A computer coding school associated with Apple co-founder Steve Wozniak is in trouble with regulators and could close in Arizona.

The state board that oversees private colleges unanimously voted against renewing the license for Woz U, a college with in-person and online programs in Arizona that launched in 2017.

At the Arizona State Board for Private Postsecondary Education’s April 25 meeting, members peppered Woz U representatives with questions about its affiliations with a man who was involved with two other private colleges that recently closed.

Board members questioned the school’s financial status and its failure to seek the board’s permission to change its ownership, a requirement under Arizona law.

All told, the board had a litany of problems with Woz U and cited several Arizona laws and regulations that didn’t allow the board to renew the school’s license.

Woz U has until June 11 to ask for a formal administrative hearing to dispute the denial and address issues brought up by the board. If they don’t file an appeal, the school must stop operating that day.

As of November 2018, the school reported it had 50 students in Arizona.

In a statement released May 13, Woz U said it plans to appeal the board's decision to deny the license renewal, but also asserts that the school doesn't need a license to operate in Arizona.

"While our unique and transforming Education-as-a-Service (EaaS) business model does not rely on having an Arizona postsecondary license, we do not agree with the reasons the Board cited in their decision not to renew," Woz U's statement said.

Ties to Argosy, Art Institute failures

Most of the board’s trepidation with Woz U stemmed from two major private college closures in the past six months.

Argosy University abruptly closed in March after students did not receive financial aid stipends and the U.S. Department of Education said it wouldn’t allow the schools to continue participating in federal financial aid programs.

In December, the Art Institute of Phoenix closed and didn’t fulfill its obligations for a teachout, a plan where a closing college provides ways for students to complete their degrees with minimal disruption.

The failure of the two colleges, which were owned by Dream Center Education Holdings, has cost the government money, the board said in its denial letter to Woz U.

Brent Richardson was the CEO of Dream Center Education Holdings until January. He’s also a part-owner in Woz U and is listed as a member of Woz U’s board of managers, the board said in its letter.

The board was concerned with Woz U's "management capability," considering Richardson's involvement in Dream Center.

During the April 25 meeting, Richardson told board members he would sell his ownership stake in Woz U so that the school could continue. It was unclear if Richardson’s brother, who also worked for Dream Center and owned part of Woz U, would be willing to do the same.

The closures of Argosy and Art Institute both weren’t handled properly, the board letter says. Art Institute students were offered options to continue their degrees that ultimately did not come to fruition.

Student records turned over to the board’s custody for both schools were inaccurate, sometimes showing incorrect credit calculations or listing a student as having withdrawn despite the student having completed their degree and graduating, the board wrote.

Woz U said the board focused on the wrong issues when assessing its renewal application.

"By focusing on a perceived ownership issue separate from Woz U’s business operations, the board overlooked our many accomplishments in advancing the careers of individuals to meet the ever-growing employment demands of Arizona’s technology industry," Woz U said in its statement.

School had 'substantial net losses' over three years

But it wasn’t just Richardson’s involvement that the board took issue with.

One owner of Woz U, an LLC called Jochanger, isn’t a registered corporation in Arizona, and representatives from Woz U couldn’t tell the board where exactly the corporation is registered.

Woz U’s financial situation was also concerning, the board said, as the school had “substantial net losses” over the past three years.

In 2017, the net loss was nearly $5.6 million. In 2018, it was $4.7 million.

Woz U also has changed its ownership without seeking the board's approval or informing the board in a timely manner.

Two years of tumult for Woz U

Woz U hasn't had an easy entry into Arizona.

In 2017, when the school announced its opening in Scottsdale, it did not have the approval of the state board. The school said at the time that it didn't believe it needed a license in Arizona, but Woz U is now licensed by the state board.

It offers programs in data science, cybersecurity and web development. All three programs have 33-week options for $13,200. The web development track has a 12-week, on-campus program for $13,800.

In December 2018, the board considered and dismissed a complaint over the school's quality after a report by CBS News claimed the school provided out-of-date lectures and had typos in coding materials.

Course materials sometimes just linked to Wikipedia pages, one student told CBS News.

"I feel like this is a $13,000 e-book," the student said.

At the time, board staff said they had received emails about course curriculum issues, out-of-date lectures, unqualified mentors, tuition and fee discrepancies, and enrollment and recruiting practices that weren't in line with board requirements.

But the board's complaint committee unanimously dismissed the complaint in December after receiving responses to the allegations from Woz U's chief operations officer, David Weems.

Reach reporter Rachel Leingang by email at rachel.leingang@gannett.com or by phone at 602-444-8157, or find her on Twitter and Facebook.

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