What Happened to Argosy University? A Look Back at its Closure and Student Impact

Argosy University, a name that once represented higher education for many, abruptly ceased operations in March 2019, leaving a significant number of students in the lurch. This closure wasn't a quiet event; it was a sudden halt that impacted students mid-semester, sparking questions about financial stability, institutional practices, and the future for those who had invested time and money into their education. Understanding what happened to Argosy University involves looking at the reasons behind its closure, the role of its parent organization, and the lasting effects on students, particularly concerning their academic progress and financial burdens.

Key Takeaways

• Argosy University shut down suddenly in March 2019, leaving hundreds of students without their education mid-semester.

• Financial mismanagement and the university's removal from federal financial aid programs were major factors leading to the closure.

• The Dream Center Foundation's acquisition and subsequent financial issues, along with allegations of misleading students about its nonprofit status, played a role in Argosy's downfall.

• Students faced significant challenges, including unresolved student debt and emotional distress, with some loan amounts reaching hundreds of thousands of dollars.

• The closure created a crisis in Hawaii's mental healthcare system due to a shortage of licensed psychologists, as Argosy's program was a major source of graduates in the field.

Understanding What Happened to Argosy University

Argosy University's story is a complex one, marked by a sudden shutdown that left many students in a difficult position. The university, which had multiple campuses across the country, including in Hawaii, ceased operations abruptly in early 2019. This closure wasn't just a minor inconvenience; it happened mid-semester for many students, disrupting their academic progress and future plans.

The Abrupt Cessation of Operations

In March 2019, Argosy University campuses nationwide, including those in Hawaii, stopped accepting new students and effectively shut down. This move left hundreds of students mid-semester without clear guidance on how to proceed. The university's website posted notices about transcript requests, but the immediate future for enrolled students was uncertain. This sudden halt in operations created a crisis for students who were in the middle of their studies, many of whom were pursuing specialized degrees.

Financial Mismanagement and Federal Intervention

The primary reason behind Argosy's closure was severe financial mismanagement. The university's parent company had filed for receivership, and the U.S. Department of Education took a significant step by removing Argosy from the federal financial aid program. This decision was based on allegations of financial mismanagement, including a failure to distribute over $16 million in financial aid to students. The Department of Education also denied the university's proposed change in ownership, which was intended to transition the for-profit institution into a nonprofit entity.

Impact on Students Mid-Semester

Students found themselves in a precarious situation when Argosy University closed its doors. Many were in the middle of their academic terms, facing uncertainty about their credits, financial aid, and ability to transfer. The closure meant that students were left with debt but without the degrees they had been working towards. This situation caused significant stress and financial strain, as they had to figure out new academic paths while dealing with the consequences of the university's collapse.

The abrupt closure of Argosy University left a significant void for its students, many of whom were pursuing advanced degrees in fields like clinical psychology. The lack of clear communication and support during the shutdown period exacerbated the challenges faced by these students, who were already invested in their education and often burdened by substantial student loan debt.

The Dream Center Foundation's Role and Misrepresentations

Acquisition and Transition to Nonprofit Status

In 2017, the Dream Center Foundation, a faith-based nonprofit, made a significant move into higher education by acquiring Argosy University and several Art Institute campuses from Education Management Corp. (EDMC). EDMC had previously faced accusations of breaking consumer protection laws. The U.S. Department of Education gave a tentative approval for this sale, but the transition of these institutions to nonprofit status wasn't fully finalized. The Department indicated it needed to conduct a thorough review of the Dream Center's ability to manage these schools before giving final approval.

Financial Struggles Under New Ownership

Things took a turn for the worse financially for Argosy University shortly after the acquisition. Within a year, the university found itself in a difficult financial position, facing insolvency. This financial instability led the Department of Education to revoke Argosy's eligibility for federal student aid in February 2019. The Department also denied the proposed change in ownership. Just a month later, Argosy University abruptly closed its campuses. While the Dream Center managed to sell some Art Institute locations, others also ceased operations.

Allegations of False Marketing to Students

Following the closure, attorneys general from multiple states accused Argosy University and its owner of misleading students. A key point of contention was that Argosy's website advertised the university as a "nonprofit academic institution" even though the official conversion to nonprofit status had not yet been approved by the Department of Education. This created a false impression for prospective students. Furthermore, the Dream Center reportedly announced campus closures via email in July 2018 without providing specific dates or clear information about students' options. Later communications about student choices, including the possibility of requesting closed school loan discharges, were also criticized for lacking clarity. This lack of transparency left many students confused and without proper guidance during a critical time.

The situation highlighted a broader issue within higher education, particularly concerning for-profit institutions and their transitions to nonprofit status. The Department of Education has since focused on tightening regulations to address such practices and protect students from misleading information and financial harm.

Many former students, like those who attended Argosy University, found themselves burdened with student debt but without the degrees they had paid for. This experience can be incredibly disheartening, especially for individuals who, like a former army member who enrolled at Argosy University believing it was a solid choice after his service, had their educational paths disrupted through no fault of their own. The struggle to find clear information about loan discharges and future educational pathways became a significant challenge for those affected by the closure.

Consequences for Students and Their Debt

When Argosy University abruptly ceased operations in 2019, it left thousands of students in a precarious financial and academic position. Many were in the middle of their studies, facing not only the disruption of their education but also the significant burden of student loan debt accrued for a degree that might never be completed or recognized. The closure triggered a cascade of financial problems for former students, many of whom had taken out substantial loans to cover tuition and living expenses.

Student Loan Cancellations and Settlements

In the aftermath of the closure, efforts were made to provide some financial relief to affected students. A settlement reached by ten state attorneys general with the owners of Argosy's student debt resulted in the cancellation of approximately $2.1 million in loans that Argosy had directly issued to students. This agreement aimed to address some of the financial fallout for those who attended the now-defunct institution. However, the scope of this settlement was limited, and many students were still left grappling with their loan obligations.

The Burden of Unresolved Student Debt

For a significant number of former Argosy students, the closure meant that their federal loan relief applications, particularly those under the borrower defense to repayment program, were either delayed or denied. This left them responsible for large sums of money, often hundreds of thousands of dollars, for degrees that were incomplete or of questionable value. Many former students found themselves in default on their loans, leading to wage garnishment and the seizure of tax refunds or even portions of Social Security benefits. This situation created immense financial strain, making it difficult to cover basic living expenses or plan for the future. Some students, like Valerie Scott who owed $389,000, expressed that their entire earnings went towards loan repayment, leaving them with nothing to call their own. It's important for students to understand that using student loans to buy a car is generally ill-advised, as loans are meant for educational expenses using student loans to buy a car.

Emotional and Financial Strain on Graduates

The closure of Argosy University had a profound emotional and financial impact on its students. Beyond the debt, many felt a sense of betrayal and shame, believing they had been taken advantage of by an institution that made false promises about program costs and job prospects. The lack of a completed degree, coupled with overwhelming debt, contributed to significant stress, anxiety, and a feeling of being trapped. This emotional toll, combined with the constant financial pressure, made it challenging for graduates to move forward in their careers and personal lives, often leading to feelings of embarrassment and a sense of injustice.

Impact on the Psychology Field in Hawaii

The sudden closure of Argosy University's Hawaii campus in March 2019 sent ripples through the state's mental health sector, particularly impacting the availability of licensed psychologists. Argosy's clinical psychology doctoral program was a significant source of trained professionals in Hawaii, a state already facing a shortage of mental health providers. The abrupt cessation of operations left hundreds of students in limbo and raised concerns about the future of mental healthcare access for residents.

Shortage of Licensed Psychologists

Argosy University's Hawaii campus had been a primary training ground for clinical psychologists in the state. Over the decade leading up to its closure, the university graduated more than 260 doctoral-level clinical psychologists. These professionals were crucial for filling positions in various mental health facilities across Hawaii. With the university's closure, this pipeline of new psychologists was immediately cut off, exacerbating an existing deficit.

Crisis in Mental Healthcare Access

The reduction in the number of available psychologists directly translated into a crisis for mental healthcare access. Many graduate students from Argosy expressed fears that the closure would lead to preventable suffering and even deaths, as individuals seeking help would struggle to find qualified professionals. The situation was particularly dire for vulnerable populations, including children and adolescents, who rely on these services.

The loss of Argosy's program meant that Hawaii would likely face even greater challenges in providing timely and adequate mental health support to its population. This created a public health concern that extended beyond the immediate impact on students and the university itself.

The Role of Argosy's Clinical Psychology Program

Argosy's clinical psychology program was not just another academic department; it was a vital component of Hawaii's mental health infrastructure. The program's graduates were often employed in community mental health centers, hospitals, and private practices throughout the islands. Their departure, or the inability of current students to complete their training and become licensed, created significant gaps in service delivery. The American Psychological Association (APA) had accredited the program, adding to the shock and concern surrounding its closure. While the APA works with institutions to facilitate transfer arrangements, the situation highlighted the fragility of specialized educational programs and their impact on regional professional communities. Students affected by the closure were advised to explore options for transferring to other schools or seeking loan discharges, though the path forward was complex and uncertain for many.

Government and Institutional Responses to the Closure

When Argosy University abruptly ceased operations, it left a significant number of students in a difficult situation. In response, various government bodies and educational institutions took steps to address the fallout. These actions aimed to provide students with pathways forward and to hold accountable those responsible for the university's collapse.

Congressional Calls for Student Support

Members of Congress quickly voiced concerns over the abrupt closure of Argosy University, recognizing the immediate impact on students. Several senators and representatives urged the U.S. Department of Education to take swift action to assist those affected. Their calls focused on several key areas:

• Borrower Defense: Advocating for the prompt processing of loan discharge applications for students who were misled by the university.

• Semester Debt Cancellation: Pushing for the cancellation of debt accrued by students during their final, incomplete semester.

• Transfer Assistance: Requesting that the Department facilitate the transfer of credits and enrollment into other institutions for affected students.

• General Aid: Encouraging the provision of various forms of financial and academic support to help students continue their education.

Lawmakers highlighted that students were left with debt but not the degrees they were promised, emphasizing the need for immediate relief and accountability.

Department of Education's Actions

The U.S. Department of Education played a central role in responding to the crisis. The department had previously revoked Argosy's eligibility for federal financial aid due to alleged financial mismanagement, a decision that preceded the university's closure. Following the shutdown, the department focused on:

• Loan Discharges: Working to process claims for students eligible for loan forgiveness under programs like Borrower Defense to Repayment, especially for those who attended institutions that closed or engaged in fraudulent practices.

• Oversight of Conversions: Increasing scrutiny of transactions where for-profit institutions transition to nonprofit status, a process Argosy's parent company, the Dream Center Foundation, was undergoing.

• Information Dissemination: Providing guidance to students on their options, including how to apply for loan discharges and how to transfer credits.

Guidance for Transferring Students

For students needing to continue their education, guidance was provided on how to transfer credits and enroll in new programs. This often involved:

• Transcript Requests: Directing students on how to obtain their academic transcripts from Argosy University.

• Accreditation Review: Advising students to carefully review the accreditation status of any new institution they considered transferring to, particularly for programs like clinical psychology that require specific accreditation for licensure.

• Program Equivalency: Working with accrediting bodies and other universities to determine the equivalency of coursework completed at Argosy, to ensure a smoother transition into new degree programs.

In many cases, the Department of Education worked with other institutions to establish teach-out agreements, allowing Argosy students to complete their degrees at a different university, often under similar academic standards.

Navigating Accreditation and Teach-Out Programs

When Argosy University abruptly ceased operations, a major concern for students, especially those in programs requiring specialized accreditation like clinical psychology, was how their education could continue and if their credits would transfer. The American Psychological Association (APA) Commission on Accreditation (CoA) played a significant role in establishing pathways for these students.

Pathways for APA-Accredited Programs

Following Argosy's closure, the APA's Office of Program Consultation and Accreditation (OPCA) reached out to APA-accredited programs. They invited interested institutions to indicate their willingness to accept transferring Argosy students. Programs that agreed to take on these students had to submit details about their transfer process and how they would maintain compliance with the APA's Standards of Accreditation (SoA). The CoA reviewed these submissions, sometimes requesting further information. For a period, the OPCA maintained a public list of accredited programs accepting transfers from Argosy, which was eventually removed in December 2019.

Teach-Out Program Proposals and Review

For institutions that did not have existing APA-accredited programs but wished to offer teach-out options for Argosy students, a different process was in place. These institutions were required to submit proposals outlining their plans. These proposals detailed how the teach-out programs would be structured and demonstrated the institution's capacity to provide educational experiences aligned with the SoA. The CoA reviewed these proposals, with initial reviews of submissions from several institutions completed before the summer of 2019. A searchable database is available for the public’s use, including accredited teach-out programs for Argosy students.

Temporary Accreditation for Clinical Psychology Programs

Programs that were previously accredited by the APA but are no longer admitting new students due to closure, like some of Argosy's clinical psychology doctoral programs, can obtain an "accredited, inactive" status. This status is temporary and allows the program to continue while enrolled students finish their degrees. To maintain this status, programs must adhere to accreditation standards and submit annual renewal requests. If a program consistently meets these standards, the inactive status can be renewed yearly. However, failure to comply can lead to probation or other adverse decisions. This inactive status is specifically for programs that have ceased admitting new students, not for programs seeking to admit students who were not previously enrolled in the closed Argosy programs. Should an institution wish to attain new APA accreditation, it must follow the standard accreditation procedures, starting with a self-study and culminating in a site visit and commission review. Students seeking to understand their financial obligations should consult resources that clarify student loan usage, as some may be able to use loans for past-due tuition to complete their degrees, as discussed in articles on student loan coach.

It's important to understand that the APA does not endorse or mandate exclusive transfer agreements. When an institution closes, multiple entities, including accrediting bodies and government departments, are involved in approving student transfer plans. The APA's role is to help facilitate high-quality transfer arrangements in collaboration with these other parties.

Understanding how schools get approved and what happens when they close, known as teach-out programs, can be confusing. These processes are important for students to finish their education without interruption. If you need help figuring out these steps, we're here to guide you. Visit our website to learn more about how we can support you.

The Lingering Impact of Argosy University's Closure

The abrupt closure of Argosy University in March 2019 left thousands of students in a difficult spot, facing uncertainty about their education and significant financial burdens. Many were mid-semester, with little warning about how they would finish their degrees or recoup their investments. The situation highlighted broader issues within the for-profit higher education sector, including concerns about financial oversight and transparency. While efforts were made to help students transfer or seek loan relief, the process proved challenging for many, leaving a lasting impact on their academic and financial futures. The fallout also raised questions about the availability of essential services, like mental health professionals, in areas where Argosy programs were prominent.

Frequently Asked Questions

What caused Argosy University to close its doors?

Argosy University suddenly stopped all its classes and operations in March 2019. This happened because the school had serious money problems and was not allowed to receive federal student aid anymore. The school's parent company had also filed for bankruptcy, leading to this sudden shutdown.

How did the closure affect students who were currently enrolled?

Many students were left in the middle of their studies when Argosy closed. They didn't know if they could finish their degrees or how to transfer their credits. This caused a lot of stress and confusion for students who had already invested time and money into their education.

Can students get help with their student loan debt after the closure?

Some students might be able to get their student loans canceled if they were misled by Argosy. This is often called 'borrower defense.' Also, lawsuits and agreements with states have helped cancel some of the money students owed. However, many students still struggle with the debt they took on.

What was the impact of the closure on mental health services in Hawaii?

The closure had a big impact on Hawaii's mental health services. Argosy had a popular program for training psychologists. With the school closed, there was a worry about having enough licensed psychologists to help people, especially those needing mental health care.

What did the government and other schools do to help students?

The government, including senators and the Department of Education, stepped in to help. They offered guidance on transferring to other schools and looked into ways to help students with their loans and credits. Some programs also offered 'teach-out' plans to let students finish their studies elsewhere.

Were there any accusations of wrongdoing against Argosy University?

Argosy University was accused of not being truthful with students, like saying it was a nonprofit school before that was approved. This led to legal actions by state attorneys general, resulting in settlements that aimed to provide some relief to affected students.