The collapse of coding bootcamp Codeup marks the second closure of a for-profit school that was included in the approved training catalog for Ready to Work, the City of San Antonio’s $200 million taxpayer-funded workforce development program.
The first, Quest College, closed suddenly at the end of 2022. At the time, it did not have any students enrolled from Ready to Work.
But Ready to Work did have participants enrolled at Codeup when the school closed abruptly on Dec. 28. Ready to Work had paid Codeup roughly $25,000 to defray the cost of tuition for 13 students, but the school closed before they completed their certificate programs.
Now Ready to Work is helping those students find alternatives to complete their studies, and all will get job placement help through the program. Ready to Work also will grant them up to $5,000 each in additional tuition assistance, should it be necessary.
City officials say the outlay of additional public money to help these students is a small price to pay for the opportunity that for-profit schools offer, and that there is a place for them in the universe of publicly funded workforce development alongside public options offered by the Alamo Colleges District and UTSA.
“San Antonians seeking a better job aren’t judging our partners on the basis of whether they are for-profit or nonprofit organizations, and we don’t either as long as the organizations provide the job training our residents need and meet the demands of the program,” said Mayor Ron Nirenberg in a statement.
Codeup’s sudden collapse “underscores the reason we need to assess the risks of every provider — for-profit or nonprofit — and minimize the risk should this type of event occur,” he stated. Part of Ready to Work’s ability to mitigate that risk, he said, is having a diverse portfolio of providers.
More flexibility, higher cost
Hundreds of Ready to Work participants have received tuition assistance to enroll in other for-profit schools. Galen College of Nursing and ACI Learning are listed among the program’s top 10 most-utilized training providers, and together have enrolled more than 550 Ready to Work participants since the program began enrolling participants in 2022.
Several other for-profit schools and training programs enroll Ready to Work participants, including Southern Careers Institute, which has two San Antonio campuses; a Colorado-based distance learning company listed as “Weston Distance Learning Inc/U.S. Career Institute (USCI)” and The Institute of Allied Healthcare, which opened in 2015 and trains nurses aides and medical assistants.
These schools and others like them offer training programs that are also offered by public institutions like the Alamo Colleges District (ACD) and UTSA, but are often 2-3 times more expensive. For example, a pharmacy tech certificate through Southern Careers costs almost $18,000; a similar program at Alamo Colleges is just over $3,000.
Mike Ramsey, executive director of the city’s Workforce Development Office overseeing Ready to Work, said for-profit schools can offer benefits like a shorter or more flexible program, making them attractive to certain participants. They also increase workforce training capacity beyond programs offered by public institutions like Alamo Colleges and UTSA, both of which also have enrolled hundreds of Ready to Work participants.
“There’s always going to be this argument that training providers and colleges that are for-profit in nature are putting students at risk, especially if they have to take out student loans to get their education and training paid for,” Ramsey said. Ready to Work includes counselors who can help participants decide “what’s going to be the best return for their investment.”
Students at risk
Research shows that students who enroll in for-profit schools take on more debt and are more likely to default on their student loans, according to a report by the Federal Reserve Bank of New York, which also found that for-profit enrollment
“leads to a lower likelihood of being employed and lower labor market earnings” than students at public institutions.
These schools often target low-income Black and Latino students, who end up overrepresented at for-profit schools and are more likely to default on their loans.
Ready to Work isn’t the only job training program in San Antonio to accept the risks of subsidizing tuition at for-profit schools for its participants.
Project Quest, which has been doing workforce development in San Antonio for the past 32 years, and was a model for Ready to Work, also partners with Galen College of Nursing, said Francisco Martinez, the nonprofit’s chief development and community relations officer. It still sends the majority — about 70%, he said — of its participants to the Alamo Colleges’ nursing program at St. Philip’s College, but he said for some participants, Galen makes more sense, despite its higher price tag.
Galen, which is owned by health care giant HCA, has more flexible requirements around prerequisites, Martinez said, and its programs can often be completed more quickly. The St. Philip’s program “may take you longer to complete and get into the workforce, which sometimes can be a barrier to success,” he said. “We do our best to support our participants.”
Both Ready to Work and Project Quest cap the amount of tuition assistance they offer, meaning students who choose for-profit programs over cheaper options are often on the hook for large loans.
That was the case with Codeup students whose tuition wasn’t covered by Veteran’s Affairs benefits like the G.I. Bill or other programs.
That for-profit school’s sudden demise shocked students, but such closures are becoming more common.
Last fall, the Art Institute of San Antonio, one of a collection of for-profit colleges with campuses around the country, abruptly shuttered after decades of operation, throwing hundreds of local students’ futures into disarray.
Quest College, which began in 1995 as Career Quest (and is not related to Project Quest) shuttered just a week before many students were set to graduate and laid off 50 employees.
In 2018, two Brightwood College campuses in San Antonio closed after lost accredition, and in 2016, Career Point College, which blanketed San Antonio with its “Thanks, Career Point!” commercials for years, abruptly shuttered its three locations in San Antonio.
Ready to Work’s Ramsey said that for now, the program will remain “agnostic” to schools’ tax-exempt status, but said participating providers will be evaluated based on performance data.
“At the end of the day, we just want to make sure we’re helping participants make an informed choice to achieve their goals,” he said. “The Codeup closure was unfortunate, but now our main priority is making sure those 13 students are taken care of.”
