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A black and white picture of University of the Arts overlaid with the phrase "...failing to provide students with critical information."

In an unprecedented move, Middle States stepped in to help compensate for an institution's failures.

Photo illustration by Justin Morrison/Inside Higher Ed | ajay suresh/Wikimedia Commons

When University of the Arts closed abruptly on June 7, it left students and employees in limbo. Officials had announced the shutdown just a week earlier, after The Philadelphia Inquirer broke the news. Students who hoped their questions would be addressed at a town hall scheduled for June 3 were bitterly disappointed when administrators inexplicably canceled the event just minutes before it was set to start.

On Friday, the community finally got some answers—not from UArts but from its accreditor, The Middle States Commission on Higher Education (MSCHE), which held an online information session Friday for students.

The unusual move—a first for MSCHE and perhaps for any institutional accreditor—aimed to fill the void left when UArts officials walked away and handed over closure responsibilities to a management firm, which is winding down the university’s operations.

What the session made clear is that the cause of the sudden closure remains a mystery to many involved, including MSCHE, the Pennsylvania Department of Education, the U.S. Department of Education and apparently even the management firm carrying out the closure.

A Mysterious Financial Crisis

Like many small private institutions, University of the Arts had financial challenges. Its enrollment had slipped from more than 2,000 students in the early 2010s to 1,207 last fall, financial documents show. UArts also operated at a $6 million loss in fiscal year 2023.

But the sudden collapse of the university was as precipitous as it was unexpected.

To date, the reasons have not been fully revealed. The closest thing officials offered to an explanation in the May 31 closure announcement was that the university was hit with “significant, unanticipated expenses,” writing that “the situation came to light very suddenly.”

UArts President Kerry Walk resigned mere days after the announcement.

Many of the questions at the webinar came from students and parents unsure how to navigate their next steps. But several speakers wanted clear answers on the rationale for the closure.

In response to one student, MSCHE President Heather Perfetti said UArts officials first contacted the accreditor on May 28th or 29th with the news that they expected “imminent closure.” But she said they didn’t explain the specific financial reasons for that.

“I can simply say on behalf of our commission, we were not aware of whatever the issue is, or was at that time, and we remain unaware of what the issue is or was at this time,” Perfetti said.

Lynette Kuhn, Division Chief of Higher Education, Access, and Equity at the Pennsylvania Department of Education, said state officials “were also made aware of the abrupt closure and imminent situation on May 29.” The Pennsylvania Department of Education has not received an answer yet on how long UArts “was aware of this financial crisis and what led to the abrupt closure,” she said.

A U.S. Department of Education official added that their department was similarly unaware of the cause.

Jenelle Beavers, a representative from Alvarez & Marsal, the consulting firm tasked with carrying out closure duties, also seemed unaware of the specifics. She noted the firm was retained on June 7 after MSCHE stripped UArts of its accreditation and administrators announced the closure.

The Pennsylvania Department of Education is now investigating the closure.

“I do want to let everybody know that the agency is looking into the situation that occurred with the University of the Arts and is taking this seriously to get to the bottom of what had occurred and how the events have unfolded,” Kuhn said in the webinar. “And at the conclusion of those investigations, I believe each agency will have more answers in regards to the timeline of events.”

Outside Authorities Step In

The fact that MSCHE and others—rather than University of the Arts officials—fielded questions from students on Friday underscores the unusual retreat by administrators amid the sudden closure.

In an emailed statement to Inside Higher Ed, an MSCHE spokesperson said the webinar was “the first of its kind for the Commission, and as far as we are aware, it is an unprecedented event for institutional accreditors.” The need for the session was apparent after UArts canceled its town hall, the spokesperson said, adding that the university “was failing to provide students with critical information” needed in the moment to complete their education.

The Alvarez & Marsal consulting firm will also lead information sessions in the coming days, though Beavers did not respond to an Inside Higher Ed inquiry seeking details on those sessions.

Barbara Brittingham, former president of the New England Commission of Higher Education, told Inside Higher Ed, “the accreditor-run information session is, as far as I know, a first.” She credited MSCHE for leading it, noting that “when institutions close, particularly suddenly, the community and particularly the students need multiple opportunities to talk and ask questions.”

Paul Gaston III, an emeritus professor at Kent State University who frequently writes about accreditation, said by email that “the situation seems anomalous in many ways” but “MSCHE’s webinar strikes me as a reasonable response under the circumstances.”

In UArts’s waning days, administrators clashed with MSCHE, especially after the organization stripped its accreditation on May 31. MSCHE noted that the “imminent closure” violated its standards given “the institution failed to inform the Commission of closure in a timely manner or to properly plan for closure with prior approval through substantive change.” That announcement, made public, seemed to prompt local news coverage before UArts released its own statement.

In the initial closure announcement, UArts blamed MSCHE for breaking the news.

“Today is a heartbreaking day. University of the Arts will close as of Friday June 7, 2024. We would have shared this news with you directly, but the Middle States Commission on Higher Education elected to withdraw UArts’ accreditation and announce before we could communicate with you. We know that this makes hearing the news of UArts’ abrupt closure even worse,” wrote Judson Aaron, chair of the UArts Board of Trustees, and then-president Walk.

The swipe at MSCHE was later removed from the closure statement currently online. In addition, the accrediting body released a statement disputing the notion that it hastened the closure of UArts.

The abrupt end for University of the Arts was followed by other closures in the state. For-profit Triangle Tech announced on June 5 it plans to close six campuses across the state. Pittsburgh Technical College, a nonprofit, two-year institution, announced on June 10 that it will close in August. And in January, Pennsylvania Academy of Fine Arts announced plans to end degree programs.

But it’s the sudden implosion of UArts that has garnered the most attention from lawmakers.

On Monday, Democratic representative Ben Waxman will host a policy hearing with the House Democratic Policy Committee and members of the Philadelphia House Delegation on the abrupt shutdown of UArts. Waxman and fellow Democrat representative Bob Merski, announced Thursday that they plan to introduce legislation to help avert sudden college closures.

The legislation would call for colleges receiving funds from the state or federal government to provide financial information annually. Though the lawmakers’ statement did not specify what financial information they would ask universities to provide, they argued such legislation would boost transparency for students, employees and taxpayers. They added it would allow the legislature to intervene to prevent other closures or at least to ensure a more orderly process if such a move became necessary.

“When I heard about UArts’ closure, I immediately shared feelings of anger and disappointment with the students who won’t have the same school to attend and faculty who will be losing their jobs,” Waxman said in the news release. “I want to ensure no student or school faculty member in Pennsylvania has to go through what those at UArts are going through right now. By requiring these schools to regularly notify us of their financial information, we can create greater accountability and transparency across the board.”

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