CHICAGO �� The lobby of the building that houses Argosy University's Chicago campus was relatively calm Friday, but hints abounded that all was not well.
As students filed in and out of the Michigan Avenue building, scrambling to collect their academic records while they still could, faculty and staff members cleared out their offices, and books that had been removed from the cleaned-out library were being stacked in the hallway, free for anyone to take, according to students' accounts.
Illinois education officials were also on site, trying to help coordinate with other schools to allow Argosy students to continue their studies.
The university ceased operations Friday afternoon, a spokeswoman for the parent company confirmed. All this came just two days after Argosy officials announced that the school and other campuses across the country would close barring a successful last-ditch effort to find a buyer.
The announcement also came as the U.S. Department of Education said the private university chain had improperly withheld millions of dollars in financial aid from students and used it to cover other expenses.
Mark Dottore, a court-appointed receiver overseeing the finances for the school, said: "We are extremely disappointed with this outcome but continue to provide services to students to help them transition to one of the dozens of higher education institutions offering assistance to them or, where they choose to do so, to apply for student loan discharge."
Several students said they were given no warning of the imminent shutdown. One doctoral student, who spoke on the condition of anonymity, said she learned of the news from a TV broadcast.
Former student Tiffany Jones, who received her doctorate in 2017, came downtown Friday to get a copy of her transcript because she wasn't sure how much longer she'd be able to obtain it directly from the school.
She said she had seen reports in a Facebook group about Argosy possibly closing but she was not aware until Thursday that it could affect Chicago.
"Then my dissertation chair called me and texted me and said, 'No, you need to get your transcript (Friday),' " Jones said. "I feel sorry for the staff and the students because it's just a horrible situation to be in."
Argosy's fate appeared to be sealed last week when the U.S. Department of Education announced that it no longer would provide financial aid to the private university because it had not properly administered the money in what the department called "a grievous breach" of the university's responsibility.
The department said the university didn't pay federal financial aid credit balances to students as required by law and that, after receiving $13 million in federal aid in January, Argosy instead used that money to cover payroll and other expenses.
The federal department called that "a severe breach of the required fiduciary standard of conduct" that "demonstrates a blatant disregard for the needs of its students."
In the same Feb. 27 letter, the Department of Education notified parent company Dream Center Education Holdings that its request to convert Argosy from a for-profit to a nonprofit university was rejected and that it was ceasing Argosy's participation in Title IV federal student aid programs.
The Department of Education "took this step because Argosy does not meet certain standards, including administrative capability, financial responsibility, and the institution's duty to use federal student aid program funds only for their intended purpose," the department wrote in a notice posted to the federal student aid website.
Earlier this week, the court-appointed receiver sought an emergency closing of 22 Argosy campuses around the country, according to Ohio federal court documents and the Education Department.
The receiver, Dottore, identified potential buyers for a few locations, according to court documents filed Thursday. But there was no indication that anyone had offered to purchase Argosy in Chicago.
The Illinois Board of Higher Education had been conducting its own investigation into the schools since January.
In multiple campus visits, state higher education representatives also fielded concerns about students not receiving federal financial aid they were owed. Officials also determined that several admissions personnel had been laid off.
Argosy and its affiliated schools long have been mired in financial and regulatory trouble. The schools and their various owners have been lambasted by numerous legislators who have accused the institutions of financial mismanagement and predatory loan practices.
A nonprofit based in Pittsburgh, Dream Center bought the schools under the Art Institute (distinct from the School of the Art Institute of Chicago), Argosy University and South University names in 2017, intending to transfer them from for-profit to not-for-profit status.
The schools had a troubled history under its previous owner, Education Management Corp.
In 2011, Illinois Attorney General Lisa Madigan joined other states in suing the company after following a whistleblower lawsuit alleged consumer fraud. The company agreed to pay a $95.5 million settlement in 2015.
The swift shutdown of Argosy comes just a few months after Dream Center closed down 18 art schools, including two in Illinois. In July, Dream Center announced that it would close the Art Institute schools, just a few days after the schools' previous owner filed for bankruptcy and listed nearly all the affected schools as debtors in the case.
