Beauty School Finally Drops Out: Why Did It Take a Troubled Paul Mitchell Campus Years to Close?

In August of last year, a Knoxville, Tennessee for-profit beauty school was told it would be stripped of its accreditation.

That school, part of the prominent Paul Mitchell beauty chain, had violated the rules of the accreditor, the National Accrediting Commission of Cosmetology Arts and Sciences, requiring that institutions maintain sound finances.

Paul Mitchell The School Knoxville needed accreditation to survive. Federal law prohibits students from using federal financial aid like Pell Grants at unaccredited institutions. And the $1.1 million the school received in Title IV money represented nearly three-quarters of its revenue for the fiscal year ending in 2022, according to U.S. Department of Education data.

In other words, losing accreditation meant severing the financial lifeline that kept the school afloat. Paul Mitchell Knoxville informed NACCAS in February that it does intend to voluntarily give up its accreditation on May 1, according to public records. A representative who answered the phone at the school this week said it will shut down at the end of April.

However, the school’s rocky financial saga extends much further than just the past couple of years. Over the past 13 or so years, NACCAS repeatedly flagged the campus for financial instability and noncompliance with its standards, but only revoked its approval last year.

Allowing Paul Mitchell Knoxville to remain open despite financial turmoil—and to enroll students in programs where only 3 percent of first-time, full-time students graduate on time, according to Education Department data—exposes profound failures in NACCAS’ judgment.

As of Friday morning, the school has not announced its closure on its website. It still has the option to reverse its decision and attempt to maintain accreditation. NACCAS rules only require a school to announce on its website and social media channels that it is relinquishing accreditation once the process is finalized—though this is a disservice to students and the public who might be seeking information about the school.

The problems with Paul Mitchell Knoxville are not just failures of one bad actor. They are endemic within the for-profit beauty school industry, which relies on large infusions of federal financial aid while graduating students at dismal rates. Often students who do pass their programs and secure a cosmetology license end up earning no more than they would have with just a high school diploma. That’s the case with Paul Mitchell Knoxville, where only 40 percent of students have salaries higher than a typical high school graduate, according to Education Department data.

NACCAS Executive Director Darin Wallace declined to comment Thursday evening. One of the school’s owners did not respond to a request for comment.

In 1980, the duo of Paul Mitchell and John Paul DeJoria founded the eponymously named company with just $700 between them, aiming to specialize in affordable but quality hair care for salons. The rise of their venture, John Paul Mitchell Systems, is a rags-to-riches tale, with DeJoria, who also created Patrón tequila, famously living out of his car as he and Mitchell began hawking the first round of their product.

Since then, their venture has evolved into a behemoth corporation, selling branded hair products and maintaining the roughly 100 locations of Paul Mitchell The School nationwide. The company, which brings in an estimated $1 billion in revenue annually, has cultivated a high-end reputation, in part because it markets its products as professional grade, as meant to be sold to and through salons.

Paul Mitchell campuses also train students with the company’s product lines, spreading and reinforcing brand loyalty, not only for hair care, but also the schools themselves. Paul Mitchell often draws in budding hair stylists because of its ubiquitous industry name, according to current and former cosmetology students who participated in interviews and focus groups with New America in late 2023 and 2024.

But prevalence does not equate to quality. Many Paul Mitchell locations, which operate in a franchise model, have attracted allegations they peddle low-quality education. Several Paul Mitchell students, for instance, told New America they ended up learning certain techniques from their peers instead of their instructors, an alarming reality for students who are burning through precious financial aid or paying thousands of dollars in out-of-pocket tuition.

Paul Mitchell Knoxville appears to be one of those troubled institutions, having experienced financial tumult and other problems for more than a decade.

NACCAS has warned or sanctioned Paul Mitchell Knoxville for running afoul of its standards at least a dozen times or so since the school opened in 2011, according to a public database that contains details of punishments and other actions that accreditors have taken against colleges. That may not represent every action NACCAS has taken against Paul Mitchell Knoxville, however, as the database is not comprehensive and best captures accreditors’ activities that occurred after 2016.

Paul Mitchell Knoxville, located about 15 minutes from downtown Knoxville, enrolled 113 students in fall 2023. It was first put on probation during July of its inaugural year, though the database does not list a reason as to why. Several years later, in 2017, NACCAS warned Paul Mitchell Knoxville that an audit of its operations had yielded “multiple deficiencies,” which the accreditor did not identify in a letter to the school.

Later, in 2020, NACCAS ordered the school to submit a plan to shore up its finances after it had reviewed the campus’ financial statements, which were redacted in public documents, and said it was monitoring the school’s budget and cash reserves. After easing additional oversight of Paul Mitchell Knoxville’s finances in 2021, NACCAS again in 2023 said it was monitoring its financial state and cash reserves, a precursor to it putting the school on probation in 2024. It repealed its accreditation in August last year.

Only on one other occasion did NACCAS come close to pulling Paul Mitchell Knoxville’s accreditation. In 2018, the school failed to pay accreditor fees, and NACCAS ordered it to “show cause” why it should not revoke its accreditation. The missing amount was $223. NACCAS hadn’t threatened the school’s accreditation over the “multiple deficiencies” in its affairs it found in 2017—but it did over a couple hundred dollars.

The accreditor’s actions prompted the U.S. Department of Education to also restrict Paul Mitchell Knoxville’s access to federal student aid.

Typically, colleges can draw students’ financial aid, like federal Pell Grants, directly from the Education Department to cover their cost of education. Because NACCAS acted against Paul Mitchell Knoxville, the Education Department instead forced it to front the financial aid expenses and then seek reimbursement from it, a sanction known as heightened cash monitoring 2. This label means to signify a college has major operational issues.

In 2022, the Education Department also required the school to set aside over $170,000 because of its anemic financial position. This amount was 10% of the federal aid the school had received the previous year. The department generally requires colleges in weak financial standing to submit this money, usually as a letter of credit, to ensure they can cover their obligations and debts if they close.

The school’s financial turmoil has seemingly translated into its day-to-day operations, too, leaving students with an education that, by many measures, falls short of quality.

The majority of Paul Mitchell Knoxville students leave without a meaningful financial boost, according to Education Department data from before the covid-19 pandemic—40 percent earn no more than a high school graduate, and many struggle to repay their loans. More than 25 percent of Paul Mitchell Knoxville students are formally in non-paying forbearance status on their loans two years after graduating, while another quarter are not making any progress on repaying them, according to federal data. Nearly another one in four are behind on their loans or in default, while 17 percent are making progress on them.

One of the school’s owners, Dale A. Jones, did not respond to a request for comment on the school’s troubles.

Jones, and his wife, Kimberlyn, own just under half of the school, according to public records.

Despite the Knoxville campus’ recurring woes, the corporate wing of the Paul Mitchell schools, Paul Mitchell Advanced Education, has held Dale Jones up as an exemplary leader.

In 2020, the co-founder and co-owner of Advanced Education, Winn Claybaugh, interviewed Jones for his podcast “Masters,” trumpeting Jones’ “significant impact” in the beauty industry. The interview highlighted Jones providing “a passionate glimpse into the power of the beauty industry and the responsibility of leading people with compassion and love.”

Jones also partially owns Paul Mitchell campuses in Nashville and Murfreesboro, Tennessee, according to that podcast interview and public records.

The Nashville campus operates as a branch of Murfreesboro’s, public records state. That school, too, is under NACCAS scrutiny. In November last year, the accreditor ordered the school to submit a financial plan by late December to come into compliance with its standards—the same sort of problem rife at Paul Mitchell Knoxville.

Paul Mitchell Knoxville embodies some of the worst trends in for-profit education, but it is far from the only beauty school driving poor quality in the industry.

Cosmetology programs generally lead to jobs with lower pay than what high school graduates earn, for instance.

In 2023, the Education Department released a consumer protection regulation called gainful employment, requiring career college programs to prove their graduates can earn enough to repay loans and surpass high school graduate salaries. The department is still collecting data that it would use to enforce the regulation.

The Education Department has estimated that one in five students enrolled in programs at risk of failing to meet the benchmarks were in cosmetology and personal grooming services certificates.

New America’s upcoming report on the cosmetology industry will explore why beauty schools fail to launch students up the social mobility ladder, as well as the lobbying efforts that ensure licensure mandates remain excessive, locking students into these poor-quality programs for much longer than is necessary to earn their credential, wracking up excessive debt along the way.

The industry desperately needs a makeover, one that swiftly plucks institutions like Paul Mitchell Knoxville and demands accountability from regulators like NACCAS.

This transformation must not only prioritize the closure of subpar programs but also enact systemic changes that ensure students are no longer trapped in cycles of debt for education that offers little return. Without such reforms, the cosmetology world’s cycle of financial instability and educational inadequacy will almost certainly persist