Teresa Rodriguez brushes an orangey-red polish onto a client's fingernails and says, "I've waited years to go to cosmetology school, and then they opened one in Watsonville. It was a dream come true."

Her plastic apron hides the swell of her stomach--the 27-year-old is seven months pregnant with her third child. She was thrilled when she found out the Watsonville Institute of Cosmetology was so close to her home, and doubly pleased that the owner, Audelia Andrade, would work out a schedule that allowed her to stay at home with her children during weekdays. "I like it so much," Rodriguez says. "It makes me sad, because I might not be here."

The school, though it's only been in business for four months, is already in danger of closing. In early April, Andrade received a letter from Watsonville/Aptos Adult Education immediately terminating a partnership that had helped to open the school in January and was paying a large portion of the students' tuition.

"This is my dream, now it's my nightmare," says Andrade wearily. "I don't want to close. Everybody wants to be here."

For students like Rodriguez, state money that Adult Education received for reporting the school's average daily attendance paid half of her $480 monthly tuition, and since the school is too new for its students to qualify for federal school loans, everyone is paying out of pocket. "She announced it to us and I wasn't sure I'd be in class the next day," says Rodriguez. "I was about to cry. Literally, we were all stunned."

Director of Adult Education Nancy Bilicich, who also serves on Watsonville's City Council, says the state's decision to eliminate average daily attendance funding is responsible for the end of the partnership with the school. "The bottom fell out," she says. "So now it's: 'How do we get through this and try to save as many people as possible, but also try to serve our students.' It sounds like it's just cosmetology, but it's not."

The ADA funding collapse may prove to be a fatal blow to the cosmetology school. Andrade says that Rodriguez and at least seven other students have told her they'll have to drop classes next month, and all but one of her remaining students will switch from full-time to part-time status when their tuition leaps from $480 a month to $800. Andrade is concerned that she won't be able to pay the rent, and says if more students don't enroll, she may have to close by this summer. "We charge less than anyone else," says Andrade. "We have a lot of people come to us, but we have customers and no students."

It's not for lack of enthusiasm. Andrade says she has something like 100 applications but few of those students can swing the monthly payments. She and her students are hoping someone will be able to step in and provide tuition or scholarship help.

In another room, Andrade's 18-year-old son Jessie is getting a European facial from a student. His father and two brothers helped build the school themselves, using contractors as little as possible. He says that in a place like Watsonville, where unemployment and high school dropout numbers are on the rise, the school represents an alternate path for many young residents.

"A lot of people are really passionate about this program. Their dreams are shattered; they have to do something else," he says. "It sucks."

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