Students at Minnesota's Argosy University campus brace for possible closure

Sara Elyamany and her classmates in the dental hygiene program on Argosy University's Eagan campus have started taking home their cleaning instrument kits instead of leaving them at the school overnight. They fear that any day they could come to school and find the doors locked.

Local students of the for-profit university system specializing in career training are grappling with uncertainty as it teeters on the verge of closure. John Slama, the president of the Eagan campus, wrote students Wednesday evening to let them know the campus will close Friday if it does not find a buyer by then.

Last month, Argosy's parent company went into receivership, a kind of bankruptcy. In short order, the federal government and the state of Minnesota cut the school off from receiving loans and grants for its students — dealing what promised to be a fatal blow.

Students in Eagan and at other campuses across the country have reported that Argosy withheld thousands of grant and loan dollars, apparently to help cover its operating expenses. More than $1.3 million is owed to Minnesota students alone.

The Minnesota Office of Higher Education estimates about 100 of just more than 1,000 students on the Eagan campus have left in recent weeks. But other students say they are staying put to make sure they qualify for loan forgiveness if the campus closes.

"We feel betrayed by our school for not informing us of their financial troubles earlier and not letting us know that we may not graduate," Elyamany said. "They have been giving us false hopes and leading us on."

A string of private for-profit colleges in Minnesota have closed in recent years, including Globe University/Minnesota School of Business, ITT Technical Institute and the McNally Smith College of Music. These closures were brought on by financial implosion or charges of misleading or fraudulent practices. For-profit schools rely heavily on federal financial aid for their students to stay in business, so getting cut off is a grave threat to their survival.

In 2017, Dream Center Education Holdings, a Los Angeles-based Christian nonprofit, bought the Argosy network from an operator mired in legal and financial troubles. A plan to convert the schools into nonprofits has sputtered, and some campuses have closed. Argosy now has almost two dozen campuses nationally serving about 10,000 students.

Last week, the federal government disqualified the university's students from receiving publicly subsidized loans and other aid — a decision Argosy can appeal. Soon after, Minnesota ended the Eagan campus's participation in state grant and loan programs starting May 30. The state has also blocked new enrollments.

At issue are an estimated $16 million in loan credit-balance payments — federal dollars some students borrow beyond the cost of tuition and fees to help with living expenses — that Argosy has withheld from students. In Minnesota, the campus has also withheld so-called SELF loans that students have taken out.

"To not have those funds for some students is catastrophic," said Betsy Talbot, a manager at the state Office of Higher Education. "It's very challenging for our office not to be able to give them the information they need."

Last fall, Kari Norville, a psychology student at Argosy slated to graduate in December, got a $9,000 SELF loan. She relies on the money to tide her over during the sluggish winter months in her job as a real estate agent.

The university got the money in January, and when it did not pass it on right away, she wondered whether the federal shutdown at the time had caused the delay. Then she found out about Argosy's receivership. She started reaching out to other Argosy students on social media and hearing similar stories from as far as Hawaii.

"It's been really frustrating and disheartening and stressful," Norville said. "I feel it's the students vs. the school."

She and other students reported pressing financial aid officials at the school for answers and getting only apologies, sometimes through tears. One local echocardiography student, who asked to remain anonymous, said the school has withheld from her almost $10,000 from federal and SELF loans — but charged her $7 when she recently ordered a copy of her transcript. She said after she shared with financial aid staff that she was three months behind on rent, someone sent her a $25 Hy-Vee gift card in an Argosy envelope.

Elyamany, the dental hygiene student, speaks highly of the program and her instructors. But she says Argosy never applied about $2,000 in federal and state loans to her account balance, even after she received a Feb. 6 e-mail from Argosy's chancellor, Cynthia Baum, assuring students the school is "working diligently to correct the matter."

More troubling still is the prospect of not graduating: Elyamany is just six weeks away from completing her degree and has a job lined up starting May 30. She has already checked with other local dental hygiene programs and found out she would need to redo extensive coursework if she transfers.

In response to an interview request, Dream Center provided a statement last week from Mark Dottore, Argosy's court-appointed receiver, expressing disappointment with a U.S. Department of Education decision to deny a change of ownership request.

"We are working to determine the best path forward for students at this time," the statement said.

The state Office of Higher Education has fielded numerous calls from distraught students, at one point alerting students on its website that it was struggling to return each of them. Talbot says the agency has worked to prepare for an abrupt closure, securing student records and working with other local institutions to set up transfer pathways. On Wednesday, Hawaii state officials announced that the local Argosy campus is shutting down Friday.

But Argosy offers some programs, such as radiation therapy and histotechnology, which are either not offered locally or are full on other campuses. Talbot said her office is looking for another institution that might acquire Argosy's entire dental hygiene program.

Some students said they plan to stay put until the campus closes. The federal Department of Education has said all Argosy students will receive "discharges," a type of loan forgiveness, for their spring semester loans. But students who successfully transfer and graduate from other programs would not qualify for broader loan discharges.

Norville secured a copy of her transcript and looked at other local programs, but meanwhile, she said, "My gut is telling me to stay with the sinking ship as long as possible to get any help."