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Duluth Business University announces plans to close

Duluth Business University owner and president Jim Gessner speaks to members of the media during a news conference Wednesday at DBU. The school will close next June. Mike Krebs / mkrebs@duluthnews.com

Duluth Business University student Rachel Hobbs once lost a course textbook.

The 24-year-old Duluth resident who is enrolled in the school’s veterinary technician program wasn’t eager to replace the expensive book, so she was delighted when someone from the school’s bookstore found a free replacement.

“We are a family,” she said of the small school, and the news of its closure “is heartbreaking.”

DBU announced Wednesday that it will close next June, citing a sharp drop in enrollment at the 126-year-old school amid uncertainty about its future accreditation.

The U.S. Department of Education last September said it was terminating recognition of the Accrediting Council for Independent Colleges and Schools, banning it from the federal financial aid program; a school must be accredited by a recognized agency for its students to be eligible for federal financial aid.

DBU initially sought oversight from a new accreditor, but has withdrawn its application after enrollment dropped to just 73 students from about 100, according to Jim Gessner, DBU’s president and owner for the last 53 years.

The number of applications has declined for months, he said, along with inquiries and enrollment. That meant less revenue.

“When you are enrolling 30 people a quarter and it goes down to five or six, it’s hard to break even,” he said. “Soon, you are in the red.”

The school, located at 4724 Mike Colalillo Drive, in West Duluth, had as many as 350 students in 16 programs and 80 employees when it moved into its present building in 2004. Now, there are about 20 employees and eight programs. Of the 73 remaining students, 43 are in DBU’s veterinary technician program.

Veterinary technician students attend class on Wednesday at DBU. Mike Krebs / News Tribune

What happens next?

The school doesn’t plan to leave current students hanging. Staff will meet with each of the remaining students to help them figure out a plan, whether it’s cramming in extra classes to complete a program before the June deadline or finding another school to finish with, online or in person.

“Our intent is to train these people,” Gessner said, and not “just lock the door,” as has been seen with other Minnesota for-profit schools. Regency Beauty Institute, with a campus in Duluth, was one of those for-profit institutions that closed abruptly.  

Some students will struggle to finish in time, or may not be able to transfer elsewhere. DBU officials said it’s unknown whether those students will be refunded tuition.

“We will do everything we can to help these people out,” Gessner said, and will look at each of those situations.

No new students were admitted when a new quarter began July 10.

The state and federal governments have less leverage once a school has decided to close, said Betsy Talbot, manager of institutional registration and licensing for the Minnesota Office of Higher Education. But the government does work with the institution to “wind this down to be as successful as possible for students.”

Students aren’t guaranteed a lot, she said, noting that a “closed school discharge” is only available within 120 days of an official closure, not the announcement of a closure. So students who don’t plan to finish or aren’t sure if they will are in the uncomfortable position of deciding whether to keep going, spending money on credits they may not graduate with to remain eligible, or “find a way to mitigate losses now,” Talbot said.

The students in the veterinary technician program have fewer options because the nearest program is in the metro area. Most though, said Hobbs, will finish before time runs out. She and many others are already employed or have jobs waiting for them, she said, noting a similar veterinary program planned for Ely.

Campus director Bonnie Kupczynski said the hope is to get all of that program’s technical classes done before the school closes, so students can take remaining classes online elsewhere and not have to move. DBU is talking with other schools about that option.

Duluth Business University owner and president Jim Gessner speaks Wednesday at DBU. Mike Krebs / News Tribune

Dwindling interest

Talbot said Minnesota has very few for-profit schools remaining that were accredited by the Accrediting Council for Independent Colleges and Schools, and a handful in every state have closed because of this issue.

The federal government made the decision to strip authority of that accreditor because it said it wasn’t in compliance in several areas, many of them longstanding. Schools like DBU had 18 months to find a new accreditor. Since DBU is no longer doing that, it is accredited through June 12, and remaining students are eligible for financial aid until then.

Gessner said that interest and enrollment began to dwindle once it was announced last fall that its future was uncertain.

The new accreditor DBU was applying with asked for a business plan and financial assurances that DBU couldn’t promise, Gessner said, which is why it withdrew. The accreditor termed it as a denial of the application, Talbot said.

The DBU building is for sale, and if it sells before June, the school will try to rent out space from the new owners for the veterinary technician program, for example, or rent elsewhere, Gessner said.

Reaction to the closure — on social media, and among students who spoke with the News Tribune — was mixed.

Duluthian Kellie Ruzich, still paying loans from her time at the school in 2009, wondered whether she needed to continue to pay. (She does.)

She didn’t find the school supportive, she told the News Tribune, and knows graduates who have struggled to get jobs.

“I am OK with them closing,” she said.  

Former student Kristina Deppe of Duluth earned an associate’s degree as an administrative assistant in 2016. She hasn’t yet found a job, she said, but DBU has helped give her leads. Deppe, who experienced a supportive staff during her schooling, said she was “sad” to see the school close.

DBU was founded downtown in 1891 to teach shorthand, accounting and other office skills. Its current programs also include business administration, health care management, human services, massage therapy, medical assisting, and medical billing and coding.

Gessner said area hospitals have called him recently asking for graduates.

“The loss of the school is going to mean something,” he said. “The fact that these major companies and hospitals will call me and say we need lab techs, we need this or that. … But there is a lack of interest in these jobs that are needed.”

Holly Rosendahl, practice manager of the North Shore Veterinary Clinic, sees that firsthand.

Five of her nine veterinary technicians are DBU graduates, but she no longer gets stacks of resumes for those jobs, or even interns from DBU, she said, citing a nationwide shortage for that particular job candidate.

The area was lucky to have a school that produced such technicians, she said, so the closure “is a disappointment for us.”

Duluth Business University students can call the Minnesota Office of Higher Education at (651) 259-3912 to receive answers to their closure concerns or financial aid concerns.

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