School's over

The closure of School of Applied Studies leaves 300 students stranded, citing 'financial difficulties'.

ON WEDNESDAY at 4am, the Council of Private Education (CPE) received an e-mail from the School of Applied Studies (SAS).

It stated that the private school had decided to cease operating due to "financial difficulties" over the last eight months.

The e-mail also had the school seeking the CPE's assistance to place its students at other private education institutions (PEIs).

This is the first time a PEI has closed down since the CPE was set up.

The CPE was formed in December last year to impose tighter regulations on the local private education industry.

This was done to raise standards and to protect students who might be left stranded and scrambling to get their money back should a PEI close down without warning.

The closure of the SAS has left 300 students stranded, 85 of whom are international students on student passes.

The school specialised in diplomas in Psychology, Hospitality Management and Business Studies.

Its diploma in Hospitality Management is academically consulted by the Lausanne Hotel School, while the rest of the diplomas are its own.

Students whom The New Paper spoke to said that their first suspicion that the school was in trouble came in the form of a text message from the school on Monday.

"Three hours before my lesson was due to start, I was told in an SMS that the school was undergoing renovation. That was very odd," said Mr Louis Ooi, 24, who is currently unemployed.

He was later informed that the CPE and the SAS would jointly hold a briefing for affected students on Wednesday evening.

The briefing, which was held at the school's premises at Park Mall, was attended by more than 100 students.

When The New Paper went to the SAS's premises on Wednesday night, the place was in disarray, with books, papers and stationery scattered all over the school's front counter.

During the briefing, students were told how to claim their outstanding course fees from insurance companies, and were given a list of options to other PEIs.

But even so, many were dissatisfied and surrounded the SAS's CEO, Mr Jeremy Low, after the briefing ended.

Voices were raised, tempers flared and explanations were demanded from him.

When the last student left the school's premises at about 10pm, The New Paper spoke to a tired-looking Mr Low.

He claimed that he owed the landlord three months' rent and that he sold his condominium apartment for $950,000 to pay off his debts.

He said he currently still owes the bank about $200,000.

"It wasn't supposed to be like this. I started the school on such a good note, and now..." he said, his voice trailing off.

Mr Low said this is his first time setting up a PEI.

He claimed that the school was registered last year and started operations in January the same year.

When the school first started, Mr Low said he managed to "collect a little pot of gold" after receiving payment from students to start their courses at the school.

Mr Low said things were going well, until the CPE was formed.

Cashflow problems

He started experiencing cashflow problems from January this year onwards and blamed the CPE's student protection measures for this.

Under the CPE's measures, the SAS is allowed to collect only up to six months' worth of fees in advance, if the industry-wide fee protection insurance to cover the fees paid by students has been procured.

"This measure has been put in place precisely to safeguard students' interests in case a PEI closes," said the CPE spokesman.

Mr Low said that because he could not collect payment for one-year courses in full, students ended up dragging their feet when it was time to pay the balance of their course fees.

"I started to lose that little pot of gold," he said.

The SAS also failed to be awarded the EduTrust Certification and could not run some of its diploma programmes.

"I was told that my programme was not good enough," said Mr Low.

The CPE spokesman said that as regulatory standards were raised under the new Private Education Act, PEIs would "need to make certain adjustments to comply with the higher requirements".

Added the spokesman: "It may be inevitable that some PEIs may face difficulties in making the transition."

From February onwards, Mr Low said he took loans amounting to more than $1 million to keep his business afloat.

He claimed he spent a lot of money to promote the school at the career fair in March but didn't get the desired results.

On June 30, his licence to recruit foreign students expired.

At this point, the SAS had an operating cost of about $130,000 a month, but a revenue of only $30,000 a month, he said.

So Mr Low started looking for investors.

"I managed to find one in September, who was willing to pump in $6 million to help me, but he backed out suddenly.

"That's when I knew I could no longer hold on to the business," he claimed.

He added that students were told of the school undergoing "renovation" for two weeks because he wanted to buy time to settle matters.

When contacted, the CPE spokesman said that the body had intervened to help affected students following complaints from students that the SAS had "suddenly announced an unscheduled 14-day term break" and upon finding the SAS's premises locked.

Since the CPE was formed, 195 PEIs have been granted registration under the Enhanced Registration Frameworkfor the private education sector.

Another 115 PEIs are currently undergoing evaluation.

Students from the SAS with further queries may contact the CPE Student Services Centre at 6592 2108 or e-mailCPE_CONTACT@cpe.gov.sg

Bryna Sim | The New Paper | Sat Oct 23 2010