Lon Morris College announced Friday it will suspend the fall semester after learning it will lose its federal student aid.
About 100 students were expected to attend Lon Morris in the fall, and now other East Texas community colleges are stepping in to help accommodate them.
The oldest junior college in Texas, which filed for bankruptcy in July, is continuing to look for a purchaser or financial partner as it tries to recover from financial problems.
Several institutions have expressed interest in making the school a branch campus, Dawn Ragan, chief restructuring officer for Lon Morris, said Friday.
Some Texas public colleges have indicated a “high degree of interest” but can't act until January because they need legislative approval, Ms. Ragan said.
Lon Morris may try to extend the process to include them.
Friday's announcement about fall classes comes days after a bankruptcy court denied the college's request to keep the U.S. Department of Education from revoking federal financial aid funds solely because of its bankruptcy.
The U.S. Bankruptcy Court, Eastern District of Texas, disagreed with the department's policy but held, “It was within their power to terminate financial aid,” according to a news release.
Ms. Ragan said Bankruptcy Judge Bill Parker called the department's decision a “knee-jerk reaction” and “bad policy” but could not rise up against department regulations.
Because the college won't have students enrolled in the fall, it is effectively working to sell real estate rather than operate business, Ms. Ragan said.
Plans for the spring are yet to be determined until there is more discussion with creditors and investment bankers, she said.
Tyler Junior College Provost Dr. Homer Hayes said TJC is contacting 12 to 14 students by phone or email to let them know they can come to campus Monday and, depending on where they are in their studies, TJC will try to put them in a regular schedule to the best of its ability. Staff is being asked to give the students priority.
“We've said all along we would help how we can …” Hayes said.
“It's disappointing they weren't able to continue. A lot of their students were dedicated to Lon Morris and wanted it to be successful.”
Jacksonville College spokesman Dr. David Heflin said the school also is contacting students and doing everything it can to accommodate them and speed up the admission process.
Jacksonville College President Dr. Mike Smith sent an email to employees asking for cooperation as Lon Morris students possibly enroll.
“We need to continue to pray for the Lon Morris employees and the Lon Morris students in transition,” he wrote.
Heflin said Jacksonville College, which began classes Thursday, enrollment already is looking healthy, and the college is shooting for about 500 students as it works to grow slowly and steadily. The institution is fixing up the residential housing to use until it can construct a new residential facility.
“Everything at this point is real well here. We have extra faculty, (and) we're getting quality students from our new sports, tennis and golf …” Heflin said. “Anybody that can help (new students from Lon Morris), we'll all bend over backwards so they won't miss too much time (in class).”
“I went to the school and I liked it. It's hard to see” this happen, he said.
“It's hard for staff to go through it, not knowing if they had a job, (and) it's kind of crazy on families.”
But he said he thinks this could be a good opportunity for the college to come back strong and is pleased that other colleges are helping out.
“I wish Lon Morris the best. I enjoyed my time there. It was my first college experience,” he said.
Lon Morris filed a voluntary chapter 11 bankruptcy petition in July after bleeding millions of dollars since at least the 2007-08 school year, when college representatives say the school embarked on a costly plan to grow enrollment.
As it tried to expand, it took on almost $20 million in debt to finance its expansion, according to a news release.
The Board of Trustees brought in Bridgepoint Consulting in May to help with reorganization. According to a news release, Bridgepoint, promptly cut costs and worked to help the school recover. Because of pressure from creditors, including threatened termination of utilities and a posted foreclosure, the school sought bankruptcy protection, the release states.
Officials said Lon Morris intends to continue working with its investment bankers, Capstone, to find a partner.
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