Students face debts as language school in crisis

8th June 2005, Comments 0 comments

8 June 2005, MADRID — Private language schools are struggling to stay afloat amid a wave of closures, a consumers' group said.

8 June 2005

MADRID — Private language schools are struggling to stay afloat amid a wave of closures, a consumers' group said.

The Spanish banking consumers' association (ADICAE) warned that thousands of students would be hit by the impending closure of 18 Wall Street Institute educational franchises across Spain and 17 subsidiaries unless changes were made to their financing model.

Wall Street Institute, which says it has some 350 language centres in 25 countries, "has decided to close the 18 centres run by the master franchise Wall Street Institute in Spain and leave the 17 franchise centres to decide if they are to continue their activities independently," ADICAE said in a statement.

According to ADICAE, more than 3,000 students face being left high and dry if the English courses they have already signed up to are shelved.

The case is an echo of a similar crisis three years ago when franchises of Opening language centres closed down in Spain leaving thousands of students contracted to pay advance fees running into hundreds of euros to their banks.

A court ruling last year said the banks should be liable for the cash paid out by around 175,000 students, according to ADICAE estimates.

The banks have appealed the decision.

"That means the result of the appeal could drag on for several years, whereupon, if they lose, the students may launch their own appeal," an ADICAE spokesman said.

"We are not demonising the sector. We are simply saying that if a service is not on offer or has been annulled then a credit payment should likewise be annulled. Otherwise it's just not acceptable.

"We say the students (affected) should get their money back plus interest."

The consumer organisation added that dozens of students had contacted the body for advice in response to "the crisis in language academies," judging that a collective legal complaint "carries more weight".

ADICAE says the Opening controversy has produced a "domino effect" on the sector in Spain, students from the Opening case saddled with average debts of 600 euros.

[Copyright EFE with Expatica]

Subject: Spanish news

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