SEVEN HILLS, Ohio — Chancellor University, one of Northeast Ohio’s oldest colleges, has closed, school officials announced today without citing a reason.
The school will transfer its several hundred students to Alliant International University, a California-based, private, not-for-profit school with undergraduate and graduate programs, after its summer session ends on Aug. 25, according to a news release.
"Everyone at Chancellor is committed to making sure our students make a smooth transition to Alliant," said Chancellor President Bob Daugherty in the release. "We are working to ensure each student’s individual needs are met and that all credits transfer in a seamless transition."
The closing follows a prolonged period of accreditation and financial problems, including $162,000 owed to the taxpayer-subsidized Cleveland-Cuyahoga County Port Authority.
At its request, the school planned to end its affiliation with the Higher Learning Commission of the North Central Association in October. Accreditation is required for students to receive federal financial aid.
The commission in 2012 raised concerns regarding financial self-sufficiency, enrollment, strategic planning and student retention.
Chancellor, which is based in Seven Hills, had 31 full-time and 162 part-time undergraduate students and 50 full- and part-time graduate students in May, according to the commission.
The university began as Folsom’s Business College in 1848, according to the Encyclopedia of Cleveland History. Among its graduates were John D. Rockefeller Sr. and Harvey Firestone.
After several mergers, it became Dyke College in 1958, and moved to a building on East Sixth Street in Cleveland.
In 1985, Dyke College moved to a location on Prospect Avenue. The school launched an $8 million campaign in 1994 to renovate the Prospect Avenue building and opened suburban campuses and had more than 1,500 students.
It became David N. Myers University in the summer of 2001 to reflect expanded offerings including an MBA program and a distance learning department. But the school became mired in financial problems and closed in December 2007.
Entrepreneur Michael Clifford bought Myers out of bankruptcy for $5.25 million in the summer of 2008. Working with a team of investors, he transformed the school into Chancellor University, a for-profit offering most courses online.
Jack Welch, former chairman and CEO of General Electric Co., was recruited to head the school’s MBA program. He invested more than $2 million for a 12 percent stake in the school.
In December 2011, Welch announced he would move his online leadership education program that offers an executive MBA degree to Strayer Education Inc. The Wall Street Journal reported that Welch said Chancellor wasn’t the right academic home. Welch paid Chancellor up to $2 million to buy back his institute.
Chancellor moved late that year from its longtime building on Chester Avenue in Cleveland to Seven Hills after a lease expired. The Port Authority had acquired the building to settle a debt that dates back to 2004, when the port issued $5.725 million in bonds so Myers University could buy and renovate the structure.
The port authority took a $2.1 million loss in 2008, when Myers went into receivership and was acquired by the company that established Chancellor University. The loss is a first for the authority, which has issued nearly $2 billion in bonds, said chief financial officer Brent Leslie.
Chancellor gave the port authority $500,000 in c ash and the building in 2010 as partial payment on its debt. Leslie said the university still owes it $162,000.
After Chancellor vacated the building, the port authority leased the facility t oa c harter school and recently agreed to sell it for $2 million to Charter Stone Capital, he said.