Argosy University Collapse Exemplifies Lax Protection of Students—and Taxpayers—Under DeVos
Argosy University, a for-profit college serving 8,800 students at 22 sites across the country, shut down suddenly last Friday. Actually the collapse has been happening since 2017, but somehow across Argosy’s many campuses most people didn’t quite connect the dots.
And the U.S. Department of Education didn’t intervene until it became clear that the Argosy University had used $13 million in student financial aid for another purpose: paying off the debts of the collapsing institution. Finally when fraud was documented, the Department was forced to step in and deny further financial support in the form of student loans and grants. The university was so completely dependent on federal financial aid for its operations that, when the money stopped arriving, it closed mid-semester. It seems that Argosy was known for its graduate programs in psychology, and its closure leaves its students—some in the midst of writing their dissertations—in the lurch.
Argosy University was part of Dream Center Education Holdings—a nonprofit, religious social service agency. NY Times reporters Stacy Cowley and Erica Green explain that when Dream Center acquired colleges and trade schools from the failing Education Management Corporation in 2017, Dream Center hoped to make a profit to support its charities. “But Dream Center had never run colleges… Almost immediately, the organization discovered the schools were in worse shape than expected, with aging facilities and outdated technology… Dream Center had anticipated a $30 million profit in its first year…. Instead, it was facing a $38 million loss.”
While last Friday’s closure may have seemed sudden, there were a lot of warning signs, including that Argosy University was in receivership. Cowley and Green report: “The problems grew in mid-January when a creditor sued Dream Center Education Holdings over unpaid bills and asked a federal court to install a receiver to wind down the insolvent CONTINUE READING: Argosy University Collapse Exemplifies Lax Protection of Students—and Taxpayers—Under DeVos | janresseger
