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Closed school saw drop in federal student aid

Erika Niedowski, Associated Press

PROVIDENCE, R.I. (AP) -- The amount of federal student aid received by a Rhode Island-based for-profit career training school dropped sharply — and its enrollment fell as well — before it abruptly closed its doors last week, according to the U.S. Department of Education.

Sara Gant, a spokeswoman for the department, said the Sawyer School got $2.3 million for the 2012-2013 year compared to about $7.4 million in 2011-2012. She said the drop in aid mirrored the enrollment decline but she did not have exact figures.

Classes at Sawyer were to resume last week but students were told with just two days' notice that the school had closed. About 300 students in Rhode Island and 1,200 students in Connecticut were displaced. Some of the Connecticut students attended Butler Business School, which is owned by the same parent company, Academic Enterprises Inc.

Butler also saw a steep drop in federal student aid, from about $2.2 million to $716,000, according to the U.S. Department of Education.

Sawyer's overall budget wasn't immediately available. Michael Kelly, an executive at Academic Enterprises, has said he is not speaking to the media.

The Sawyer and Butler campuses offered medical assistant, office information and business training programs. Some students were just weeks away from obtaining their certificates when the schools shut down.

Anthony Bieda, a spokesman for the Accrediting Council for Independent Colleges and Schools, said there were no warning signs that Sawyer was in trouble, although a recent change in federal financial aid policies could have contributed to the schools' sudden closure.

As of July 1, newly enrolled students were required to have a high school diploma or GED to receive federal financial aid. That could have thrown the business into a "financial problem we would not necessarily have detected," he said.

The accrediting council, which reviews schools' enrollment figures and audited financial statements annually, had not received the financial statements for 2012 because they were not due until the end of the year — the same time the school closed, Bieda said. The council pulled Sawyer's accreditation as a result of the shutdown.

Bieda said the Sawyer schools and Butler Business School were last reviewed for accreditation in early 2011. The Sawyer campuses each received a three-year accreditation, while Butler was accredited for six years.

Bieda said the council is trying to determine whether it should make changes to its review process.

Rhode Island completed its most recent annual review of Sawyer in September; officials with the Office of Higher Education have said there were no red flags about its finances. The office and state police began accessing student records held at Sawyer — made available voluntarily — on Friday evening and are continuing to sift through them. Mike Trainor, an OHE spokesman, said an official with U.S. Department of Education's inspector general's office was also on hand. A spokeswoman for that office, Catherine Grant, had no comment.

State police told The Associated Press last week they are reviewing Sawyer's records before determining whether to open a criminal investigation. The Providence Journal reported Tuesday that the FBI has joined state police in their inquiry. The U.S. Attorney's office is also involved.

State education officials are hoping to begin distribution of the records this week to students seeking to transfer to other schools or get work.