Students left in lurch after Quebec private colleges, recruiting firm file for creditor protection

Not all that surprising given the financial incentives involved and the exploitation by some Indian recruiters and likely some private colleges:

Three Quebec colleges and a connected recruiting firm have filed for creditor protection, adding to the uncertainty for hundreds of international students who had already been seeking tuition refunds.

M College in Montreal, CDE College in Sherbrooke and CCSQ, which has campuses in Longueuil and Sherbrooke, all requested protection in a filing in Quebec Superior Court last Friday. The Montreal-based recruiting firm, Rising Phoenix International, also filed for protection.

They are all owned by the Mastantuono family — including Caroline, Christina, Joseph and Giuseppe Mastantuono — under the umbrella name RPI Group.

The request for creditor protection comes a little more than a year after the province suspended 10 private colleges, including M College and CDE college, for what it described as “questionable” recruitment practices for students in India.

The suspension meant the schools were temporarily prevented from accepting certain foreign-student applications. Quebec’s investigation into the 10 colleges revealed shortcomings around recruitment, commercial practices, governance and teaching conditions.

Although the suspension was lifted at the beginning of 2021, hundreds of students faced long delays in obtaining a student visa that would allow them to come to Canada.

Students from India struggle to get refunds

Students pay between $28,000 and $30,000 to attend the colleges, usually over a two-year period, according to court documents. Students from India represent 95 per cent of the 1,177 students at the three colleges.

In December, CBC News reported dozens of students in India had been trying to get their tuition refunded for months after their student visas had been delayed.

Several said their parents had saved for years so they could study abroad. Without a refund, some students said they are unable to apply to other colleges, meaning their academic progress is effectively frozen. Others had to take out loans or work part-time jobs.

According to the application for creditor protection, unpaid tuition fees and refund claims from 633 students against the RPI Group are estimated at nearly $6.4 million.

The document adds that there are “potential additional claims of approximately $5 million from pipeline students awaiting a decision on their student visa application.”

In its application, RPI Group blamed its financial troubles on “a cascade of unfortunate events,” including “the impact of the COVID-19 pandemic, untimely and improperly financed expansions, changes to the immigration process for international students, as well as the litigation and public relations issues faced by the group.”

RPI Group’s decision to purchase CDE and CCSQ colleges in June 2020 for $10.9 million also left it vulnerable after subsequent visa delays led students to ask for refunds, the application said.

‘No refunds can be processed at this time’

The application for creditor protection says the colleges are committed to ensuring “the best possible outcomes for all stakeholders, including students and other creditors.”

But a letter to students at CDE College from Joseph Mastantuono, the president of the school, suggests it will be difficult for them to get a refund.

According to the letter, which CBC News has obtained, there is a plan being developed for students close to graduation to help them complete their program.

Other students will have their academic training temporarily suspended to see if a potential buyer for the colleges can be found. Failing that, the students will have to transfer to other colleges.

The letter tells students that it is “within your right to withdraw from your college” but because of its creditor protection filing, “no refunds of tuition can be processed at this time.”

The Mastantuono family is involved in another legal matter involving international students.

In November 2020, investigators with the province’s anti-corruption unit arrested Caroline Mastantuono and her daughter, Christina, for allegedly committing fraud to facilitate the processing of student permit applications while working at the Lester B. Pearson School Board between 2014 and 2016.

Although the allegations occurred before RPI was created, the negative publicity led to creditors backing out or refusing to work with them.

Caroline and Christina Mastantuono deny any wrongdoing and have contested the charges against them. The case is still before the courts.

Source: Students left in lurch after Quebec private colleges, recruiting firm file for creditor protection

About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

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