Quebec vows to tighten regulations around private colleges

In the wake of CBC's report on three private colleges catering to international students which recently filed for creditor protection, the province's higher education minister said she plans to put in place measures "to ensure that this type of situation never occurs again."

Refunds remain uncertain for hundreds of students in India who withdrew from colleges

Danielle McCann, Quebec's minister of higher education, has committed to evaluating the process 'for issuing, renewing or modifying permits for private colleges' in the province. (Ryan Remiorz/The Canadian Press)

The Quebec government says it is taking steps to tighten the regulation of private colleges in the province in the wake of a CBC report about three institutions that filed for creditor protection earlier this year.

Danielle McCann, the province's minister of higher education, said in a statement she plans to implement measures "to ensure that this type of situation never occurs again."

The measures include evaluating the process "for issuing, renewing or modifying permits for private colleges."

A student recruitment agency, Rising Phoenix, and three affiliated colleges — M College in Montreal, CCSQ College in Longueuil and CDE College in Sherbrooke — shut down and filed for creditor protection in January, leaving hundreds of international students in limbo.

The recruitment agency and colleges were operated by Caroline Mastantuono and members of her family.

Caroline was fired from her position as head of the Lester B. Pearson School Board's international program in 2016 under suspicion of financial wrongdoing. Her children Joseph and Caroline also worked there and were dismissed around the same time.

Quebec's anti-corruption unit, UPAC, was called in to investigate, and Caroline Mastantuono and her daughter, Christina, were eventually charged with fraud for acts allegedly committed at the school board between 2014 and 2016.

Quebec's Ministry of Higher Education granted the Mastantuonos a licence to operate M College in the summer of 2019, even though the UPAC investigation was underway, and a 2016 provincial audit had found a litany of "irregularities" with the Lester B. Pearson board's international program.

The Mastantuonos went on to acquire CDE and CCSQ colleges in the spring of 2020, just months before Caroline and Christina were charged with fraud. 

(The Mastantuonos did not have to apply for permits for those colleges, as they were already designated learning institutions and already licensed.)

M College in Montreal's LaSalle borough, along with two other colleges and a student recruiting firm, filed for creditor protection in January. Hundreds of students had their studies disrupted. (Ivanoh Demers/Radio-Canada)

Both Caroline and Christina have pleaded not guilty to the fraud charges, which have not been proven in court. 

They declined to comment for this story. Joseph, who was president of all three colleges at the time of the creditor protection filing, also declined to comment.

Back to class for some, uncertain future for others

A new company, led by the Cestar International Education Group, based in Toronto, bought the colleges last week.

This purchase should allow many students to resume their studies, but for hundreds of others seeking refunds, they still aren't sure if they will get their money back.

Students have not taken any courses since the end of November 2021, when the colleges went on winter break. 

The new owner, who already operates private colleges in Ontario, as well as one in Quebec, has provided interim financing to rehire teachers and support staff so the colleges can reopen as early as this week.

Students should receive a course schedule soon, but classes will remain online until the summer session, according to an email sent to students by the new administration.

Ritik Sharma, who lives in India, says he asked CDE College for a refund last May after he didn’t receive his study permit. He paid the college $15,000. (Submitted by Ritik Sharma)

"Please note that schedules offered are designed to slightly accelerate your program to make up for lost time as much and where possible," the email reads.

In total, 308 international students at the three colleges are still waiting for a study visa in order to come to Canada, according to Richter Inc., the court-appointed monitor for Rising Phoenix's insolvency case. 

If anyone's visa from that group of students is refused, the new owner will refund their tuition fees, said Olivier Benchaya, a partner in the firm's restructuring group.

Another 502 students who previously requested refunds because their visa was denied or they withdrew from the college will be given a chance to reapply, Benchaya said.

If they can't get a visa, the amount of their refund will depend on how much money is left over for unsecured creditors at the end of the insolvency process.

'I just want my refund'

Ritik Sharma, who asked CDE College for a refund last May after waiting more than a year for his study permit, said he's no longer interested in studying in Canada. 

"I don't want to take any chances now," said Sharma, who lives in India's northern state of Punjab. 

"I just want my refund. Nothing else."

Anh Vo empathizes with Sharma's frustration. Her grandnephew in Vietnam applied to a private college, l'Institut supérieur d'informatique (ISI) in 2020, via a recruiting agent who worked for Rising Phoenix International. 

When his visa wasn't approved last fall, he asked the college for a refund of the money he'd sent — nearly $15,000. Vo said their family was shocked to find out ISI had never received that payment.

After his study visa was rejected, 19-year-old Tuan Kiet Dang, who lives in Vietnam, tried to get his tuition fees refunded. He discovered he'd paid the private college's third-party recruiter, which filed for creditor protection in January. (Tuan Kiet Dang)

Vo said she assumed the family had paid ISI directly but later found out Rising Phoenix had collected tuition fees on the college's behalf, using an email with ISI's name in it. 

Last September, ISI sued Rising Phoenix for $17 million. The case is currently being arbitrated, and a decision is pending.

Vo, who lives in Brossard, on Montreal's South Shore, said the whole experience is incredibly disappointing and said her extended family in Vietnam feel "like the sky has fallen on their heads."

"They are not super-rich people," she said.

Trial set for next year

After they were charged in 2020, Caroline and Christina withdrew from the administration of the colleges and Rising Phoenix. Joseph Mastantuono, Caroline's son, stayed on as president of all three colleges. 

In November 2021, Caroline returned as president of Rising Phoenix.

In their creditor protection application, Rising Phoenix and the colleges blamed their financial troubles on the pandemic, ill-timed expansion and the long delays for student visas.

The fraud trial is expected to start in January 2023.

With files from Cathy Senay