US Gov Sues The Art Institutes for $11 Billion Fraud

The Art Institutes, one of the nation’s largest for-profit school systems where people can receive an education in photography, has come under fire. Last month, the US Department of Justice filed a massive lawsuit against the company behind the schools, Education Management Corporation, accusing it of fraudulently collecting $11 billion in government aid by recruiting low-income students for the purpose of collecting student aid money. Whistleblowers claim that students graduate loaded with debt and without the means to pay off the loans, which are then paid for with taxpayer dollars.

David Walker at PDN writes,

At the Art Institute of Pittsburgh campus alone, there were reportedly about 600 photography students pursuing a bachelor of arts or associates degree as of last summer, says Kathleen A. Bittel, the whistleblower whose testimony before a US Senate committee last fall helped trigger the federal lawsuit against EDMC.

[...] “Where are 600 photography graduates going to go? You cannot absorb that many in one city. How are they going to make money?” she says.

Bittel says EDMC had plans last summer to increase its photography student enrollment by adding a 12-15 month diploma to the program. The new degree was intended to attract students who wanted a “quick fix” in the form of a degree they could earn faster than an associate’s degree with minimal effort, Bittel says. “If the bachelors students can’t find jobs, where are the students with [12-month diplomas] going to go?”

One former student they contacted commented that, “It’s like they’re pumping photographers out like little cookie cutters.”

The Art Institutes: Legitimate Photo Schools or Accessories to Fraud? (via DWF)

Image credit: The Art Institute of California – San Francisco by sebastianjt

  • MM

    I’m so torn about my feelings towards this school. I attended the SF location pictured above and really enjoyed the majority of the instructors and made some amazing friends and colleges in the field.

    Due to unforeseen health issues, I had to quit near the end of my bachelors. By the time I was healthy enough to finish, I was living half way across the country and the online version of the school would not accept the credits from the campus! I had to spend months on the phone with the dean of the SF campus before I was able to downgrade to the associates and finish remotely.

    The problem is the $160k I’m sitting on in college debt, constantly raising due to interest. The last I checked my base payment on all loans was $60k a month!

    Sure, I have an industry job… but I only make $10/h while working 40 hours a week. Exactly how am I supposed to pay off that degree?

  • anonymous

    I know Shane and he is right. Complete waste but the VA wont reassign you. Once you’re there you are stuck or you pay out of pocket. Sorry you had to go through this man. The miami location will be gone soon. I have never seen such poorly written research papers. And they were on a QEP push last year to satisfy the accreditation of SACS. Anyway, The building will eventually be demolished like the herald building to make way for the casinos. It’s in a horrible area and they even charge you for parking without reimbursement. The cafe is disgusting and also costs an insane amount to the average student. But those high class rich students surely have no problem. The faculty ignores any criticism you provide them. Problems there escalate and see no resolve. It’s run like a mafia. If you observe the professors engaging in wrongdoing, approaching the chain of command is worthless. It’s almost like they hear your complaint and reassure you that they haven’t heard this problem from anyone else. That is completely false. I know for a fact that I am from a group of vets that go in about the same issues and they were told the same thing. Nobody else seems to have an issue so we’ll just ignore you. Complete crap. I can go on and on for pages and pages about the reasons you should not attend this institution. I’m going to wrap up with this, save your money and save your sanity, skip enrollment into this this university. It isn’t worth the drama.

  • Mark ‘Storm’ Farnik

    Would any of the former AI students here be interested in filing a class action lawsuit against AI of America? I got suckered into the Art Institute of Colorado, and blew $14,000 in one semester before I got smart and got the hell out of there. I’ve been waiting on this litigation to come out officially, but now I feel like it’s time that we, the students, who have been bilked of millions of dollars and left with useless degrees and inadequate training, sue them and put them out of business for their corrupt practices.

  • Robert

    so if they are doing that and some of the students used their GI Bill for it are they going to receive a refund of it?

  • Heaven Kincaid

    Not only do they not provide the tools, but they more or less(as of 8 years ago) charged students around $1100 to sit in a class for 4 hours, per class, per week. Teachers that consistently get complaints for not actually teaching and who regularly have a low output of competent students do not get reprimanded or replaced. And not a cent of the money that students pay per week, per class, goes to help them get the supplies they need to pass the class. Photography is actually the least expensive degree they offer when it comes to out of pocket costs for supplies. The other degrees can easily cost a student hundreds of dollars out of pocket in supplies for the quarter for each class they take.

    At the Pittsburgh branch(8 years ago, I’m not sure what it is now) most students depend on public transportation which is also not included in tuition costs like it is in other colleges and universities in the area; and cost over $70 a month for an unlimited monthly pass.

    The Pittsburgh branch also used a loophole(The other ones probably do it to) to get even more money out of their students by dramatically increasing the prices of room and board every quarter. It’s not part of “tuition” so they used it to rob their students blind. In the time I spent living in their housing, before I found enough friends to move out with, they increased my room and board by 300 a month, enough to clear the overhead on my grants, loans, and scholarships and start digging into my pockets. They also practiced policies of not fixing damages to the rooms so that they could always have an excuse to not pay back your security deposits, so every time you moved to a new room or they moved you, chances were good that you would have to pay a new security deposit because so many things were wrong with the rooms that you weren’t going to catch them all in your move in room eval. I once spent a quarter in a room with 5 holes in the walls and slept on a broken bed every night. I didn’t finish my degree. I left. It wasn’t worth it. Community college gives you a better education for your art degree and money. Hell, you can spend $299 a year on a subscription to the Stan Winston School of Art’s website and get a better education than they offer.

  • Heaven Kincaid

    They don’t provide you the tools you need to succeed. If you don’t come into the school with money falling out of your pockets and demonstrable talent enough to get a job without the degree then you aren’t going to leave with it either. I know from experience.

  • Heaven Kincaid

    While I agree that it should be goal to come out able to adapt to new technologies, I can’t on good conscience use that as an excuse to say it’s OK for a multi-billion-dollar school to not provide it’s students with the best advantages possible by providing the most up to date software and equipment. It’s ridiculous to even think that this is OK.

    Time after time after time, the only people I ever saw do well in these schools were people who went into them already perfectly capable of getting a job. These particular students were lavished and praised in every class. The teachers were perfectly happy to hand them, and the rest of their classes, assignments without teaching anything and use the already perfectly capable students as an excuse to not care about the rest of classes’ success or failure. They were there essentially to put projects in their portfolios, something they also could have done without the school.

    The fact of the mater is that now having AI on your resume without any other reference to your skill or experience in the field will more often than not get it thrown in the trash. Employers prefer other art colleges(like FullSail and SCAD) because having a degree from those schools actually speaks for your skill in the field. Those schools have standards; AI does not. If the school you go to doesn’t do anything but add projects to your portfolio then you’re wasting your money. Craig’s list can do that.

  • Kari

    Maybe those photographers aren’t that talented. You have to stand out in that field. I personally attended the Art Institute of Pittsburgh and had multiple job offers at my portfolio show. I worked for a major apparel company in Pittsburgh and then went on to work as a designer/photographer for another in Southern California. The amount of debt is disconcerting, but there should be a filtering program to that school. It shouldn’t be open to every kid. Half of those students were lazy, partying, weed-smoking kids who did everything last minute with no heart. To be successful in the art world, you have to look beyond what it “required” of you. Your portfolio needs to stand out. It’s like a sport where kids aren’t willing to hit the gym and do extra conditioning to be a starter. There are multiple factors in the lack of jobs… blame should not be put on EDMC or the Art Institutes alone.

  • Christian Žagarskas

    I dont know if I agree with one single RED cent of this. I went to AIP for a very simple set of reasons: basically, I knew I was going to a for profit school and I knew I was going to teach myself and I knew I needed some kind of degree that said “I know this see the degree” – I did not want a School, I wanted a gladiator arena, a proving ground and I got exactly what I paid for and I loved it. I read CMU books because I could not get into CMU, I watched MIT videos because I could not get into MIT, I went to AIP who takes anyone for enough money and I learned what I wanted to learn in addition to the curriculum.

  • disqus_4XOT9SFzIv

    I want to sue the Art Institute in Henderson, Las Vegas area over the cost of student housing. I went to orientation and they told me how safe this place was. My daughter signed a lease for so called student housing while half of the housing was locals drinking beer by the pool. It was half student housing and half rejects thrown into an apartment complex. I went through 9 grand in a Parent Plus loan in 2 quarters thinking I was keeping my daughter in good hands…a total rip off…college kids can live in dorms and a deception of a fancy apartment is not the way to go. I mean you are talking $1,950.00 per quarter. per girl….4 girls per apartment…what does that add up to? And then they have to buy their own food. You cannot eat your apartment. I did not take out loans to send my daughter to some fancy apartment complex, I sent my daughter to go to college…So if there is a good real estate attorney out there, let me know…her lease had not a set amount in there and I can see that the apartment complex is up for sale. this is not a college………has nothing to do with every other arts college..this is all for profit between the stockholders and who owns the real estate involved…..

  • Rick Bauer

    It’s nothing more than a very expensive diploma mill.