WHITTIER, Calif. (KABC) --Thousands of Marinello Schools of Beauty students are scrambling after the federal government announced Monday it was cutting the school's financial aid assistance program.
The U.S. Department of Education says several investigations uncovered serious violations determining that Marinello was withholding a portion of federal aid from its students, knowingly requesting federal aid for students based on invalid high school diplomas, charging students for excessive overtime and engaging in other acts of misrepresentation.
"Unfortunately, some schools violate their trust through deceptive marketing practices and defraud taxpayers by giving out student aid inappropriately," U.S. Under Secretary of Education Ted Mitchell said in a statement.
As a result, the department is denying pending re-certification applications for 23 Marinello campuses in California and Nevada. The affected campuses include two locations in Las Vegas, 14 locations in Los Angeles, two locations in Burbank, two locations in Moreno Valley and three locations in Sacramento.
The California Bureau for Private Post-Secondary Education has subsequently issued an emergency decision to cease enrollment of any new students.
Jasmine Garcia, who attends the Marinello School of Beauty in Whittier, says she and fellow students are the ones caught in the cross hairs.
"It's crazy because the school and most trade schools for cosmetology run on hours so if we have to transfer to a CC to get our AA on cosmetology, we're going to lose all our hours," Garcia said. "I've gotten nothing but As and Bs here, and all my hard work is going down the drain."
"Despite Marinello Schools of Beauty's long history of compliance with regulatory requirements, for two months the Department of Education has delayed funding to our students without specifying allegations of wrongdoing or allowing us to respond," a spokesperson for Marinello said in a statement. "While we intend to appeal this decision and while Marinello believes it has done nothing wrong and will defend itself vigorously, without the federal funds our students deserve, our operations are at risk."
For the 2014-2015 year, the entire Marinello school chain, which is comprised of 56 campuses nationwide, received more than $87 million in grants and federal loans.
Marinello now has until Feb. 16 to provide evidence to dispute the department's findings.