This past week may have been the last week of operation for Argosy University in Chicago. The university has been cut off from federal financial aid over its mishandling of the money. The U.S. Department of Education called the failure to properly administer the money “a grievous breach” of the university’s responsibility.
The university informed students and staff in a letter that the Education Department’s decision severely curtailed Argosy’s ability to continue operating. Many students say they are stunned by the announcement and had no idea that the university was in such a dire predicament. Some of those students are now scrambling to transfer to another institution.
Campus President Kevin Beaver said in the university’s statement, “We are working with students, accreditors, state regulators and the U.S. Department of Education to provide as many options as possible for students, to include transfer to another higher education institution or student loan discharge.”
The financial problems of Argosy’s parent company, Dream Center Education Holdings, are at the center of the issue. Argosy has been accused of using $13 million in federal aid that it received in January to cover payroll costs and other expenses. The university also reportedly failed to give federal financial aid credit balances to students as required by law.
It appears that the only hope of saving the institution is to find a buyer or an outside institution willing to take over its programs. The institution is also facing possible sanctions from the state. The private university is headquartered in California, but has campuses in 11 states.
The Department of Education also notified Dream Center at the end of last month that its request to convert Argosy from a for-profit to a nonprofit university was rejected. Regarding the matter, the department wrote: “Argosy’s failure to pay credit balance refunds owed to its students and parents demonstrates that Argosy cannot meet the required standards.” Argosy does have the option to file an appeal of the decision.