Ex-officials flagged problems at Shaw College

Shaw College was one of the oldest and most venerable names in the career-college business before it slid into bankruptcy in 1999.

The school, founded as Shaw Business College in 1892, provided secretarial and business training to generations of Canadians. But it began to slide after the Shaw family sold the Toronto-based school in 1990.

James Garrow, appointed president of the college in November of 1995, said he left after working there only six months because many students were defrauding the government.

Many of the students enrolled at the college received student loans. But when they got their money, they stopped going to class, Mr. Garrow said in an interview from his home in Guelph, Ont.

"I walked away from Shaw after I saw what was up."

Mr. Garrow said more than 200 students were enrolled at Shaw during his brief tenure. But on any given day, only 40 to 50 students would be in class, he said.

Shirley Brush, registrar of the college at the time, also saw that many students were not showing up for classes.

The student loan money from the Ontario government was paid directly to the school, and Ms. Brush would allocate a chunk to students in the fall and another in the spring, she said. "Once they got their money, they were gone, they were history."

She resigned at the same time as Mr. Garrow.

Jim Estill, who was among the investors in a Guelph-based company called Mentors With Money Capital Corp., which owned Shaw at the time, defended the school.

"Was Shaw a scam? Absolutely not. Shaw was a legitimate school that tried hard to be a good educator."

Mr. Garrow said he discussed the problem with the school's owners, as well as with an official at the Ontario Ministry of Education.

When he was about to resign, he said, he called the official and suggested things were "not on the up and up."

He said he made sure the ministry official understood he was willing to provide him with a complete accounting. "But that was the end of it. No one ever contacted us."

Dave Ross, a spokesman for the Ontario Ministry of Education, said, "I can't comment on the case at all."

According to information on the ministry's Web site, 92 students at Shaw received loans under the Ontario Student Assistance Program during the 1995-96 school year. By 1998, 57 had defaulted, leaving Shaw with a default rate of 62 per cent that year.

That was well above the average rate of 34.5 per cent for all career colleges in 1998.

In August of 1999, Shaw declared bankruptcy, and its Toronto, Hamilton and Hanover campuses closed.

Turmoil hits all regions

CDI Education Corp., one of the largest colleges in Canada with 60 centres, was sold this summer to a U.S. company, mainly because of declining enrolment and finances. CDI lost $5.5-million last year after making a profit of $1.2-million in 2001.

DeVry Inc., one of the largest private-college operators in North America, said it will phase out its Toronto campus in November because of falling enrolment and poor financial results. Yesterday, DeVry said it is continuing to assess Canadian operations and will take further action to reduce losses.

Academy of Learning closed 25 schools in Ontario in the past three years. It has 100 schools in Canada, 41 in Ontario.

Success College of Applied Arts & Technology, with schools in Moncton, Halifax and Truro, N.S., operates under bankruptcy protection.

Mosaic Technologies Corp. closed in August after losing $5.5-million in 2002, stranding students in Western Canada.

Saskatchewan Centre for Emerging Technologies, a Saskatoon animation school, failed in August.