Two KGIC schools in Toronto close their doors
Published 02/03/2017
A language school and one campus of a private career college operated by KGIC group in Canada have closed this week. More than 150 students from the two Toronto-based schools, Cornerstone Academic College and Upper Career College of Business & Technology Toronto, are in the process of transferring to alternative schools in the area.
The company is also expected to see more closures in the coming weeks as part of a restructuring effort by BDO Canada and Sprott Shaw Degree College Corp, which were placed in charge of operations in January, when KGIC was placed into receivership.
UCCBT, a private career college that also operates in Vancouver, had its Toronto campus shut down on March 1 by the Ontario Ministry of Advanced Education and Skills Development.
“Languages Canada is working with the receiver and the government to ensure students are able to complete their studies”
There are thought to be between 100 and 200 students studying at UCCBT Toronto.
However, students’ tuition fees are protected through Ontario’s Training Completion Assurance Fund, and they have been offered the opportunity to continue studying at another college in the area.
UCCBT also offered students the option of transferring to its Vancouver campus.
In a letter sent to partner agencies on March 1, UCCBT’s brand director, Scott Bradbury, said the school would provide $1,000 tuition credit for transferring students.
“We hope that this offer allows you to assist your student with the airfare and moving costs associated with transitioning to UCCBT Vancouver or KGIBC Vancouver,” he wrote.
However, Jorge Lacerda, founder and director of Express International Education & Careers, who had sent seven students to UCCBT Toronto and has three more waiting for visas, contended: “They know the students are not going to move to Vancouver.”
“Who would send their students to an institution that just shut down two schools within a week?
“The trouble that the agents are going through – our reputation’s in jeopardy,” he told The PIE News. “I have to look after the best interests of students.”
The school had been slashing prices for months in the hope of attracting more students, Lacerda said. “And they extended and they extended and they extended it again until last week.”
On one price list circulated to agents, a $10,400 business administration course had been marked down by a third to $7,280, while shorter courses had been discounted by up to $1,500.
Meanwhile, a second KGIC school in Toronto, Cornerstone Academic College, also closed this week.
Forty-nine students have been affected by the closure of the language school, according to Gonzalo Peralta, executive director of Languages Canada.
It will place students in another school through its Languages Canada Education Completion Assurance Program by Monday, March 6.
The association has contacted its schools in Toronto, and many have already offered places to the affected students, Peralta said.
“We are very sorry that students have been impacted by this event, and promise to move quickly in order to minimise impact on them,” Peralta told The PIE News.
“We are working with regulators closely to ensure procedures are being followed, and the process will be done in an orderly manner”
“Languages Canada is working with the receiver and the Ontario government to ensure students are able to complete their studies at another Languages Canada member programme.”
KGIC, which has 18 school campuses across British Columbia and Ontario, has been struggling financially over the last two years, with revenue declining consistently over that time. Cornerstone’s Vancouver campus closed in September 2015, along with two other KGIC campuses.
And in its most recent financial statement, the company reported a net loss of $1.7m for the third quarter of 2016, along with adjusted negative EBITDA of $1.35m.
The company was placed into receivership in January, after a financial entity owned by CIBT Education Group bought and demanded repayment of $12.3m of the school’s debt.
BDO Canada was appointed the official receiver overseeing the restructuring and likely sale of KGIC. Sprott Shaw Degree College Corp, another subsidiary of CIBT, was placed in charge of its day-to-day operations.
Speaking with The PIE News, Toby Chu, president and CEO of CIBT, said KGIC may face more closures, but that “students will not be adversely affected”.
“We are working with regulators closely to ensure that the transfer procedures are being followed, and the process will be done in an orderly manner,” he said. “In most cases, several schools are being consolidated into one, not eliminating all the schools in its entirety.”
“Had the original secured creditor (the bank) taken its action on January 25 instead of CIBT Group, I would imagine that a financial institution’s approach would be quite different than ours,” he added.
The PIE News has reached out to Cornerstone Academic College and KGIC for comment.
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