Collapsed GEOS language schools will not re-open as debts hit $10 million

Eight collapsed language schools owned by the Japanese-based GEO Group will remain shut, leaving the places of 2,300 students up in the air and 390 employees out of work.

Administrators Justin Walsh and Adam Nikitins of Ernst & Young said in a brief statement released yesterday that the financial position of the schools, which were shut down last week, was such that they could not continue to trade.

“We are continuing to investigate the financial affairs of the companies and will report to key stakeholders in due course,” the pair said.

Total debts owed to students and other creditors could be as high as $10 million, according to media reports.

The colleges are located in Melbourne, Sydney, Adelaide, Perth, Brisbane, Gold Coast and Cairns, with the largest number of students based in Melbourne (530 students) and Sydney (500 students).

Australia’s international student system contains consumer provision protections which means students at a collapsed school will be given places at other institutions.

The administrators said they will now work with “the Federal Department of Education, Employment and Workplace Relations and relevant state government departments in relation to alternative arrangements for students”.

“Government agencies will also be holding information meetings for affected students in relation to consumer protection and alternative arrangements from Wednesday this week.”

GEOS Oceania is part of the GEOS Group, which operates language schools in North America, Europe, Singapore, South Africa, Korea and New Zealand.

Most of the schools in Australia have been running since the 1990s, while the Brisbane campus was established in 1987.

GEOS, which stands for Global Education Opportunities and Services, was founded in Japan in 1973 by Tsuneo Kusunoki.

The company’s global expansion has been wound back somewhat in the last few years, with 10% of the company’s Japanese schools shut down in 2007 and centres in Vancouver and London closed in 2008.

Troubles at the GEOS college in Melbourne appear to have been mounting in recent months. According to The Age, the Victorian Registration and Qualifications Authority had become concerned about GEOS following a financial audit.

The collapses are another blow to Australia’s beleaguered international education system, which has seen a string of high-profiled failures in the last 12 months.

Sterling College and Melbourne International College went under in July, while four schools – Meridian International School, Meridian International Hotel School, International Design School and International College of Creative Arts – with a total of 13 campuses, collapsed in November.