Union Institute & University's accreditor, Higher Learning Commission, has placed the Walnut Hills-based school on "Administrative Probation."
The accreditor says the university is out of compliance with its obligations for accreditation because it's failed to participate in the commission's evaluations and hasn't submitted timely payments for membership dues and fees. Union Institute is required to remedy this before June 24.
The university remains accredited for now but must provide evidence it has addressed the issues before the June deadline. If it can't, the accreditor may remove the school's accreditation status.
On top of damaging a university's reputation, loss of accreditation means the school will no longer have access to federal financial aid and every student would need to pay out of pocket or find a private loan to stay enrolled. Students who attend or receive a diploma from an unaccredited institution can run into issues with employers, licensing boards, or other colleges if they wish to transfer.
Schools that have received similar sanctions — like the Indiana-based ITT Technical Institute — typically close soon after losing accreditation.
RELATED: 'Egregious failure': Union Institute loses federal aid, fined millions for misuse of funds
The loss of accreditation may only be a formality for Union Institute. Students and faculty previously told WVXU many employees left the school months ago after it failed to give them their paychecks. Many students have transferred to other schools, and the college hasn't held classes since it canceled its fall term last September.
With few employees around, some recent graduates say they've had difficulty reaching anyone at the university to receive their transcripts, which has complicated job searches and the ability to receive promotions.
Several employees have opened lawsuits against Union Institute since last year.
One such lawsuit filed by six former employees against UI&U over unpaid wages was settled in March. Union Institute agreed to pay the employees a total of $22,000 to be split between the six of them. Union also agreed to pay $55,000 to be divided by all eligible former employees who opt in to the payment.
The attorney representing the employees in the lawsuit says what Union was ordered to pay doesn't come close to covering the lost wages, but was only what the school could come up with.
RELATED: Union Institute & University employees reach settlement over unpaid wages
Pointing fingers at the president
Union Institute now faces another federal lawsuit, this time from several other employees. The lawsuit claims the university's president, Karen Schuster Webb, misled employees about their paychecks and benefits, and willfully refused to pay them while the school was in a financial crisis.
The plaintiffs in the case claim they didn't seek new employment opportunities during this period of financial crisis because university leadership informed them they would be paid and have their contracts honored. Plaintiffs say leadership didn't follow through on that promise.
The lawsuit also alleges the university's Board of Trustees knew Webb was providing employees with inaccurate information and did nothing to stop it.
Since Union Institute employees first became aware of the severity of the university's financial woes in early 2023, many of them have pointed to Webb as the cause.
In court documents, employees say when Webb was hired in 2018, the university posted a $6.3 million budget surplus and a $3 million endowment. After Webb's first year, the university posted a $1.7 million loss that only continued to balloon over the years, despite an influx of millions in federal grants the school received during the COVID-19 pandemic.
Employees involved in the lawsuit are seeking missed wages and damages. The civil case is still ongoing.
