Have you ever heard of a college suddenly closing, leaving students, some of which were on the brink of graduating, without a complete college education? This is what happened at Bryman College, which operates 11 campuses. The college filed for Chapter 11 bankruptcy and fired all of its employees before emailing all of its students to tell them the school was closing for good because of financial reasons.
First, let's tackle the Chapter 11 bankruptcy before getting to the real issue here. Chapter 11 can give companies that are in serious financial trouble a little bit of time to figure out their situation. It can afford a company a few extra months to sort out their fiscal picture, thus allowing them to keep operating, or it can afford them enough time to build an exit strategy, such as a sale.
Now, on to the matter of these unfortunate students who have been thrust into a tumultuous situation. It's very unfair for this college to be allowed to file for bankruptcy and suddenly vanish because of financial concerns, but the very students who paid the college are unable to file for bankruptcy and watch their student debt vanish.
There are many students at Bryman who will graduate college elsewhere, and they will have tens of thousands of dollars in student debt that hangs over them for many years. Bankruptcy can't fix this, but effective debt management can keep college graduates on the right path to clearing their debt in a timely and efficient manner.
Source: NBC Los Angeles, "Students Demand Answers as Bryman College Files for Bankruptcy, Closes Campuses," Christina Cocca and Patrick Healy, July 28, 2014