The Pennsylvania School of Business (PSB) in Allentown will close it doors early next year. The main culprit behind the shutdown is elimination of some Federal Student Aid (FASFA) programs to students who lack a high school diploma.
The for-profit education center will lose about half of their students this year with the changes in lending policies, which started in July of 2012. With PSB's future enrollment plunging, the school decided to close in January of next year after the 2013 fall semester ends,
As part of student loan reform package that saw the nation's education loan centers struggling with high numbers of individuals unable to pay off their debt, adjustments were needed to to limit defaults. The reduction in Pell grants and programs aiding students under the"ability-to-benefit" designation was particular devastating to the business school, which had swelled enrollments by catering to that niche segment of the market.
Locally, many in the administration are dismayed because they believed the school helped these students better their lives; nationally, no ground was being gained in students paying off these loans and the only the for-profit colleges.were truly benefiting..
The money being spent on educating those disadvantaged by not having a traditional high school diploma was not translating into garnering better jobs. Unfortunately when the desired income is not achieved through higher education, many students become unable to pay back the money, resulting in the higher loan defaults.