Massachusetts' attorney general is launching an investigation into the collapse of Mount Ida College, a small liberal arts college embroiled in controversy following its closing announcement last month, as its counsel admits the college won't be able to make its payroll unless its deal with the University of Massachusetts-Amherst goes through by Wednesday.
Attorney General Maura Healey announced her office will investigate Mount Ida's senior administrators and its board of trustees and whether they violated fiduciary duties as they addressed the college's financial condition and carried out the Newton-based college's educational mission.
"We are extremely disappointed in the way Mount Ida handled this closure," Healey said in a statement.
Attorneys for Mount Ida College told Healey's office the liberal arts college will have to declare bankruptcy in the event its deal with UMass Amherst fall through. The deal was scrutinized by state lawmakers in an oversight hearing last week.
The revelation came to light in a letter from the attorney general's office regarding the asset transfer to UMass and fair value of the transaction, which is required by the state's charities law.
"Your treatment of your own students is particularly upsetting and extremely unfair to them," officials from the attorney general's office wrote in a letter to Mount Ida attorneys about the transaction, which was approved.
The attorney general's Student Loan Assistance Unit has been working with hundreds of families affected by the closure.
Students at Mount Ida expressed shock to NBC10 Boston last month after the announcement.
"[Mount Ida President] Barry Brown had nothing to say to us," one student said after a closed-door meeting for students. "It was just noise. I don't think they have answers for us."
After it was announced that the college was closing, students learned that those in good academic standing can go to UMass Dartmouth, a university about an hour's drive away and does not offer the same majors in certain cases.
However, Tuesday's letter from Healey's office showed that students in these certain majors have been accepted to other schools in the University of Massachusetts system.
UMass Amherst's plans to purchase the campus has also upset students and faculty at UMass Boston, where there has been a student-led walkout and a faculty declaration of no confidence to protest a decision they argue will result in the campus taking more of a backseat as the university faces an expected $30-million budget shortfall.
"Students have been forgotten, students have been taken advantage of, and they have been let down by grown-ups," UMass Boston undergrad student president Katelyn Mitrano said.