PHOENIX – Argosy University students were told in emails Wednesday that campuses across the country could close as soon as this week.
An email to Phoenix students from Phoenix Campus President Anthony Spano says the site is “at risk of closure this Friday, March 8” because of the school’s loss of federal aid access.
The emails from campus administrators say that unless a qualified buyer steps in, or another university comes on board to teach out the students, the campuses will close.
It’s unclear how likely it would be for either a buyer to step in or another university to teach out the students, and what happens next may vary depending on which campus a student attends.
If someone buys a campus, that campus’ students would be able to continue their studies “without interruption.” A transfer partner would also allow students to continue their studies.
But, without those options, the campuses have to shutter, the emails say.
“Should the campus close, we would work with our accreditors, state regulators and the U.S. Department of Education to provide options for our students,” Spano wrote in the email to students.
Similar letters have gone out to other Argosy campuses.
Argosy’s financial mess has grown over the past few months. After Argosy’s parent company, Dream Center Education Holdings, couldn’t pay its creditors, a federal court in Ohio appointed a receiver.
In February, The Arizona Republic revealed that thousands of Argosy students across the country had not been paid financial aid funds they were owed, to the tune of $13 million.
Since then, the U.S. Department of Education yanked Argosy’s eligibility to use federal aid programs, a significant threat to the university’s future.
On Monday, a court document filed on behalf of the receiver said Argosy and Dream Center had altered submissions to the U.S. Department of Education to get access to student financial aid funds, which were then spent on other expenses, like payroll.
The school has branches in 11 states, according to its website. It is based in Orange County, California.
Receiver: We want to close campuses by Friday
On Wednesday, an attorney for the receiver, Mark Dottore, asked the Ohio court for permission to sell, transfer or close Argosy University campuses.
Dottore’s attorney, Mary Whitmer, said the department’s decision to cut federal aid access was a major blow.
“Without these critical funds, Argosy is unable to continue educating students and the university is failing,” she wrote.
Since the receiver got the news about the federal aid denial, he has “worked around the clock” trying to find potential buyers for Argosy sites or places for Argosy students to go if the campuses close.
“The receiver’s goal is to transition students to new situations in the most efficient way possible,” Whitmer wrote.
A number of the campuses have interested buyers, Whitmer wrote, and the receiver is working to file papers to seek approval for these sales before Friday.
But if there’s no buyer, the receiver is asking to close campuses and provide students with information about how to transfer elsewhere.
Each campus will hold an information fair Thursday and Friday, where institutions that are able to take transfer students will be invited, the filing said.
“The receiver is doing everything he can do in the short time available to him to help the students navigate this course,” Whitmer wrote. “This is devastating news for all of the students and faculty, but the receiver will continue to work to militate against further disruptions.”
Judge calls hearing about receiver
Separately on Wednesday, the court called a hearing for March 11 to decide whether Dottore should remain the appointed receiver.
The judges in the case noted that Dottore did not provide a copy of the department’s letter about losing financial aid access, and the court only saw the full text of the letter when another party in the case asked for a motion to vacate the receivership.
The learned of the receiver’s closure plan but Dottore only filed a motion asking to do so after the court asked about it, the filing says.
“The court’s concern is that the current receivership is doing more harm than good,” the judges wrote Wednesday.
Accreditor requiring teach-out plans
On its website, Argosy’s accrediting agency says the schools have until Monday to provide the accreditor with teach-out plans. Teach-outs are put in place when a school will close. New enrollment is halted while current students finish out their studies.
“The plans must include course/program maps to comparable programs that may serve as teach out partners in the event that the institution or some of its programs close or are discontinued,” the WASC Senior College and University Commission’s website says.
Individual students may also transfer to schools that aren’t a part of a teach-out plan, the website says.
The accrediting body “will work with teach out and transfer receiving institutions to provide as much flexibility as possible so students can maintain their programs and credits.”
What should students do?
When a college closes, students may be eligible for Closed School Discharge for federal loans.
But, if students graduate from Argosy or transfer credits to a comparable program at another school, they would not be eligible for the Closed School Discharge.
Experts also suggest getting copies of transcripts before a college closes, as it may become harder after closure.
If you paid cash for your tuition or used private loans, you may be eligible for reimbursement through the state’s Student Tuition Recovery Fund Program. But again, these programs only apply if you aren’t transferring credits to another school. You can’t transfer credits and get reimbursed.
Follow Rachel Leingang on Twitter: @rachelleingang
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