The infamous Nova language school, the most well-known of all the McSchools in Japan, looks like it’s on the verge of collapse.

Nova has been looked down upon in the teaching community in Japan for quite some time. It has been seen as a school that skimps on quality, mistreats its instructors, and short-changes its students. It is best know for its slogan, “Ekimae Ryugaku” (“Study Abroad Right Near the Train Station”), and its rather bizarre, pink, parrot-billed rabbit mascot.

Nova seems to have been a lightning rod for bad news stories over the years. In 1994, when two Nova teachers were caught possessing drugs, Nova demanded that all of its foreign teachers submit to drug testing (Japanese employees were not included in the testing). This set off a firestorm of protest, and boosted Nova’s teacher union to new heights. It was universally seen as a bad move–not only discriminatory, but also a public statement of lack of faith in their employees.

Last Winter, however, seven Nova teachers were arrested on drug charges–unrelated, of course, but still it did not look all that great. One has to wonder if the school’s eagerness to hire untrained teachers with the barest college degrees and working-holiday visas (the easiest to arrange for working in Japan) may have had some part in this–you hire whomever comes off the boat, you can’t be too surprised if you get some bad apples.

To add insult to injury, in March this year, a 22-year old female Nova teacher was found murdered, likely by one of her students, who remains at large.

But Nova’s real business troubles came about early this year. Nova had apparently been cutting the number of teachers it made available, creating teacher shortages during peak hours, and was investigated by the Ministry of Trade, Economy and Industry as well as other government and consumer organizations. Apparently, Nova was making fraudulent promises to students, and failing to honor cancellations students were entitled to, in violation of Japanese commercial transaction law.

After failing to make their case in the courts, in June Nova was banned from selling long-term contracts for six months. And since then, the company seems to have been spiraling down the drain. It is closing down 100-200 of its 900 schools.

But that’s not the part that seems to signal a collapse of the entire business. If the school were simply restructuring, that might be a sign of survival. But many of the branches that are shutting down may be doing so because landlords are complaining of non-payment of rent. Japanese employees are leaving the school in droves, according to the same story. And to top it off, many teachers are complaining that their pay is late in coming this month, after 2000 of its Japanese staff were not paid on time the previous month.

All of these are signs of a business in the process of self-destructing. Maybe I’m wrong, but I have seen these signs before.

Except for the impact on the thousands of employees who would lose their jobs, Nova’s disappearance from the language-school scene would not be a great disaster in itself; it’s not as if it was a model of great instruction or peerless business administration. It would be missed probably only a bit more than the long-defunct Bi-Lingual school, the one that advertised using ink ribbons and photos of foreign male teachers and young Japanese female students almost kissing. The education community can do with fewer schools like that.

The problem, however, is one of consumer confidence in the industry in general, especially if Nova closes its doors suddenly and leaves countless students hanging with paid-for lessons that will never be delivered. That has happened before.

In fact, it happened a long time ago to the side of the education industry I work in–American colleges in Japan. Back in the 1980’s, when Japan was flush with cash and seemed poised to rule the world, a few dozen American colleges and universities decided that it would be a great idea to set up branch campuses in Japan. Many schools did this without due consideration of all the factors involved, and that wound up hurting everyone later on.

First of all, most American schools had to partner up with a Japanese organization to handle the administrative and financial side to running a college in Japan, and many of them chose poorly. That, and the timing was bad–when the Japanese economy went south in the early 90’s, many of the partner companies went under, leaving the American colleges high and dry. Many closed their doors suddenly, leading to a collapse in consumer confidence, which led to the demise of most of the remaining schools (along with grade inflation and other problems).

Only a few schools survived, my own being one of them (primarily thanks to a serious partner organization and a doggedly committed home campus), but the mid-90’s were tough years. When I first arrived at my school in the late 90’s, we were at the nadir, with only several dozen students in the academic program. The first graduation ceremony I presided over, in fact, had all of two students receiving their diplomas. Things got much better over the following three years as we nearly tripled our student body, and graduating classes swelled to dozens of students per semester. (I’d love to claim cause-and-effect from my taking over the school, but that would be succumbing to the “post hoc ergo propter hoc” fallacy we teach our students to avoid.) Yes, enrollment hit a snag in 2002 after 9/11 scared students, but the school has done surprisingly well since then, especially in the face of a quickly-diminishing youth population in Japan.

However, for a while there, our school, like so many of the others, hit upon hard times–not because the school was deficient in any way, but rather because of the poor image that collapsing businesses left in their wake; we suffered by association. When there is a notable default and sudden closing-of-doors in the industry, it hurts everybody in that industry. Of course, my school is far distant enough from the Nova-class conversation schools that it won’t affect us (who knows, we might even benefit as people seek out more dependable schools), but the English Conversation industry is fairly certain to take a major blow over this–and that industry has already seen bad times in recent years.

When I came to teach in Japan at that level in the mid-80’s, it was not too hard to find a fairly well-paying job, and managerial jobs paid very well indeed. Today, pay for such jobs is depressingly low, and many jobs require teachers to take on classes with small children, something relatively rare back in the 80’s.

Nova is a disaster waiting to happen. The only question that remains, it seems, is how many others they’re going to take with them when they implode.