Congresswoman Katie Porter (D-Irvine), who is on leave as a law professor at UC Irvine, where she founded the Consumer Protection Unit, is using her expertise to intervene on behalf of struggling students caught up in the mess involving Dream Center Education Holdings, Argosy University and Western State College of Law.
Porter, who holds her second official town hall with constituents Tuesday night in Mission Viejo, outright accuses Dream Center Education Holdings and the Argosy system that includes the Western State campus in Irvine, of engaging in fraud.
“It’s unacceptable that Argosy University and Dream Center Education Holdings defrauded students in the 45th District and across the country,” Porter says in a statement. “Argosy students have still not received the financial aid they expected at the beginning of January, and $9 million of taxpayer-funded student aid has gone missing. My heart sank when I heard that some Argosy students have found themselves unable to pay rent or buy groceries.”
Through its Education Holdings subsidiary, Los Angeles-based Dream Center, a faith-based nonprofit co-founded by father and son Pentecostal pastors, partnered with a private equity firm in 2017 to purchase for-profit universities from the Education Management Corp.
The sale–which included the Pittsburgh, PA-based Art Institutes, Savannah, GA-based South University and Santa Ana, CA-based Argosy University systems–came at a time Education Management Corp. had recently been reeling from government investigations, whistleblower lawsuits, employee lawsuits and a shareholder lawsuit.
Dream Center Education Holdings revealed that it would change its newly acquired for-profit universities to nonprofits, which raised questions over whether the move was intended to avoid government regulations and if the parent company could even afford to run the institutions, which included the Argosy-acquired Western State College of Law in Irvine.
Established in 1966 in Fullerton, where by 1990 Western State was the largest law school in California, it remains Orange County’s oldest existing law school. There was a time when just about every judge or attorney a reporter brushed up against in the county had passed through Western State, whose notable alumni include federal Judge Roger T. Benitez, San Francisco District Attorney George Gascón, longtime Fullerton area state legislator Ross Johnson, former USC star running back and athletic director Mike Garrett and Bonnie Dumanis, who was the first female and first Jewish district attorney in San Diego County as well as the first openly gay or lesbian DA in the country. The Western State campus moved to Irvine in January 2016.
Dream Center, which claims Western State and the university systems it acquired have not produced the income Education Management Corp. stated they would during negotiations, has struggled to keep the institutions afloat, as predicted. Last month, a federal court appointed a receiver for the campuses, and Argosy was smacked with another double whammy: the Western Association of Schools and Colleges accrediting agency gave a one-year deadline to “show cause” for why it should keep accreditation and the U.S. Department of Education placed restrictions on Argosy’s ability to receive financial aid.
Students at Western State and other Argosy University campuses across the country say they have not received financial aid funds they were expecting in early January, and there have been horror stories about then maxing out credit cards, skipping rent payments and making Sophie choices between food and daycare. The law school faculty recently issued a statement supporting the students’ quest to get their promised funds.
Porter, a freshman Democratic congresswoman, places blame on the Republican president, whose namesake, for-profit Trump University was also mired in controversy. The Trump Organization reportedly settled three class-action lawsuits for $25 million shortly after Donald Trump was elected president.
“Predatory actors like Argosy have been given free rein by the Trump Administration and Education Secretary Betsy DeVos to make a quick buck at students’ and taxpayers’ expenses,” Porter charges. “The Department of Education has taken aggressive steps to deregulate for-profit universities, encouraged institutions to lie about their accreditation statuses, and left students vulnerable to fraudulent groups.
“My office has been monitoring the situation at Western State College of Law and will focus all immediate efforts on helping affected students. In the coming weeks, I will aggressively pursue answers from Argosy, Dream Center, and the Department of Education. These parties must be held responsible for failing the students who relied on their empty promises.”
Porter ends with a promise of her own.
“If the Trump Administration and Secretary DeVos will not bring accountability to these con artists, I will.”
OC Weekly Editor-in-Chief Matt Coker has been engaging, enraging and entertaining readers of newspapers, magazines and websites for decades. He spent the first 13 years of his career in journalism at daily newspapers before “graduating” to OC Weekly in 1995 as the alternative newsweekly’s first calendar editor.