Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

'Dimmed' Hopes for Money Owed to Art Students

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

'Dimmed' Hopes for Money Owed to Art Students

Article excerpt

Millions of dollars in federal financial aid remain out of reach for students at the Art Institute of Pittsburgh and other schools, according to a filing Tuesday by a federal receiver controlling several financially struggling schools formerly owned by Pittsburgh-based Education Management Corp.

More than $13 million owed to students to pay for rent, school supplies and groceries will be frozen for the foreseeable future, according to Mark Dottore, a Cleveland-based federal receiver who took control of the schools in mid-January.

"Hopes for a breakthrough have dimmed," Mr. Dottore wrote to the judge overseeing the receivership case. Federal receivership is akin to the bankruptcy process, protecting the debt-laden schools from creditors as negotiations continue with potential buyers.

Earlier this month, Mr. Dottore wrote to the U.S. Department of Education asking for more money so he can pay $13 million owed to students at Argosy University, one of the former EDMC college chains. It is unclear how much total money is owed to Art Institute students.

The receiver has been trying to sort through complicated documents and financial statements to determine where all the funds are that Dream Center Education Holdings - the California-based nonprofit that purchased schools from EDMC in 2017 - was expected to have ended up with.

In the letter to the Department of Education, he described several problems with moves made by Dream Center that rendered the money owed to students difficult to track down. Among them, a service provider was holding on to fees for services that it was not able to provide.

That hunt continues, according to Tuesday's filing.

Mr. Dottore added, "The receiver is still attempting to secure a workaround under which the funds will immediately be released from the [Department of Education] and to the students with the hope that easing the financial burden will allow them to return to their studies and focus on completing their degrees. …

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