Updated at 1:27 p.m. Jan. 10
The Biden administration says it is closely tracking the financial health of a for-profit college in Massachusetts. The decision comes after allegations of fraud against Bay State College, a small college with campuses in Boston and Taunton that is owned by Beijing-based Ambow Education.
“The Department of Education placed Bay State College on heightened cash monitoring, a serious status requiring it to submit any requests for financial aid to the department before it can drawdown funds," a Department of Education spokesperson told GBH News.
In an interview on Tuesday, U.S. Sen. Elizabeth Warren criticized the department for being slow to put the college under federal oversight, given the concerns about its financial health.
According to the department, the federal government can monitor a college’s finances due to, among other things, accreditation issues, late or missing annual financial statements or audits, outstanding liabilities or concern around the school’s administrative capabilities.
“Bay State College clearly meets these criteria,” Warren told GBH News, urging the Biden administration to take additional steps to protect students — and taxpayers.
“We’ve watched this pattern before with these for-profit colleges. They start showing all kinds of warning signs,” Warren said, before ticking off some of Bay State’s problems. “Their enrollment has dropped substantially. They are losing money. They have canceled classes. They haven't paid their rent."
“It’s time to put them under a lot more scrutiny so that students are not left holding the bag,” she said.
Several students previously told GBH News they were misled about the school’s academic programs and charged for courses that didn’t exist, or were canceled suddenly due to staffing shortages. Massachusetts’ attorney general started gathering information about the college last year.
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Last summer, Bay State’s accreditor — the New England Commission on Higher Education — put the college on probation and threatened to rescind its accreditation if its enrollment, staffing and financial conditions worsened.
At the time, the regional accreditor said Bay State may not have the “ability to meet its enrollment goals and to ensure it has sufficient faculty and staff to support its educational programs.”
Then, in December, Bay State faced a string of layoffs and resignations of key staffers, including the interim dean of academics, chief academic officer, director of student affairs, faculty senate president, the chief financial officer and director of communications.
"We welcome any additional oversight," a private public relations agent hired by Bay State wrote in a statement.
In an all-staff email earlier this month, interim president Jeff Mason announced the college was cancelling low-enrollment programs as part of its new “growth pathways” strategy.
The college’s enrollment peaked at roughly 1,200 students more than a decade ago, and Mason previously told GBH News it fell to about 300 last spring. He blamed demographic shifts and the pandemic for such steep declines.
Bay State administrators will appear before its accreditor in a special meeting on Jan. 12 to discuss its accreditation status.
In advance of that meeting, Warren and Rep. Ayanna Pressley sent a letter on Jan. 10to the New England Commission on Higher Education, saying accrediting agencies have acted like "rubber stamps" when it comes to for-profit colleges like Bay State. The lawmakers urged the commission to scrutinize Bay State and take any necessary action against the college, including rescinding its accreditation.
This story was updated to mention the Jan. 10 Warren and Pressley sent to the New England Commission on Higher Education.
