Mid-State College has been ordered to send detailed letters to all students.
By Lisa Chmelecki
Staff writer

AUBURN – Financial problems likely led to the demise of Mid-State College, according to a state education official.

The small private college shut down its campuses in Augusta and Auburn on Monday, after more than 130 years in business. College officials said in a prepared statement that they had no choice after learning that the school lost its bid for accreditation.

The sudden decision came a week before classes were scheduled to begin, leaving students and teachers shocked and wondering what went wrong.

“I think we all knew that we had some financial issues, based on the economics of the state and area. But I thought they would have tried to sell it or be absorbed by another institution,” said Eric Kobischen, a psychology and business teacher at Mid-State College since 1998.

Since the college is privately owned, its financial records are not available to the public. Owner John S. Hraba lives in Las Vegas, Nev., and could not be reached for comment.

But a state official confirmed Wednesday that financial woes were one of the major reasons the Accrediting Council for Independent Colleges denied the college’s request for a new grant of accreditation after conducting its regular review in the spring.

“They’ve had some financial problems,” said Harry Osgood, the higher education specialist for the Maine Department of Education. “I don’t know exactly what transpired, but it certainly was a blow to them.”

Without accreditation, Mid-State College students would no longer qualify for federal financial aid.

“No institution can survive today without that,” Osgood said.

Of the 225 students scheduled to begin classes next week, more than 80 percent likely relied on federal financial aid, Osgood said.

Hraba could have appealed the decision of the accrediting council, but his decision to immediately shut down indicates that he chose not to pursue the lengthy and expensive process. A lawyer for the college said Hraba plans to file for bankruptcy.

Osgood has instructed Hraba to send letters to all of the college’s current students, explaining the situation and offering advice on what to do next.

Under Maine law, the college has until March 4, 2004, to send all of its academic records, including individual student transcripts, to the state Department of Education. The college also must begin working with the Finance Authority of Maine to reprocess students’ financial aid packages.

Until those steps are taken, Osgood said, students can try explaining their situation to other colleges in hopes of getting accepted on a conditional basis.

According to the state official, Hraba has already contacted three schools and plans to list their names in the letter to students.

‘Shocked’

For the faculty and staff, the consequences are slightly different. Many of them received letters Tuesday, informing them of the situation and letting them know that they can pick up their personal belongings on Sept. 5.

Some said they knew that the college was in trouble. For others, the closing came as a complete surprise.

“I was shocked,” said Pam Johnson, who taught travel and hospitality at the college before working part time in the admissions office. “I don’t know what could have happened.”

Based in Washington, D.C., the Accrediting Council for Independent Colleges and Schools is authorized by the U.S. Secretary of Education to review private colleges to make sure they are meeting federal stands.

Thorough evaluation

Reviews are conducted every one to eight years, depending on the school.

“The review covers soup to nuts,” Osgood said.

The team evaluates everything from the cleanliness of the buildings, the lighting in the classrooms and the system for filing student records to the qualifications of the instructors, the actions of the board of trustees and the school’s overall financial status.

The two most common reasons for denying a grant are financial viability and educational issues, such as a lack of professors with advanced degrees, according to Dr. Rob Patterson, associate executive director of the council.

Patterson declined to give specifics about the problems at Mid-State College.

According to Osgood, it is the first college in Maine to shut down as a result of losing a bid for accreditation.

lchmelecki@sunjournal.com