A Doctorate Deferred

March 9, 2019 7:51 AM

Argosy University (a collection of schools including American School of Professional Psychology, the Medical Institute of Minnesota, and the University of Sarasota) managed by Dream Center Education Holidings shuttered its doors (NYT) on 3/9/2019. (WP)

26,000 students in programs spanning associate degrees in dental hygiene to doctoral programs in law and psychology. The Chicago Tribune describes the scene at the Chicago Branch, in which doctoral students cleared out their offices with no concrete plans for completion, some were just months away from graduation.

13 million in students loans were not disbursed this semester, the millions of student money being used for other purposes. There is lots of scrambling, but few answers or promises of assistance.

The has been trouble brewing: previously, and more previously.

posted by AlexiaSky (21 comments total)

This makes me so upset and angry
posted by nikaspark at 7:57 AM on March 9, 2019 [4 favorites]

Led by Secretary Betsy DeVos, the Education Department has reversed an Obama-era crackdown on troubled vocational and career schools and allowed new and less experienced entrants into the field.

In a perfect world, the families and students affected by this would be able to sue DeVoss and her ilk into dust over her policies.
posted by Thorzdad at 8:12 AM on March 9, 2019 [35 favorites]

I hate to see a school close, but I less-hate to see a for-profit school close. I understand that, in the Twin Cities at least, other local schools are stepping up to help Argosy students whose programs were in-progress. I hope that the students are able to finish their studies at other schools with as little interruption as possible.

I have no idea what will happen with the faculty and staff. This must be a nightmare for them. I hope that they're receiving some help as well.
posted by Gray Duck at 8:32 AM on March 9, 2019 [5 favorites]

This also includes many or maybe all of the remaining Art Institutes around the county.
posted by octothorpe at 8:40 AM on March 9, 2019 [2 favorites]

Just to apologize I apparently decide to post an fpp and my poor grammar skills become exponentially worse.

Bah.

My friend was enrolled in the Chicago campus, the word on the ground is they really have no idea . Hopefully the APA will step in to help them find programs to adopt them. That's basically where they are seeking assistance from at this time.

Last week most of the students didn't even know this was possible.
posted by AlexiaSky at 8:52 AM on March 9, 2019 [1 favorite]

The Art Institute of Seattle shut down this past Friday, two weeks before quarter-end. Apparently the state has already made arrangements for other schools to expedite credit transfers and financial aid...umm, aid, I guess, and there will be at least two transfer fairs next week.

Why am I not surprised there is some evangelical Christian organization behind this mess?
posted by lhauser at 9:10 AM on March 9, 2019 [3 favorites]

I learned about this through this tumblr post by plaidadder, where she seethes at the corruption of Betsy DeVos. Not news to me, but I hadn't heard about this school. DeVos might not be directly involved here, but she's a symptom of the poisoned, profiteering corruption of the currrent administration, and how it reaches its nasty fingers into everything. She's doing her damned best to get rid of any useful regulation against these schools while she gets rich off them.

This school ruined people's lives by stealing their loans and then trashing their dreams.

I will be surprised if anyone is held accountable. Betsy DeVos never will be, for sure.
posted by Kutsuwamushi at 9:20 AM on March 9, 2019 [4 favorites]

Tressie McMillan Cottom's excellent and upsetting Lower Ed: the troubling rise of for-profit colleges in the new economy takes an insider's ethnographic approach into the whole industry. As someone teaching in a public university that does a good job with supporting transfer students from community colleges, I really hope that Argosy's students can transfer their credits to accredited institutions.
posted by spamandkimchi at 9:59 AM on March 9, 2019 [8 favorites]

Losing a semester's worth of financial aid is enough to derail or destroy a person's financial present and future.
posted by shapes that haunt the dusk at 10:06 AM on March 9, 2019 [14 favorites]

The Chicago Tribune article highlights a woman with a child who lost 10,000 in aid for school for the semester- she's being evicted from her housing, owes people who supported her this semester money and has few transfer options (if any) at this time for years of labor. My friend just spent a significant amount of money traveling around the states to get her final practicum placement- and now she can't do it.

In more fun in IL full-time students aren't eligible for food stamps (with few exceptions) either. So most of these students couldn't get normal food assistance while waiting for the money they were told was due to them, but never came.
posted by AlexiaSky at 10:27 AM on March 9, 2019 [4 favorites]

Are student loans becoming the new sub-prime mortgages?
posted by oneswellfoop at 10:47 AM on March 9, 2019

Here's a non-paywalled account from Inside Higher Ed.
posted by doctornemo at 11:13 AM on March 9, 2019 [2 favorites]

Are student loans becoming the new sub-prime mortgages?

Not becoming, have already been for quite some time.
posted by soren_lorensen at 11:28 AM on March 9, 2019 [8 favorites]

Some background from 2012 on the predatory practices of EDMC the former owner of the schools before Dream Center took them over. The Art Institutes were well regarded institutions going back to the 1920s but private equity took over and turned them into money machines and sucking as much money out of the student loan system as they could:

So is the Art Institutes a scam school or a real school? After some investigation, I think the answer is this: The Art Institutes was a for-profit college that often worked, that genuinely helped many students to train for successful careers. But then, mostly during the George W. Bush Administration, the for-profit college industry aggressively lobbied Washington to eliminate any kind of accountability for schools receiving federal tax dollars. In 2002, the Bush Administration gutted enforcement of rules to prevent abusive recruiting practices. In 2006, Congress, ratifying the wishes of for-profit college lobbyists and their allies in the Bush Administration, allowed colleges that provide most their instruction online to qualify for federal student aid.

Those changes, and an overall lack of standards, skewed the incentives for for-profit college companies. A race to the bottom — a race to maximize profits by short-changing students and taxpayers — ensued. It propelled a decade of waste, fraud, and abuse with taxpayer dollars by this industry, which now hauls in about $32 billion a year in federal aid.

EDMC and the Art Institutes took a huge infusion of Wall Street cash and joined in, and in the process have trashed their own institution. Lorna Hernandez says the Art Institute of Fort Lauderdale was “wonderful” when she started in 1994, until, a couple years later, EDMC become a publicly-traded company. It got much worse, she says, after EDMC sold itself to a group of private equity investors, with Goldman, for $3.4 billion in 2006. And today it gets worse every month.

posted by octothorpe at 11:31 AM on March 9, 2019 [7 favorites]

Probably the worst thing I've done in my life was recovering the library fine records for one of the EDMC schools after they were accidentally deleted. You always think you're going to be righteous and moral, and then along comes some little challenge that you can't say no to.
posted by wotsac at 3:35 PM on March 9, 2019 [3 favorites]

We have/had (I don't know what the current state is) a big EDMC office here and about 5 years ago I was attempting to do a career pivot into instructional design. I really needed a job because my grant was ending and I was going to be SOL in a matter of a couple months. I never applied there and fortunately found the great job I now, but I did a lot of late night soul searching about what I'd do if it came down to unemployment vs. EDMC.
posted by soren_lorensen at 6:08 PM on March 9, 2019 [4 favorites]

We were just talking about student debt two weeks ago here. As I said in that thread, DeVos was sued by students whose schools(autoplay video) had closed because she was not implementing Borrowers Defense for Repayment and the judge ruled she had to implement it.

What I don't know is if they have to report that cancelled debt on their taxes, but I assume they do.
posted by soelo at 8:52 PM on March 9, 2019

At least with disabled forgiveness, the IRS will waive the tax penalty for the forgiven debt . What the formula is to determine if it's waived I'm not sure.
posted by AlexiaSky at 11:16 PM on March 9, 2019

I don't believe it would be taxable. Strictly speaking, it's not cancelled debt. It's a payment you don't owe because you were defrauded in the purchase of the services. That is, if you refused to pay, you were sued, you asserted fraud as a defense, and the court found in your favor--which is the original conception of borrower defense--you wouldn't owe taxes for the "unpaid debt," because you never actually owed the money; the court would not have "cancelled the debt" but rather found that the original contract was void.
posted by praemunire at 3:36 PM on March 10, 2019

(Also, insert my recurring plea: if you are having problems with your loan servicer, please contact your state AG and the CFPB. They can't act as your individual attorneys but enforcement priorities can definitely be affected by consumer complaints and complaints from sophisticated people who save documents are like gold for them. Especially do this if your problem is with FedLoan/PSLF.)
posted by praemunire at 7:57 PM on March 10, 2019 [1 favorite]

So is the Art Institutes a scam school or a real school?

If my experience with my stepson is any guide, scam. Looking through the high pressure sales it was very clear that if he went that way, he'd be left with as much if not more debt than if he went to a regular college. And questions like 'what are the percentage of your grads that got jobs in an artistic field after graduation' were met with handwaving and evasion.

Fortunately, he pick another path.
posted by kjs3 at 12:44 PM on March 13, 2019