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Fed court says Argosy students facing $13 million in unpaid stipends

Argosy University is located on the ground floor of the Haleck Building in Ottoville.
fili@samoanews.com

Pago Pago, AMERICAN SAMOA — Argosy University students are not getting their stipend, under the student financial aid from the US Department of Education (USDOE), and the federal court appointed Receiver has requested a drawdown of $13 million from USDOE, according to the latest filings at the federal court in Cleveland, Ohio, which is overseeing a complaint against Argosy’s parent-company, Dream Center Education Holdings (DCEH) LLC.

“The most critical need is to pay the $13 million of Argosy student stipends,” wrote court-appointed Receiver, Mark E. Dottore, in a Feb. 7th letter to USDOE Principal Deputy Undersecretary, Diane Auer Jones.

According to Dottore, the Receiver's cash balance is just over $3.81 million and this is “clearly not adequate to pay the $13 million of stipends due to Argosy students, and the situation must be urgently addressed.”

Dottore also shared with the court the Receiver’s plan in order to — among other things — pay student stipends, complete the semester, and meet other regulatory requirements of the USDOE and US Justice Department.

Among them is requesting a $13 million drawn down of the $21 million in available funds, for a one-time exemption from normal rules “for the sake of students who are in extreme need,” he wrote.

“Once the stipends are paid, on behalf of Argosy, the Receiver plans to apply for the remaining $7 million in [federal] G5 funds,” he explained further. “These funds, combined with existing balances of approximately $3.8 million, will fund Argosy operations and payroll for the remainder of the semester.”

Also cited in the letter is the Receiver’s plans to address financial matters for other universities, owned by DCEH.

Dottore’s letter was included in a motion filed Feb. 12th by four students, who are intervenors in the complaint. The motion asks the federal court for an emergency status conference hearing and produce records “to address the apparent loss of over $9 million” in federal student aid funds that belong to students.”

“Students at schools subject to the Receivership are reporting that the student loan stipends they rely on to pay living expenses, which belong to the students not their schools, have not been distributed,” according to the intervenors, who are represented by the National Student Legal Defense Network.

US Magistrate Judge Thomas M. Parker on Wednesday this week denied the motion, and ordered the Receiver to provide a status report on or before Feb. 19th regarding the student loan stipends and/or the steps being taken to distribute the stipends.

The latest round of court filing doesn’t show any specifics for Argosy University’s Hawai’i campus, which oversees the American Samoa branch.