Argosy University is withholding financial aid. Students can't pay their bills.

Facing financial woes and accreditation issues, Argosy University campuses across the country have not paid millions in promised financial aid to students this semester.

Students at the private, nonprofit university told The Arizona Republic that they're missing mortgage payments, going without books required for classes and skipping grocery runs. 

In all, more than $9 million in financial aid has not been distributed to students, a court-appointed receiver said, and it's unclear where the money is. 

Cynthia Morgan, a doctoral student in professional psychology at Argosy in Phoenix, said she has not received about $11,000 in scholarships and federal loans she's owed. 

She's been waiting since December for a stipend payment for an alumni scholarship she was promised. 

Because she hasn't received the money, she was late on her January mortgage payment. She wrote a bad check to her mortgage company in hopes of avoiding a missed payment that would ding her credit. 

After the check bounced, she took out a high-interest loan to get the money needed to pay her mortgage. 

February's mortgage payment is already past due, Morgan said.

"At the end of the month, it will be absolutely desperate for me," she said.

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'I do not have this money,' but I'll help, receiver says

Argosy's parent company, Dream Center Education Holdings, entered receivership in January after it was unable to pay debts. In receivership, a person appointed by the court handles the university's assets and debts, in hopes of improving the financial situation.  

In meetings with students and in emails, school officials have blamed the late financial aid disbursements on that receivership.

Mark Dottore, the court-appointed receiver based in Cleveland, said he’s working to figure out where the financial aid money is.

Some, but not all, of the $9 million in federal financial aid was sent to Argosy campuses from the U.S. Department of Education, Dottore said. He isn’t yet sure where the money has gone, but suspected it could have been used for other university expenses like payroll, he said.

Dottore inherited the case when he was appointed by the courts about two weeks ago, he said.

“We’re still trying to determine whose fault it is,” Dottore said. “All I know is, I haven’t been here long enough for it to be mine.”

Dottore said he hopes to have a resolution within the “next day or so.”

“I do not — repeat, do not — have this money, nor would I be hanging onto it if I had,” he said.

He said he feels horrible for students stuck without their money. If their landlords or utility companies are coming knocking, he said students should call him, and his company will directly reach out to explain the situation. (Contact information is on his website.)

“When I find it, the second I have access to it, I’ll give it to these students,” Dottore said.

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'It's going to ruin us'

The money is hers, not the university's to keep, Morgan said. And she's now having trouble getting in touch with university officials by phone or email to ask questions about what's going on. The university has given no timeline for when the students will get their money. 

"They can't keep stringing us along. It's going to ruin us financially," Morgan said. 

Shannon Quinn, also a doctoral student in professional psychology in Phoenix, was working two jobs, one full-time and one part-time, while attending classes last semester. The university recommended she reduce her work hours to focus on the program, so she did, expecting to depend on her financial aid for living expenses.

Now, she’s missing $11,000 in federal aid that Argosy hasn’t paid out to her.

“My car payment isn’t paid. I haven’t bought groceries, like real groceries, for a couple weeks because there’s no extra money. Cox (cable and Internet) bill is due. T-Mobile bill is due. I’ve pushed those out as long as I can,” Quinn said.

Argosy did not respond to requests for comment. Phone numbers associated with the university went straight to voicemail.

On-campus undergraduate programs at Argosy cost about $550 per credit hour. For a full-time course load of at least 12 credits, that's $6,600, according to tuition rates posted on Argosy's website. 

For the psychology doctorate program, the cost is $1,162 per credit hour, or nearly $14,000 for a 12-credit course load. That doesn't include fees or textbooks.  

Missing rent, daycare payments

Students from San Francisco, Chicago, Virginia and Florida have reached out with stories about their missing money.

Lindsay Johnson, a doctoral student at Argosy’s Twin Cities campus in Minnesota, said she’s missing about $1,800 in federal financial aid.

She lives with her parents and her daughter, but has to pay for food for her and her daughter. She said she has used credit cards while she’s waiting for the money to come in.

Andi Colker, a doctoral student in Illinois, said she’s waiting on nearly $8,000 in federal financial aid.

Students from campuses across the country described missing rent payments, not being able to afford gas and food, not being able to afford daycare for their children.

Feds: He has the money

Minnesota’s Office of Higher Education has stepped in to help Argosy's Twin Cities students, said Betsy Talbot, the office’s manager of institutional registration and licensing.

The office is acting as a resource for students who have questions and is communicating with the U.S. Department of Education, Argosy and the receiver, Talbot said.

The office hasn’t been able to get the receiver to issue funds to students in the past week, Talbot said.

“Those are amounts that don’t belong to Argosy. They don’t belong to the receiver. … They belong the students,” she said.

Talbot’s account of where the money is differs from that of the receiver, Dottore.

An email to Talbot from the U.S. Department of Education seems to say the receiver has the financial aid funds. The email was obtained through a public records request.

“I have had daily calls with the receiver, but as of last night he hadn’t released the stipends. We have emphasized to him that this must be done, but we are also consulting with our legal team to figure out what next steps we can take legally if it doesn’t happen,” Diane Auer Jones, the deputy undersecretary, wrote to Talbot on Wednesday.

A follow-up call to Dottore’s office was not immediately returned.

Unpaid debts: When Argosy's financial woes started

Court documents show Dream Center Education Holdings entered receivership in January after it was unable to pay outstanding debts to multiple creditors. 

In Dream Center's case, a creditor in Ohio took it to court after debts of more than $250,000 weren't paid. Through the course of that case, it became clear Dream Center had millions in unpaid debts to various other entities.

Dream Center also is "indebted to other secured, trade and unsecured creditors for a sum in excess of $100,000,000," one court filing said.

Dream Center has defaulted on financial commitments nationwide, one court filing said. Landlords have started to evict the college, the filing said.

Argosy also was placed on "heightened cash monitoring" by the U.S. Department of Education, which is done to "provide additional oversight of cash management," the department's website says. 

What is Argosy University — and where?

Argosy is owned by the nonprofit Dream Center Education Holdings, the same company that owns Art Institute campuses.

The school offers undergraduate, graduate and doctoral programs and teaches both online and in person. 

The school has 16 branches in 11 states, its website shows. It is based in Orange County, California. 

In Phoenix, Argosy's website lists an address on Black Canyon Highway and asks potential students to "set up a time to come see our school and take a tour."

The address listed is an office space in a commercial center that doesn't appear to house any Argosy classes or administration. The sign outside the suite said "Brown Mackie College" and the suite was dark, with no people present, on Thursday morning. 

Students are attending classes on 25th Avenue, according to an email sent to students in January, at the same address where Kansas-based Ottawa University, a Christian liberal arts college, has a satellite location.

Multiple students told The Republic that the university was using a handful of classrooms at Ottawa and didn't have access to computer labs or all of the equipment or books needed for their courses. 

Accreditation at risk

The financial woes have spurred potential action by Argosy's accreditor, the WASC Senior College and University Commission. 

The accrediting body sent a letter to Argosy on Jan. 19 that mentions the receivership and heightened cash monitoring. These factors give the commission a "reasonable basis" to conclude Argosy isn't in compliance with its accreditation rules, the letter said. The university must show why it should be allowed to keep its accreditation, the commission said.

If Argosy doesn't show within one year that it is in compliance, the commission will terminate its accreditation, the letter said. 

For students, the stress of missing financial-aid funds is compounding with uncertainty about where the university is headed — and whether it will stay open. 

“There is a lot of just stress right now. And fear of the unknown,” said Morgan, the psychology doctoral student. 

Follow Rachel Leingang on Twitter: @RachelLeingang.