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Advice from a Former Career School Owner

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If you are considering starting up a private school, the regulations, requirements, and financial demands can seem completely overwhelming if you’re just starting out in the education industry.  

 Luckily, we have the honor of working with former school owner Bruce Capps, who was in the field of education and a teacher, administrator, and school owner for the past 40+ years.  He opened one of the first proprietary high school in Alabama, followed by multiple Allied Health Institutions prior to his career with FAME. During his tenure as a school owner, Bruce was a FAME client for more than 20 years. He is currently a Sales Executive at FAME. 

 He has graciously offered his tips to those who may need some guidance!  


The Core of Your Institution 

Your students are your product and the core of what you are doing with your institution. Stay focused on them. As they move on with their lives after graduation, they will be representing you, your school, teachers, graduates, and all those associated with the school. 

Money will flow to those schools that educate, train, and place their students. You exist based on “word of mouth” advertising, not paid advertising.  

 Whether you build a school from the ground up or purchase one, you’ll find yourself in an exclusive club. While individual methods tend to vary from school to school, the bottom line is that your school is responsible for changing the futures of your students. Keep that in mind from day one.  


Plan Financially  

Although finances should never be the motivation for opening an educational institution, they are something that must be considered and planned for from the get-go. There are also so many aspects of the financial side of an institution that no one tells you when you’re getting started in this world of education.  

 For example, that extra money left over after expenses is called “profit,” but it is quickly eaten up by expenses to maintain the school’s accreditation, licensure, compliance, and physical existence. Profits are used to pay for major repairs and replacements.  

 Also, for-profit schools pay all taxes. Non-profit schools are tax-exempt. Both must make a profit to continue in business. 

“For Profit” career schools must also maintain a 90:10 ratio between funds received from federal sources, and cash funds received from students for the school to continue to participate in Title IV federal student assistance programs. Tax-exempt “non-profit” and public schools do not. 

 Overall, career schools must have a budget and a business plan with a source for backup funding. Budgeting every dollar is the key to survival. Outsource anything that you are not qualified to do such as accounting, payroll, teaching, or financial aid. Spend your dollars wisely.  


 Equip Students for the Long Haul 

Career Schools are held to a much higher standard than public colleges and universities in terms of preparing students for the real world of work. Accreditors require career schools to graduate a high percentage of those students who enter their program and to find jobs for those who graduate. While every accreditor has a different standard for graduation and placement, some have a 70% and 70% requirement. All accreditors require that students must be employed in the job that they were trained for by your school. 

 To do this, solicit input from employers in your area as to the skills they expect their employees to perform, and intentionally include those skills in your training program. 

 In that same vein, don’t add programs, class schedules, or more admissions representatives and think that will increase your enrollments.  You can’t be everything to everybody. Stick with programs that prepare for existing and future jobs, and ensure you’re meeting those requirements for graduation and placement above expanding other programs.  


  Keep Up with Regulations 

The lists of regulations can seem never-ending, but they are critical to maintaining eligibility and accreditation. Don’t let those things slip, or your entire institution will struggle to keep up.  

Be sure to stay informed about all of the rules, regulations, and trends that affect your school. Networking with other school owners is a great way to do this, as well as having contacts within the industry to bounce ideas and issues off of.  

If you are just starting your school, be very familiar with your state’s regulations and requirements. Know the accreditor that you want to use and study their rules and regulations. 

If you use Title IV now, or plan to use it for your students in the future, you must know about the Federal Student Handbook and particularly about institutional eligibility and program integrity requirements. You must also know about the financial statement and financial ratio requirements for accreditation and for participation in Title IV funding. 

The very best way to create a solid plan for maintaining eligibility and regulatory compliance is to develop a relationship with a Title IV consultant like FAME’s Title IV consulting department.  It is mandatory for school owners to know as much as possible to limit costly mistakes. 


Preparation is Key 

As with most endeavors, it is absolutely critical that prospective career school owners know as much as possible before getting started. School ownership is not for the faint of heart, but is incredibly rewarding when done well. We’re so grateful to Bruce Capps for offering his time and advice, and we hope this has been helpful to someone considering career school ownership in the future!  


 This material is presented for informational and educational purposes only and should not be considered to be giving legal advice.   


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