CINCINNATI — Four months after financial problems first surfaced at Union Institute & University in Walnut Hills, current and former employees are raising new concerns about missed paychecks, unpaid insurance premiums and improper use of student loan disbursements.
The new problems surfaced as Union Institute faculty members voted 94% in favor of a resolution calling for the resignation of President Karen Schuster Webb and Chairman Edgar Smith.
WCPO obtained an internal email sent among faculty members on July 19 prior to the no confidence vote.
“Union’s financial problems are not lost on me, yet we cannot allow these problems to serve as a justification for our exploitation,” wrote a part-time faculty member. “Union’s financial problems are ultimately a leadership problem.” WCPO is withholding the identity of the sender of the email due to concerns for his job.
The email alleges part-time faculty members were not paid in mid-July, while the school used student loan proceeds to cover paychecks for full-time faculty.
“We are the backbone of this institution. Union relies on our labor to do the vast majority of the work it performs in the service of educating its students. And yet, our contract is so weak, the university believes it's okay to deem full-time faculty more worthy of timely pay,” the email reads.
Union Institute officials did not respond to multiple attempts to reach them. Chief Financial Officer Sandra Mills has left the school, according to several employees who asked not to be named. Mills and Webb both declined to comment through their attorneys.
“I just am very afraid of seeing all my hard work go up in smoke,” said Marena Bridges, a Wisconsin student who has been working remotely on a doctoral degree at Union since 2016. “I don’t know if this is a situation where my credits can transfer over. Are those credits even worth anything if the university fails? You know, I have no idea.”
Bridges said she was owed nearly $20,000 for a student loan refund on July 7, but the money has yet to be paid. After weeks of questions, Bridges said a school official told her Union was waiting for a grant check to complete her refund request. But previous refunds were issued without that step.
“It seems suspicious that when there are these allegations of diverting funds, they are having these issues with my grant,” Bridges said. “Those funds were not disbursed to me. Instead, they were used for something else within the university to kind of mitigate their cash-flow problems.”
When the I-Team first reported on Union Institute’s cash-flow problems in March, Webb told employees they were caused by unpaid tuition and delays in federal funding. In April, a Phoenix company announced it would loan $1 million to Union, in exchange for a percentage of a $3 million payment it was expecting from the IRS.
But payroll problems continued in June and July, according to internal emails circulated among school employees. In one of those emails, an employee asked Webb whether health insurance premiums were being paid. Her response was not conclusive.
“In the past, if necessary, Union received payment extensions,” Webb wrote. “Union has not received any notices of cancellation.”
In May, a Miami, Fla. -based lender sued Union for breach of contract, claiming it’s owed $410,625 from a January agreement to purchase the school’s future accounts receivable. Union has yet to respond to the complaint. A second lawsuit from another Florida lender was filed in April and dismissed May 5.
Union also faces a proposed class action lawsuit in which employees are seeking damages of up to three times minimum wage for employees who missed paychecks after Feb. 24. The school denies the lawsuit’s allegations that its actions violated Ohio law and the federal Fair Labor Standards Act.
“It has been both the policy and practice of Union to pay all of its employees all of the wages they are owed for all of the time that they work, in accordance with all applicable laws and regulations,” said Union’s response to the April 11 lawsuit. “All employees have been paid their wages for the short time period in question, although tardy. Union does not expect or require and has never expected or required any of its employees to perform any work without being paid for their time performing such work.”
For students like Bridges, the money trouble is compounded by a lack of information from the school. Bridges said she didn't know Union was facing a cash crunch until she started asking questions about why her student loan refund was late in mid-July.
“It made me feel like all of my hard work is now being devalued. And we’re looking like, you know, it’s just another online diploma mill,” Bridges said.
