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Union Institute students and staff have little confidence as school faces sanctions, investigations

Union Institute & University headquarters in Walnut Hills
Zack Carreon
/
WVXU
Union Institute & University headquarters in Walnut Hills

The Walnut Hills-based Union Insititute & University could be on the brink of closure if it fails to meet the U.S. Department of Education's financial responsibility requirements.

In a letter sent to university President Karen Schuster Webb last month, the Department of Education listed concerns about the school's finances and told Union Institute it must come up with a letter of credit totaling over $12 million or submit cash to be held in escrow by Oct. 13.

When that deadline passed, students and faculty members told WVXU school leaders were initially silent about the university's status with the department. But an email from Union Institute's VP for Academic Affairs Tom Frederick that was shared with WVXU this week claims the school was able to receive an extension on its original deadline.

RELATED: Union Institute cancels fall term as financial issues mount

Had the university missed its deadline it would have lost access to federal aid funds, meaning students would have to pay out of pocket or find private loans to stay enrolled. Schools that have found themselves in a similar situation — like Indiana-based ITT Technical Institute — closed soon after losing federal aid.

Even with the extension, some within the school say it likely won't make a difference because the university's leadership has shown they don't have the ability to raise needed funds or deliver on promises.

"If extensions continue to prolong an inevitable closure, then it just makes a bad situation worse," a Union Institute student told WVXU anonymously.

Union Institute hasn't paid its employees in months and it's unclear if the university has the resources to resume instruction. It also owes its students more than $750,000 in federal loan refunds. Both students and staff say the missed paychecks and missing loan refunds have caused them financial hardship.

RELATED: Faculty call for investigation into management at Union Institute

On top of the sanction from the Department of Education, the Ohio Department of Commerce's Division of Industrial Compliance is in the middle of investigating Union Institute & University. The agency is currently looking into two complaints filed in September by university employees for unpaid wages.

In response to the complaints, the Division of Industrial Compliance has requested wage records for all employees and is awaiting a response from the school.

As students and faculty wait to find out about the future of the university, they say Union Institute leaders claim to have put together a provisional teach-out plan, so students can transfer their credits elsewhere if the school ends up closing. The details of that plan have not been shared with students.

The U.S. Department of Education has not yet shared the new date of Union Institutes' new financial responsibility deadline with WVXU.

Zack Carreon is Education reporter for WVXU, covering local school districts and higher education in the Tri-State area.