‘Ruined’ and Evicted: How Dream Center Closures Are Affecting Students

Joe Buglewicz for The Chronicle

Kendrick Harrison enrolled in a business-degree program at Argosy University, a for-profit institution, with dreams of becoming an entrepreneur. Going to college, he assumed, meant achieving a better life for him, and also for his wife and their six children.

Instead, Harrison, who is disabled and a veteran of the Iraq War, found himself in a Las Vegas courthouse this week, fighting off an eviction notice. Argosy University suddenly went out of business on March 8, displacing him and thousands of others. Along the way, the college illegally kept millions of dollars in financial-aid money that was supposed to be disbursed to students like him, according to federal officials.

It was a brazen act, one that the U.S. Department of Education said demonstrated “a blatant disregard of the needs of its students.”

In Harrison’s case, it was $2,449.15 that simply never arrived.

“I was defrauded out of several thousand dollars, out of my military VA funds,” Harrison, 36, told Holly Stoberski, justice of the peace pro tem, in court on Wednesday. Harrison, who enrolled in Argosy three and a half years ago, said the university “strung me along.” He cited emails in which administrators repeatedly promised him the money would be paid out, promises that were never kept.

Stoberski expressed sympathy but ultimately couldn’t do much to change the circumstances. “Life circumstances happen to everyone,” she said.

“Roommates move out. People lose a job. The person who is paying the rent passes away,” the judge said. “Unfortunately, the law does not consider those to be a legal defense to why rent has not been paid.”

The Harrison family was given 10 days to leave their home.

After the hearing, Harrison said he never imagined a college would betray him in this way.

“This school really ruined my life,” he said.

Listen to Kendrick Harrison speak about his experience with Argosy U.

‘This Will Continue to Happen’

It’s been a week since Argosy’s parent company, the nonprofit Dream Center Education Holdings, closed college campuses around the country, displacing thousands of students. The shock waves continue to reverberate.

The sudden closure has brought fresh scrutiny to the Trump administration and the education secretary, Betsy DeVos, who allowed the Pentecostal-affiliated, nonprofit Dream Center to purchase dozens of for-profit campuses in 2017. The department approved the sale even though Dream Center, with no experience in higher education, would be taking over the management of colleges that were already troubled and had been repeatedly accused of unethical business practices.

In addition to the Argosy University closure, most campuses of the Art Institutes — also operated by Dream Center — shut down last week, too.

Nearly $13 million in Pell Grant and federal loan money meant for students was improperly taken by Argosy University, according to the Education Department, and used to cover payroll and overhead expenses.

The misappropriated money has been a frequent topic in federal court, where Mark Dottore, a court-appointed receiver, has been managing what remains of Dream Center’s assets. Dottore, previously a paid consultant to Dream Center, took over as receiver in January, after a creditor sued over money the college operator owed.

In a February report to the court, Dottore wrote that he and others were “fielding hundreds of calls a day from students facing eviction, impacted by repossession, unable to pay child care, and unable to provide for their families as a result of these funds not being released.”

Dream Center’s other nonprofit activities are generally focused on helping the poor — distributing free food and clothing, for example. The nonprofit also operates a transitional-housing program for homeless families.

Yet, after Argosy and the Art Institutes collapsed, many of Dream Center’s own former students say they are now on the verge of homelessness because of the college chain’s actions.

Neither Dottore nor anyone else has publicly identified who at Argosy ordered that the student funds be taken. Dottore’s office referred The Chronicle to a Dream Center spokeswoman, who wrote via email: “At the direction of the court, an investigation is being conducted into financial-aid concerns at Dream Center Education Holdings. It is not yet known what the recoveries will be.”

David Schreiber, a former campus director at the Art Institute of California’s Hollywood location, said the missing student stipends were also a problem at Dream Center’s Art Institute campuses. Throughout the final term of classes, from January until the closure last week, he said, several hundred students at the Southern California campus were complaining about not receiving their stipend money.

Schreiber said that Dream Center’s leaders had a reason to hold onto the student funds: Keeping the money would falsely inflate the college chain’s financial books at the exact time that it was seeking a buyer for its floundering campuses.

A few Art Institute campuses were sold to new owners in the final months before Dream Center went under.

“They were using the stipends to make their books look better,” Schreiber said, “and to line their pockets and take exorbitant fees.”

“It was widespread,” said Schreiber, who worked for the Art Institutes for 19 years. “And it was across the entire system of schools.”

Schreiber said Dream Center stiffed him, and countless other employees, of their final paycheck. He was supposed to get paid a week ago. Some employees received an email from Dottore on Friday that acknowledged delayed paychecks, which he blamed on Dream Center’s “financial circumstances.”

“We recognize the importance of receiving your pay in a timely manner and are doing everything we can to expedite payment to you for the funds you are owed,” Dottore wrote.

Lives Turned Upside Down

As Harrison and his wife wrapped up their eviction hearing in Las Vegas, the judge offered a minor consolation: If they left their four-bedroom house within 10 days, they would not have an eviction on their record. The judge also noted that they wouldn’t have to pay the thousands of dollars in past due rent.

But the Harrisons weren’t happy about leaving their landlord in the lurch.

“We will pay you guys when we get our money,” Harrison’s wife, Michelle, said through tears to the landlord’s family in court.

It wasn’t that long ago that the Harrisons had talked about buying a house. The couple were working on their credit, and the business degree from Argosy was supposed to help them expand a fledgling nonprofit business that they run, which focuses on sports programs for at-risk youth.

Kendrick Harrison said Argosy did more than just hold on to his stipend check. He also accused the college of keeping thousands of dollars more in GI Bill money than it was entitled to. All told, Harrison said, he was swindled out of roughly $15,000. Dream Center did not immediately respond to a request for comment.

Relocating to a new home will probably mean switching the children, whose ages range from 6 to 16, to new schools in the middle of the school year.

Harrison and his wife, joined by their youngest daughter, Aiyanna, left the judge’s chambers and walked down the courthouse steps. A block away, they approached the family’s burgundy Kia minivan, which was now decorated with a $75 parking ticket. The meter had expired.

Harrison’s frustration boiled over. Dream Center had taken his money, he said, because a broken system let the college chain get away with it.

“It’s up to the leaders in our government, it’s up to us as everyday citizens to put an end to this,” said Harrison, whose time in the Army included almost 16 months in Iraq, until a combat injury severed his rotator cuff and tore his labrum. “To have deregulation after deregulation in this industry, it’s preposterous. It opens the door, it invites shady companies to do shady business and for things like that to happen to everyday real people. And until we stand up, this will continue to happen.”

The Harrisons have set up a GoFundMe page to solicit donations. They are still not sure about where they will live. But in the first few minutes following the eviction hearing, Kendrick Harrison knew what needed to be done.

“Now, I’m going home,” he said. “To break the news to my family, to my kids, and let them know that the unspeakable has just happened to our family.”

Joe Buglewicz contributed to this article.

Michael Vasquez is a senior investigative reporter. Follow him on Twitter @MrMikeVasquez, or email him at michael.vasquez@chronicle.com.