Dream Center Receiver Says DeVos-Blessed Studio Enterprise Is Taking Money for Nothing – Republic Report
The court-appointed receiver now overseeing the operations of distressed Dream Center Education Holdings (DCEH) has written to the Betsy DeVos Department of Education that Studio Enterprise, a company designated to service former and current DCEH schools, is taking service fees from the deal without providing any services, draining badly-needed cash from the operation. That troubling arrangement seems to be part of a worrisome disappearing act involving millions in taxpayer-funded student aid, as the meltdown of this entire operation intensifies.
Mark Dottore, the receiver, wrote to Acting Under Secretary of Education Diane Auer Jones on Thursday, with an accounting of the $51 million in taxpayer dollars the DeVos Department had provided in January and early February to Argosy University, South University, and the Art Institutes, the three chains that DCEH purchased from Education Management Corp. a year ago. (The letter was attached to a federal court filing today on behalf of DCEH students by their lawyers from the National Student Legal Defense Network.)
Dottore told Jones that the DCEH receivership faces a “dire cash situation” made worse because of the plan to have Los Angeles-based Studio Enterprise manage the schools. “Studio was not equipped to provide any services to the Universities,” Dottore wrote, “so Studio had agreements with DCEH to continue to provide all of the operational services….” Yet, under the deal, Studio is receiving substantial fees, a fact that Dottore declares “hard to understand.” In addition, Dottore wrote, he understands that the schools paid Studio in advance, and Studio “was required to send the money on to DCEH, and “it appears that over $6 million is due to DCEH from Studio for services to support the Universities; this money may never be paid short of legal action.”