The U.S. Department of Education has terminated federal student aid to Cincinnati, Ohio-based Union Institute & University and fined the school $4.3 million, charging in a 14-page “emergency action” letter sent on November 7 that the non-profit school “misused Title IV funds to the detriment of its students, the department and taxpayers.” The Department alleges that Union took some $43,000 in financial aid to which it was not entitled and failed to provide refunds owed to 157 students, totaling $753,374.

Union, which proclaims that its courses are “100% online,” offers bachelors, masters, and doctoral degrees and certificates in fields including education, health care, leadership, and social justice.

The Department says that Union effectively used $200,000 in federal student loan funds to pay overdue balances owed on the school’s credit cards. The Department also alleges that Union hasn’t paid its employees since August.

Despite the loss of federal aid, which is a central source of the school’s funding, plummeting enrollment, and multiple lawsuits for unpaid rent and salaries, Union says it is staying open. Its website still invites prospective students to “start achieving your goals” with new masters and doctoral program sessions starting in early January.

In fall 2022, the school reported having just 787 students, less than half the enrollment it claimed ten years earlier.  Students told WCPO TV in Cincinnati that they are facing difficulties advancing their graduate educations elsewhere because they can’t access their Union transcripts.

Union’s graduates include Arthur Keiser, the ultra-wealthy operator of Keiser University and other Florida universities that have faced controversies over predatory practices and conflicts of interest. Keiser earned his doctorate in 1998 at Union, with a dissertation entitled “Benchmarking in Private Career Schools: A Preliminary Empirical Investigation in the Establishment of Quantitative Strategic Indicators in this Specialized Postsecondary Education Sector.” At least at the time, the school generally did not require doctoral students to take classes; the main activity for many students was writing a thesis. After the Ohio Board of Regents examined Union’s PhD program in 2002, the school undertook significant reforms.

In August, the Department of Education placed Union on restrictive Heightened Cash Monitoring 2 status, meaning that the Department would not pay out financial aid to the school in advance. The next month, the Department directed Union to provide a $12 million letter of credit in order to remain eligible for federal aid.

Union’s accreditor, Higher Learning Commission, granted Union a ten-year renewal of accreditation in 2017.  But in September, after the Department of Education had imposed the cash monitoring restriction, HLC placed a Financial Distress designation on the school.

The Department told Union Institute it has a November 27 deadline to appeal the fine and termination of federal aid.