Call Kurtis: Federal Government Cuts Funding to Marinello Beauty School Leaving Students in Limbo

SACRAMENTO (CBS13) — Tears of frustration flowed outside the Garfield Avenue Campus of Marinello School of Beauty. Some students who are just weeks from graduating learned following a Department of Education investigation, the agency planned to stop sending federal student loan and grant money to the for-profit institution.

"We have 3 weeks left," said student Ritamay Stortz. "And everything is just taken out from under us now."

According to the Department of Education, the entire chain of Marinello schools with 56 campuses across the country received $87 Million in Federal loans and Pell Grants in 2014-2015.

The U.S. Department of Education says it is denying recertification of 23 campuses, including three in the Sacramento area.

The investigation found the school was "fabricating high school diplomas" when applying for student aid. The school is also accused of "misrepresentation" when it failed to provide students training sufficient to obtain jobs. The investigation also claims Marinello "callously disregarded students' financial need".

The Department of Education released this statement in a news release.

"Our students depend on higher education institutions to prepare them for careers through a quality education. Unfortunately, some schools violate their trust through deceptive marketing practices and defraud taxpayers by giving out student aid inappropriately. These unscrupulous institutions use questionable business practices or outright lie to both students and the federal government," said Under Secretary Ted Mitchell. "In these cases we are taking aggressive action to protect students and taxpayers from further harm by these institutions."

Nakisha Harrell says she's invested nine months and $22,000 in the cosmetology program. She wants to know what this means for her future.

"They're not giving us no answers," said student Nakisha Harrell. "We talked to corporate. Corporate is saying our director will know everything. She didn't give us answers either."

When we asked someone at the school for comment, the door was closed on us. We reached out repeatedly to the school. A woman who identified herself as a receptionist said there would be, "no comment".

"It makes me feel hurt," Harrell said. I made a lot of sacrifices for my family."

Following the investigation, the U.S. Department of Education says it is denying recertification for five Marinello locations covering 23 campuses in California and Nevada. It affects 2,100 active students. Aside from Garfield Avenue, the school has campuses in Stockton and Chico.

The Marinello schools have until Feb. 16 to submit factual evidence disputing the federal findings.