Argosy's Legal Troubles: Did They Break The Law?

Argosy University was a private for-profit university with campuses across the United States. The university was owned by Dream Center Education Holdings and Education Management Corporation. In 2019, the US Department of Education cut off federal funding to Argosy University, leading to the closure of all its campuses. The university's collapse was preceded by numerous controversies, including lawsuits, investigations, and allegations of deceptive marketing practices and consumer complaints. The question of whether Argosy broke the law is complex and was the subject of legal proceedings and debates. While the university faced significant criticism and legal challenges, the ultimate conclusion regarding their compliance with the law is unclear.

Argosy University's fraudulent accreditation claims

Argosy University was a private for-profit university with campuses across the United States. It was owned by Dream Center Education Holdings and Education Management Corporation (EDMC). The university has been accused of misleading students and engaging in deceptive marketing practices.

In 2009, students of Argosy University in Dallas filed a lawsuit alleging that recruiters inaccurately informed them that the school would soon receive accreditation from the American Psychological Association (APA). The students graduated before the school completed the accreditation process, and in some cases, without having applied for it. As a result, EDMC paid $3.3 million as part of the lawsuit, though they did not admit liability.

In 2013, EDMC agreed to pay another $3.3 million in restitution and fines to settle charges with the Colorado Attorney General, who alleged that Argosy University had engaged in deceptive marketing practices. The Attorney General claimed that the university led students to believe that their Ed.D. in Counseling Psychology degrees would be accredited by the APA and that graduates would be eligible to become licensed psychologists in Colorado, when this did not appear to be true. Again, the settlement did not require EDMC to admit liability.

In addition to these cases, Argosy University has faced other accusations and lawsuits related to fraudulent accreditation claims. In 2010, a Government Accountability Office report stated that recruiters at the school made "deceptive or otherwise questionable statements" to undercover applicants. Furthermore, in 2022, Argosy University was included in a list of 153 institutions involved in student loan cancellation due to alleged fraud. The university's deceptive practices have left many students with significant loan debt and low-value degrees, impacting their ability to pursue their desired careers.

Argosy University's parent company's settlement without admission of liability

Argosy University was a private for-profit university with campuses across the United States. It was owned by Dream Center Education Holdings (DCEH) and Education Management Corporation (EDMC).

In 2019, Argosy University campuses were placed under receivership and their accreditation was at risk. This was due to financial mismanagement, with the university facing insolvency and failing to distribute financial aid to its students. As a result, the US Department of Education cut off federal funding to Argosy, and all campuses were closed shortly thereafter.

Prior to its collapse, Argosy University had been accused of engaging in deceptive practices and misleading students. In 2013, EDMC agreed to pay $3.3 million to settle charges that Argosy had engaged in deceptive marketing practices. Specifically, it was alleged that Argosy led students to believe that its Ed.D. in Counseling Psychology degrees would be accredited by the American Psychological Association, enabling graduates to become licensed psychologists in Colorado. However, this did not turn out to be true. Importantly, the settlement did not require EDMC to admit liability.

In 2022, a further settlement was reached by attorneys general in ten states, including Arizona, Colorado, Florida, Georgia, and Hawaii, to provide student loan debt relief for former Argosy students. The agreement wiped out loans taken out directly from Argosy by students who began attending on or after 17 October 2017. The attorneys general alleged that Argosy falsely marketed itself as a nonprofit institution and provided misleading information to students. Again, this settlement was reached without admission of liability.

Argosy University's involvement in the 2022 student loan cancellation

Argosy University was a private for-profit university with campuses across the United States. The university was owned by Dream Center Education Holdings (DCEH) and the Education Management Corporation. In February 2019, the US Department of Education cut off federal funding to Argosy University, and all campuses were closed shortly after.

In 2022, Argosy University was one of 153 institutions included in a student loan cancellation programme due to alleged fraud. The class action was brought by a group of over 200,000 student borrowers, assisted by the Project on Predatory Student Lending, part of the Legal Services Center of Harvard Law School. A settlement was approved in August 2022, and in April 2023, the Supreme Court rejected a challenge to the settlement, allowing the cancellation of debt due to alleged fraud to proceed.

The settlement agreement included the cancellation of $2.1 million in student loans (institutional debt) at 12 campuses and online. It also included financial relief for students in multiple states, such as $90,000 for Illinois students and more than $150,000 for Georgia students. The agreement also stated that there would be no further collection of student loan debt and no further negative credit reporting.

The allegations against Argosy University included false marketing of the school as a nonprofit institution, misleading students about their ability to obtain degrees, and providing misleading and incomplete information leading up to the school's closure. The university was also accused of issuing institutional loan debt to students based on these misleading marketing and recruitment practices.

The involvement of Argosy University in the 2022 student loan cancellation programme provided financial relief to students affected by the university's closure and misleading practices. The settlement agreement addressed the concerns of students who were left with debt and negative credit ratings without receiving the degrees they were promised.

Argosy University's non-payment of staff salaries

Argosy University was a private for-profit university with campuses across the United States. The university was owned by Dream Center Education Holdings (DCEH), LLC and Education Management Corporation.

In February 2019, the US Department of Education cut off federal funding to Argosy University, and all Argosy campuses were closed shortly after. This was due to Argosy's failure to distribute over $9 million in financial aid to its students. The US Education Department only became aware of this when Argosy used $13 million owed to students to cover payroll and other expenses.

Following the campus closings, Argosy teachers and staff revealed that they had not received their final paychecks.

Argosy University's non-distribution of financial aid to students

Argosy University, a private for-profit university with campuses across the United States, failed to distribute more than $9 million in financial aid to its students. The university was placed in receivership in January 2019 after its parent company, Dream Center Education Holdings, was unable to pay its debts.

The non-distribution of financial aid had severe consequences for Argosy students, who were unable to pay their bills, including mortgage payments, groceries, and utility bills. Some students had to resort to taking out high-interest loans to cover their expenses.

The court-appointed receiver, Mark Dottore, stated that he was working to locate the missing financial aid funds, which may have been used for other university expenses such as payroll. He emphasized that he did not have access to the funds himself and expressed empathy for the students' difficult situation.

The financial woes of Argosy University were further compounded by accreditation issues, with the university being placed on "heightened cash monitoring" by the U.S. Department of Education and facing potential loss of accreditation. The university's uncertain future added to the stress and anxiety of its students, who were unsure if they would receive their financial aid and whether the university would remain open.

The non-distribution of financial aid by Argosy University caused significant financial hardship for its students, who were left struggling to cover their basic living expenses. The situation was made more complex by the university's financial and accreditation troubles, with no clear timeline for resolving the issues and distributing the much-needed funds to the students.

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