Heights Driving School II, not to be confused with another school called Heights Driving, notified the state on May 21 that it was shutting down, said Department of Public Safety spokeswoman Lindsay Komlanc.
The notice came after the state moved to revoke the license of Heights II because the school had lost its performance bond.
Performance bonds are typically used to repay students if the school goes out of business, so the fact that Heights II didn't have one at the time it closed, makes it unlikely that parents will be reimbursed, Komlanc said.
The closure is forcing parents like Debbie Gruelle, whose son, Jordan, was taking classes at Heights II, to find another school so their kids can finish driver's ed.
Not only that, they will have to pay tuition at the new school in addition to the nearly $300 they put down for Heights II.
"In this day's economy, I don't particularly care for it," said Gruelle.
So far, 86 students have complained to the state Attorney General. AG Spokeswoman Kim Kowalski encouraged all students and their parents to call their office in the event they file a lawsuit against the school.
She said the Attorney General's Office recovered about $7 million for consumers in similar situations last year.
In addition, the state is reviewing school files so kids can get credit for what they've completed, Kolmanc said.
Experts say driving schools are struggling like any other business these days, which is why it's more important than ever for parents to do their homework before choosing a school.
"Cars aren't maybe being looked at as well as they could be. Students aren't being evaluated maybe as strongly as they could be," said Ken Stout, owner of DriveTeam Inc.
"All of that leaves the participant, the teen driver...really losing."