Legal Education

Argosy receiver says he's working on finding buyer for Western State College of Law

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After going months without federal loan money, students at Western State College of Law, which is part of the embattled Argosy University system, learned Wednesday that the receivership for their school will continue.

The U.S. Department of Education in February pulled the schools’ federal financial aid, based on allegations that its parent company had used approximately $16 million in federal financial aid stipends to cover payroll and other expenses. The U.S. District Court for the Northern District of Ohio in January appointed Cleveland lawyer Mark E. Dottore as the receiver, and both the U.S. Department of Justice and National Student Legal Defense Network, a nonprofit group that focuses on students’ rights issues, have asked the court to remove Argosy to bankruptcy court. Following a March 11 emergency hearing, U.S. Magistrate Judge Thomas M. Parker on Wednesday published an amended order leaving Dottore in place.

Dream Center Education Holdings, a California group associated with a religious organization founded by the Pentecostal evangelist Aimee Semple McPherson, bought Argosy from the Education Management Corp in 2017, and since then it has struggled to convert the for-profit college to a nonprofit, the New York Times reported.

Michael Royer, a Western State 3L, says that initially, students were told the school wasn’t closing, and leaders were working on getting the financial aid released. By March, he says, the message was that the law school would be closing, and they were hoping to keep the doors open until March 22.

The environment at Western State has “almost turned into a Lord of the Flies mentality,” says Royer, because students aren’t getting any guidance from administration, and people are panicking. A single father with two children, ages 2 and 3, his last financial aid disbursement was in August. Since then, Royer says that he’s been living off of credit cards and income from a part-time clerk position at Sasooness Law Group, a plaintiff personal injury firm.

“It’s very frustrating, we don’t really know what is going on,” says Royer, adding that he only needs a few more credits to graduate from the Irvine, California, law school. If the law school stays open until March 22, he’s hoping he can finish his coursework by then.

Allen Easley, Western State College of Law’s dean, did not respond to an interview request. In a statement sent to the ABA Journal Tuesday, Dottore said that Dream Center Education Holdings has identified a potential buyer for the law school.

“We have been working day and night since the institution entered into receivership to find the best path forward for students at Western State College of Law at Argosy University,” the statement read. “We have identified a potential buyer for the law school and are working diligently to secure approvals for the acquisition, with the goal of ensuring students can continue their studies uninterrupted.”

Royer was dubious about the law school finding a buyer because he’s been hearing that for almost two months.

“It doesn’t seem too promising to me. I’m hoping for the best but preparing for the worst,” he wrote in a text message to the ABA Journal.

The students received a memo from the ABA’s Section of Legal Education and Admissions to the Bar, dated March 4. The communication stated that Western State College of Law is an ABA-accredited school, and will remain so “unless and until” the section’s council formally removes the approval.

“The authority and options available to us as the school’s accreditor are limited, but we are making ourselves available to assist as we can, including with respect to issues relating to the receivership and the disbursement of student loan money to students and to the law school itself,” wrote Barry Currier, the ABA’s managing director of Accreditation and Legal Education.

Additionally, the WASC Senior College and University Commission, a regional higher education accrediting agency that oversees California, recently announced on its website that Chapman University’s law school welcomes inquiries from Argosy students.

For Western State students enrolled in its master’s of law compliance program, a transfer option was being offered by the Santa Barbara & Ventura Colleges of Law, a non-ABA approved school with California accreditation. According to a statement from the TCS Education System, which includes the Santa Barbara & Ventura Colleges of Law, its administration was contacted March 11 by Western State, regarding transfer options for JD students.

“TCS Education System and its partner colleges are not looking to acquire Argosy University, including Western State College of Law. Our focus is helping Argosy students during this challenging transition period to find alternative pathways to complete their degree,” the statement reads.

Western State College of Law has a total of 419 students, according to its 2018 509 report. Its median LSAT score is 148, and the law school has an ultimate bar passage rate of 81.48 percent, according to ABA data. Out of 73 graduates in the class of 2017, 32 had long-term, full-time jobs that require bar passage, and 6 had long-term, full-time JD-advantage positions, according to the school’s employment summary.

“It’s a fairly good quality law school. I’ve gotten to know some of the students in the last few weeks, and they are good students. So it would be a positive thing if the law school finds a buyer,” says David Halperin, a Washington, D.C., lawyer, who works with students on for-profit college issues and writes at Republic Report.

The problem, he adds, is that the Department of Education under the Trump administration has given “free reign” to for-profit colleges, and the agency is poorly managed.

U.S. Secretary of Education Betsy DeVos has removed many Obama administration regulations that cracked down on for-profit colleges, the Washington Post reported, and the agency has plans to eliminate or modify other requirements regarding the for-profit education industry.

“Dream Center had no experience in higher education, and that’s something that definitely should have raised red flags for the department,” says Clare McCann, a deputy director for federal higher education policy with the political think tank New America. During the Obama administration, she was a senior policy advisor in the department.

Besides the law school, the Dream Center operated Argosy Universities, many of which offered graduate psychology programs, and Art Institutes campuses across country. Twenty schools are now officially closed, according to the Argosy website.

“I think in particular for the law school and Argosy’s PhD and clinical psychology programs, it’s going to be difficult to find teach-out options that will work for those students,” McCann says.

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