TAMPA — Argosy University, with an enrollment of 450 and an iconic cigar-factory campus off Interstate 275 in Tampa, has been ordered to explain whether it can stay afloat financially or face the loss of its accreditation.
Students still are attending classes at the Tampa campus of the California-based school, which has operations coast to coast, but Argosy officials must meet in the next 90 days with their accrediting agency, WASC Senior College and University Commission, according to a letter from the commission.
The demand comes on the heels of federal court action in Ohio, where Argosy — along with South University and their parent company, Dream Center — has been placed in federal receivership in connection with more than a quarter-million debt owed to one creditor and more than $100,000 in debt to others, according to documents filed Jan. 18.
Their financial troubles create an "imminent danger of damage" to the universities' stakeholders, including students, according to the federal filing, and receivership allows for the pursuit of remedies while assets are safeguarded through an appointed custodian.
Argosy offers a wide range of bachelor's, master's and doctorate degrees and has an enrollment of about 450 students at its Tampa campus, 85 percent of them adult learners and working professionals age 25 to 64, according to the school's website. South University, which operates online only, also advertises a Tampa operation.
Neither university replied to a request for comment from the Tampa Bay Times.
The Times obtained an email to Argosy students Thursday that seeks to calm their fears about the school's finances, sent by Chancellor Cynthia Baum of Santa Ana-based Argosy.
"We are continuing to work with accreditors, state regulators and the U.S. Department of Education to provide favorable outcomes for our students," Baum said.
Student Alberto Fançon, who is pursuing a doctorate of business administration from Argosy, said Monday at the university's North Howard Avenue campus that he isn't too concerned.
"There was a change of ownership of the university," said Fancon, 58. "They just have to go through accreditation and stuff like that."
Still, in a letter on its website sent to Baum, WASC Senior College and University Commission issues a stern warning to the university. Unless Argosy can demonstrate "that it has the financial resources to assure its continuance," it can lose its accreditation within one-year, wrote WASC president Jamienne Studley.
"We haven't determined when we will meet yet," Studley told the Times. "We are in contact with them regularly but haven't decided on the timing of that."
South University is accredited by another organization, Southern Association of Colleges and Schools Commission on College in Decatur, Ga. If the university does not "meet accreditation standards, they could lose it," said commission spokeswoman Pamela Cravey. Cravey declined to elaborate.
Failure to maintain accreditation puts at risk the federally subsidized student loans that private nonprofit and for-profit universities rely upon for their revenues. Lack of accreditation also diminishes the value of a degree for graduates seeking employment.
The Dream Center Foundation of Los Angeles announced in October 2017 that it was taking over the for-profit South University, Argosy University, Western State College of Law and Art Institutes campuses and turning them into nonprofit institutions.
Tampa's Art Institute is no longer affiliated with Dream Center.
Within 60 days of the acquisition, according to the court documents in Ohio, the Dream Center discovered that revenues from the institutions fell far short of projections provided by previous owner Education Management Corp.
As a result, Dream Center has defaulted on financial commitments coast to coast, including money owed to landlords who have started eviction proceedings, according to the documents.
Argosy University occupies the historic Berriman-Morgan Cigar Factory, owned by Nicholas Jammal. Jammal declined to comment on Argosy when reached by the Times.
South University, headquartered in Savannah, lists an address at 4401 N. Himes Ave., Suite 175, in Tampa. The building's owner, Highwoods Properties, declined comment.
Education Management Corp. filed for bankruptcy last year. In 2015, the company was accused of predatory recruitment and enrollment and ordered by the courts to forgive $6.5 million in student debt in Florida and $100 million throughout the United States.
Times senior news researcher Caryn Baird contributed to this report. Contact Paul Guzzo at firstname.lastname@example.org or follow @PGuzzoTimes.