail how they would rate
the courses they took. The top-notch correspondence schools enroll many of
their students through referral from their graduates. If your friend had
a bad experience, he is not likely to send you down the same path.
Next, write or telephone the schools which your friends recommend.
Ask for copies of their course catalogues and any other descriptive information
about actual content of the lessons, home-training kits and audio-visual
training.
Study the catalogues carefully. See if the course offerings will
actually help you in reaching your career objectives.
(more)
-7-
Select a home-study school which is accredited by a nationally-recognized
accrediting agency and which has sales representatives in your vicinity.
Ask the school you are considering for the names and addresses of recent
graduates in your city or nearby area. Ask these graduates for their
evaluation of the school's courses and student services. Any reputable
home-study school will be glad to provide a graduate list.
Investigate the school's reputation by contacting your Better Business
Bureau, your state's department of public instruction and the National Home
Study Council in Washington, D.C.
If you are a veteran, check with your Veterans Administration office
to determine if your G. I. Bill benefits are still in effect. Many home-study
courses have been approved for 90 per cent tuition reimbursement for
eligible veterans and servicemen by the Veterans Administration.
Carefully read and understand the school contract before you sign it.
Federal law requires a three-day cooling-off period during which you can still
back out of the contract. Advance Schools permits the student to cancel the
agreement at no tuition cost or financial obligation any time before completing
the first lesson. This may be as long as 30 days after signing the application.
Even if the student quits after beginning the course, we charge him on a
modified pro-rata basis, based on number of lessons completed, plus a minimum
service charge. In addition, Advance Schools requires the prospective
student to reaffirm in writing his intention to enroll.
(more)
-8-
Finally, ask yourself if you are really going to have the determination
to finish the home-study course. A successful course of study at home by
mail depends as much on your discipline and ability as it does on the course
materials and student services. The school provides you the opportunity to
meet your career objective, but it is you who must take advantage of it.
I believe in home study. In many cases it's the only road open for the
motivated person bogged down in a dead-end job. The man or woman employed
in shift work simply can't attend regularly scheduled day or night classes
at a residential trade school. Another portion of our more than 72,000
active students don't live within commuting distance of a trade school.
Even if they do, the school's curriculum may not match up with their career
objectives.
From experience, we've found that the student most likely to succeed in
a program of vocational home study has been out of high school for several
years. That's long enough for him to have determined a realistic evaluation
of his interests, abilities and career goals. To qualify for one of our
courses, the prospective student must have a high school education or the
equivalent.
It's a shame, but at present, home study can't train our country's
illiterate. That's because it requires that the student be able to read.
We've experimented with a test project out in California to get around this
problem, but we just weren't successful in avoiding the issue that basic
reading-comprehension skills are a pre-requisite for most home-study courses.
However, for millions of Americans with real motivation and a desire
to improve, home study is making a real contribution. Private vocational
schools are an important part of this country's post-secondary education
needs. I believe they are the wave of the future.
#
#
#
NEWS
from Advance Schools, Inc.
FOR: Advance Schools, Inc.
Marketing Communications Dept.
5900 Northwest Highway
Chicago, Illinois 60631
(312) 775-8585
FOR IMMEDIATE RELEASE
A 10-POINT CHECK LIST
FOR HOME STUDY COURSES
Each day more people join the estimated 3.2 million Americans already
enrolled in private vocational training courses. If you are planning to be
among these growing numbers, here are 10 suggestions from S. T. Christensen,
Chairman of Advance Schools, Inc., on what to look for in a home-study school.
1. Determine your career objective. Do you want to learn a
completely new skill or trade, or do you want to upgrade your job skills?
Is your goal to supplement your paycheck with part-time income, or do you
want to go into business for yourself? Maybe you want to move to a better
job in your present occupation.
2. Ask friends who have studied at home by mail how they would
rate the course they took. Find out if they finished their courses. The
top-notch correspondence schools enroll many of their new students through
referral from their graduates. If your friend had a bad experience, he is
not likely to send you down the same path.
3. Write or telephone the schools which your friends recommend. Ask
for copies of their course catalogues and any other descriptive information
about actual content of the lessons, home-training kits and audio-visual
training.
4. Study the catalogues carefully. See if the course offerings will
actually help you in reaching your career objective.
(more)
-2-
5. Select a home-study school which is accredited by a nationally-recognized
accrediting agency and has sales representatives in your vicinity.
6. Ask the school you are considering for the names and addresses of
recent graduates in your city or nearby area. Ask these graduates for their
evaluation of the school's courses and student services. Any reputable
home-study school will be glad to provide a graduate list.
7. Investigate the school's reputation by contacting your Better
Business Bureau, your state's department of public instruction, and the
National Home Study Council in Washington, D. C.
8. If you are a veteran, check with your Veterans Administration
office to determine if your G. I. Bill benefits are still in effect. Many
home-study courses have been approved for 90 per cent tuition reimbursement
for eligible veterans and servicemen by the Veterans Administration.
9. Carefully read and understand the school contract before you
sign it. Federal law requires a three-day cooling-off period during which you
can still back out of the contract. Even if you quit after beginning
the course, Advance Schools charges you on a modified pro-rata basis.
based on number of lessons completed, plus a minimum service charge.
Advance Schools, Inc. also requires that the prospective student
reaffirm in writing his intention to enroll and allows the prospective
student to cancel the agreement at no tuition cost or financial obligation
any time before completing the first lesson.
(more)
-3-
10. Ask yourself if you are really going to have the determination
to finish the home-study course. A successful course of study at home by
mail depends as much on your discipline and ability as it does on the
course materials and student services. The school provides you the
opportunity to meet your career objective, but it is you who must take
advantage of it.
Finally, Mr. Christensen advises, be certain you follow these
10 suggestions before you sign your name to the dotted line.
#
#
#