To date, AveWatch has reported on AMCA Nicaragua twice:

1) the alleged funneling of money through Fr. Fessio's private bank account ($240,000 USD) to pay for the Nicaraguan campus' chapel (see here)

2) AMU's plan to acquire the Nicaraguan campus in an effort to beef-up its offerings before a second attempt at regional accreditation through SACS (see here; first attempt in 2003 mentioned here)

The purpose of this AveWatch post is to revisit the later report - the acquisition of the Nicaraguan campus by Monaghan's Ave Maria University (Florida) from Monaghan's Ave Maria College (Michigan).

According to Naples News (March 20, 2006), "In February [2006] students at Ave Maria College of the Americas in San Marco, Nicaragua, exploded in applause when the school's president, Humberto Belli, announced the good news. Soon, Belli told students, they would be attending Ave Maria University..."

"Soon" slipped by, one month after the next. In April 2006, Belli and AMU President Nick Healy released a memo praising the merger, stating that AMU would not submit its application for SACS accreditation until the Department of Education approved the merger. The AMCA campus was told in May 2006 that the merger would occur by August 2006. In August, they were told that 60 days would finalize things. Then another 60 days passed. To this day, there is a lack of widespread definitive understanding on the status of the merger.

This much is clear to AveWatch:
The Nicaraguan campus has the following official entry with the Department of Education for the 2006-2007 and 2007-2008 academic years (www.fafsa.ed.gov; emphasis added):

AVE MARIA UNIVERSITY - LATIN AMERIC
DE TEXACO 2C, SUR
SAN MARCO, CARAZO
Federal School Code: E01029

Also, AMU Vice President John (Jack) Sites stated last month that "Ave Maria University was designated as the 'pass through institution' for financial aid for AMCA.. as of December 15, 2006." Implied is that AMU must have had DOE approval to merge with AMCA in order for AMU to be named as "pass through". Finally, according to a recent Naples News article (April 21, 2007), AMU President Healy said that "he hopes to reapply with SACS in May." (Recall Healy's earlier statement that a SACS application would not be sent until the AMU-AMCA merger was final). So, AveWatch concludes that AMU and AMCA are now merged; as such, AveWatch will hereafter refer to Nicaragua's AMCA as "Ave Maria University - Latin American Campus" (AMULAC).

But where are the grand press releases and glowing Naples News interviews about the merger? Only one small article in a Nicaraguan newspaper mentioned the merger, stating that students could now "enjoy the financing privileges that the US federal government grants" (translated; El Nuevo Diario, January 19, 2007). Why all the hush-hush for a merger that, this time last year, was so prominent? If Tom Monaghan is adept at anything, it is touting his wares.

Maybe Healy's plan to secure SACS regional accreditation by beefing-up AMU's academic offerings with a Nicaraguan merger is backfiring. The Nicaraguan campus could be a cash cow, but it has potentially big problems. For starters, the AMULAC curriculum needs a complete overhaul to put it in sync with AMU and SACS. Despite Healy's claim to be getting-out a SACS application within a few weeks (May), AMULAC faculty still do not even know:
(a) who among them will be hired back for Fall,
(b) what majors will be on the books,
(c) who their new Dean of Academics will be (start date June 1, 2007), and
(d) who, if any, will fill five vacant full-time faculty positions (Business Administration, Mathematics, English, Philosophy, and History).

Other problems run deeper. At least some AMULAC students are very upset about their financial aid. This is not an insignificant cohort, as approximately 30% of AMULAC's 400 students receive financial aid.

Nicaraguan students must complete their financial aid application by March 31 (for existing students), or at least three months prior to the start of the academic year (for new students), for the year they wish to receive aid (AMCA Catalog, 2006-2007).

How is it, then, that students have waited over one year to receive their aid, remembering that financial support is based on need. That is, students need the money because, right now, they cannot afford expenses, housing, and books. At least one student says that his/her Pell Grant money still has not arrived as of April 2007 for the almost-complete 2006/2007 academic year.

It is highly unusual that students should be waiting so long for their aid. For federal Stafford loans and Pell Grants, the government is supposed to release the money at the beginning of each semester to go directly to the school (i.e. Pell Grants to AMU) or else to a lending institution (i.e. to Sallie Mae or US Education Finance Corp on subsidized loans). But, students should never have to wait. Even in cases where the government is concerned about how money is being handled by an institution - as with the DOE's "heightened cash monitoring" status at Ave Maria College Michigan - the feds still want students to get their money. In that case, the DOE can put institutions on "reimbursement" where the institution itself pays aid from its own pocket, then the government reimburses the institution. In Michigan, the DOE prohibited Monaghan's Ave Maria College from withholding aid from students. At that time, the College was Nicaragua's "pass through" to obtain federal aid. Is Ave Maria again in need of a reminder to not hold funds?

The time of disbursement is important for a number of reasons. To begin with, once the funds have been disbursed, a student falls under the rights and responsibilities of a loan recipient (i.e. interest begins accruing on the loan if it is unsubsidized, and the student has the right to cancel the loan). In addition, knowing when a disbursement occurs allows a school to determine when it must comply with regulatory requirements related to disbursements and other cash management issues. For example, whenever a school credits a student's account, and those funds exceed the student's allowable charges, a credit balance occurs. A school must then pay the excess funds directly within 14 days. Finally, federal regulations require that an institution track performance of student aid recipients to ensure that a GPA of 2.0 or higher is maintained. How can interest, rights to cancel, credit, and grades be tracked when aid is disbursed at the end of the academic year?

At least one Nicaraguan student filed a formal complaint with the Florida Department of Education concerning AMULAC's financial aid management . On March 27, 2007, AMU VP John Sites responded by stating (excerpted quotes):

"At the time of the alleged difficulties [Fall 2006], Ave Maria College of the Americas was a branch campus of Ave Maria College in Ypsilanti, Michigan and had no formal or legal relationship to Ave Maria University in Naples, Florida."
"Since these allegations took place prior to that date [December 15, 2006 when AMU became responsible for AMCA's financial aid processing], Ave Maria University is without any firsthand information with which to address this issue."

But, consider the following:
+ For months, Monaghan assigned Sites to work full-time as top-dog at AMC Michigan to oversee the Ypsilanti campus' gutting for AMU Florida. At the time Sites was at AMC, AMC was Nicaragua's "pass through" school; thus, Sites had signficant knowledge of both campuses.
+ AMU Florida was very much involved in financial aid at both the Michigan College and Nicaraguan institutions. From Florida, AMU completely managed financial aid for these campuses from July 2003 to January 2004. That aid management ended when the federal Department of Education required Michigan/Nicaragua to fire AMU Florida for having an illegal contract.
+ AMC and AMU shared at least one financial aid employee for a time, Bob Hickey.
+ AMU ultimately acquired the Nicaraguan campus from AMC Michigan. As such, all Nicaraguan financial aid records held at AMC would have been passed to Sites' AMU.

It is unconscionable that the Florida DOE accepted such a weak excuse from AMU's Sites in addressing this student concern.

Sites goes on to tell the Florida DOE, "On behalf of the University and the personnel of Ave Maria College and Ave Maria College of the Americas, I thank you for bringing this matter to the University's attention." How does Sites, as AMU VP, have the authority to speak on behalf of the College when, earlier in the same memo, he stated that the College "had no formal or legal relationship to Ave Maria University in Naples Florida"?

Finally, AMULAC's relationship to Miami-based financial aid lender Henry Howard (US Education Finance Corp.) is in question. AveWatch already reported on accusations that Howard vigorously enforced his status as the "preferred lender" for all institutions in the Ave Maria empire (College, University, Law School, and Nicaragua) (see 1, 2). AMULAC students report that US Education Finance processed their loans over at least the past three years. Says one student, "They [AMULAC] told me this is the bank where I was going to receive my loans." Some claim that a portfolio of potential providers was not offered. Howard and AMU President Nick Healy have been interested in putting the Nicaraguan campus under their own authority since 1999.

The Nicaraguan campus is now part of Ave Maria University, per Tom Monaghan's desire and the approval of his many Board members. It is incumbent upon accreditors like the American Academy of Liberal Arts (AALE) and the Southern Association of Colleges and Schools (SACS) to fully evaluate this Latin American campus and its doings. The American Bar Association (ABA), who must acquiesce for Monaghan to move Ave Maria School of Law from Michigan to AMU Florida, should also become acquainted with the Law School's new sister campus, Nicaragua's AMULAC.

Tags: accountability