After 50 years Twin Cities-based beauty school closes all 79 locations

A longtime Twin Cities-based beauty school abruptly closed all of its 79 locations, including five in Minnesota, this week, shocking students and stranding some of them only days before graduation.

Regency Beauty Institute, with headquarters in St. Louis Park, announced the sudden closing on its website late Wednesday, saying: "It is with great sadness that we announce that after more than 50 years of educating cosmetology students, Regency Beauty Institute is permanently closing on September 28, 2016."

Regency is the latest in a series of for-profit trade schools to close in recent months.

As of last year, the school had 430 Minnesota students at locations in Blaine, Burnsville, Duluth, Maplewood and St. Cloud.

The school gave several reasons for the decision, including lost revenue, falling enrollment and a "negative characterization of for-profit education by regulators and politicians that continues to worsen." Officials at Regency's headquarters could not be reached for comment.

On Thursday afternoon, dozens of students showed up at the school's Burnsville location to collect their belongings and commiserate with teachers and staff.

"It was actually kind of devastating," said Katie Madoll , who said she learned of the closing on Facebook. "I'm 12 days from graduation."

State regulators say they, too, were caught by surprise, even though they knew Regency had been struggling financially. "They've had huge financial losses due to declining enrollment," said Betsy Talbot of the Minnesota Office of Higher Education.

Talbot said her office was working, along with Regency, to arrange for alternative schools to take Minnesota students. She said they may also be eligible for tuition refunds or federal loan forgiveness.

At Regency's Burnsville location, some students were in tears as they waited for the doors to open for a two-hour window when they were permitted to collect their equipment.

"It just feels like a funeral," said Francine Anderson, who graduated last month and came back for "all my paperwork."

Blanca Guaman, a mother of four, said she still has three months to go in the yearlong cosmetology program, which cost $19,000. "The crazy part [is] that I paid them in full," she said. Now she worries how she'll be able to afford to finish elsewhere.

They found few answers from the staff and teachers, who also said they were caught off guard.

Talbot said that Regency, like many for-profit trade schools, faced a double threat from falling enrollment and tightening federal regulations, which potentially could have cut off its access to federal student aid.

Under what's known as the "gainful employment" rule, for-profit schools can lose federal funding if their students don't make enough money to pay off their student loans. "I think most career training programs are going to have problems" meeting that standard, Talbot said.

On its website, Regency blamed heightened scrutiny of the for-profit education industry for its "inability to obtain continued financing."

Regency emphasized in its announcement that it has not been accused of any wrongdoing. "We held ourselves to high educational and ethical standards," the company said. "The environment is simply not one that allows us to remain open."

This has been a rough year for for-profit schools in Minnesota. Le Cordon Bleu and ITT Technical Institute both closed their Minnesota campuses as part of a national shutdown. State officials also took steps to close Globe University and Minnesota School of Business after a court ruled that the two schools had committed fraud. They have appealed and continue to operate.

Last week, the federal government severed ties with the largest accrediting body of for-profit institutions, the Accrediting Council for Independent Colleges and Schools. That decision will force Globe, the Duluth Business University and several other Minnesota schools to find a new accreditor or close within 18 months.

Maura Lerner • 612-673-7384

Paul Walsh • 612-673-4482