Just yesterday I recorded this ridiculous podcast (not for faint-hearted ears) about the financial mess with Argosy University and Art Institute campuses.
Damon Day and I talked about the “missing money” that students were expecting to receive from their federal student loans to help pay for everyday expenses like rent, mortgage, food.
The Department of Education said they would forgive the missing $13 million that students were supposed to be disbursed. But then the Receiver appointed to manage the financial affairs of Dream Center Education Holdings, the parent company of Argosy University and others involved, discovered the schools never received the money to disburse to students.
The Department of Education then went from “we will forgive the money we never sent to the schools” to provide some clarity on the actual situation.
The statement just released might provide a better explanation of where the student money is sitting but unless the Receiver can find an extra $13 million to disburse to students and then wait to get reimbursed by ED the students are still skarewed hoping their living expense money will arrive.
Just another tragic school situation in a long list of them, mostly for-profit schools that the Department of Education wants to reduce the oversight of. Makes no sense but thank Secretary of Education Betsy DeVos for this insanity.
Department of Education Statement
“The U.S. Department of Education (ED) has learned that some students attending institutions currently under the control of a federal court-appointed receiver have not been given their credit balance refunds for the current term as required by ED’s financial aid regulations. These schools are owned by Dream Center Education Holdings (DCEH) and include Argosy University (Argosy), The Art Institute of Pittsburgh, The Art Institute of California–Hollywood, The Art Institute of California–San Diego, The Art Institute of Las Vegas, and The Art Institute of Seattle. ED expects the receiver, who has control of the institutions and their finances, to resolve this situation.
These institutions have been on the Heightened Cash Monitoring 1 (HCM1) payment method status since 2007. On Jan. 25, 2019, the schools were placed on the HCM2 payment method to provide additional oversight of the institutions.
A school may be placed on HCM1 or HCM2 as a result of a change in ownership or for compliance issues, such as concern about a school’s administrative capabilities or financial responsibility. Once a school is subject to a receivership order, ED promptly places the school on HCM2 because a receivership typically results from serious financial difficulties.
On HCM2, Argosy and The Art Institute locations must disburse loans and grants—including credit balance refunds—to students from the schools’ own funds before requesting a reimbursement of those funds from ED. HCM regulations do not allow ED to provide federal student aid funds to the schools for credit balances that have not been paid or to release those funds directly to students.” – Source