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

  • Amethyst Vargas

    I attended AICASD for a BS in Graphic Design. I believe that I was provided with the information and skills needed to succeed in the field and I was lucky enough to have snagged a design job in the company where I worked as a receptionist. From there I was able to move up to a $45,000/ year job however, this is where it gets crazy, I still struggle to pay my student loans! Going in to the school, I was told to expect between a 35,000-40,000/year pay check for a graphic design job. How can anyone possibly afford to pay off their loans making this amount of money. About $15/hour is not enough to even pay off the interest on these loans. If someone would have clearly explained this to me going into the school, I likely would have changed my mind. I expect to be paying my loans for the next 30-35 years and will be in my mid 50s. Ridiculous.

  • Ryan Merchant

    Same exact situation when I went for Culinary. Didn’t finish because I couldn’t afford it, and I have 30k in student loan debt for a degree I never finished.

  • Matthew R Webb

    I guess the students couldn’t get jobs outside of their degree and continue to pay their loans off? I just don’t get the concept of taking out a loan you know you can’t pay for. Or did these students really think when there were 600 graduating from photography they would all somehow find jobs in such a niche field? I kind of figured most artists understood that degrees in art were very risky choices, often times with little or no future in that field. I don’t know how many art students I’ve seen let their degrees go to waste due to arts being a difficult field to survive in.

  • mlianopr

    They, should do something fast!!! this smells fishy…!! the cookie cutter, good one my friend…!!! lol…

  • Allan Bloom

    this is just the beginning, every other school is going to get it soon enough. just wait, administrators going to be loosing jobs quick, all the schools are scams now days.

  • Christian Zagarskas

    This is absurd. I went to the Art Institute of Pittsburgh and I KNEW it was a for profit school. It took me less then 10 min to sign up and get accepted into the school with grades from high school that MIT and CMU would never even look at. I was 100% unqualified at that time and this school gave me a chance. I have since paid $120,000 in student loans down to 16k, owned 2 businesses, and am now a partner at a multimedia firm called RedFish Creative LLC. Thank you AIP for allowing a slacker like me a chance to get an education. Thank you.

  • Christian Zagarskas

    This is absurd. I went to the Art Institute of Pittsburgh and I KNEW it was a for profit school. It took me less then 10 min to sign up and get accepted into the school with grades from high school that MIT and CMU would never even look at. I was 100% unqualified at that time and this school gave me a chance. I have since paid $120,000 in student loans down to 16k, owned 2 businesses, and am now a partner at a multimedia firm called RedFish Creative LLC. Thank you AIP for allowing a slacker like me a chance to get an education. Thank you.

  • JC

    Attending a state University with a graphic design program was the best choice. I learned everything I needed to know in the art field (BFA in graphic design and got a job IMMEDIATELY after graduation), had the opportunity to become well rounded taking classes in every field (history, match, physics, lit, etc) and graduated with only miniscule debut (had no help from any parents) which I paid off in a few years. Art school is what you make it. The private schools who charge 20, 30, 40k+ a year are frauds.

  • Mary Beth Casey

    Why are they not going after ANYONE pursuing a degree in Psychology? My goodness what a worthless degree unless one is dedicated enough to advance into graduate degrees. Oh of course, the art of psychology works well in sales right, I’ll have fries with that burger.

  • Mackaveli

    As a former employee in the Financial Aid department at one of the Ai schools, I know I am going to hell for some of the loans I put these students in! The interest rates for private loans (for those who had challenged credit, which comprised most of the students) was absurd. I put my job in jeopardy many times by trying to convince students to go to their local community college to get their basics out of the way. Some of the adjunct instructors were simultaneously teaching at the Ai as well as at the community college. The same course would be $1700 at Ai and just $250 at the local community college! Both taught by the same instructor! Unfortunately, it is all about the money. And don’t get me started on the VA educational benefits. Ai referred to our VA students as “cash cows”!

  • Brandie Sterriker

    Well regardless if it was stated having been an Ai student I know for a face that they made me pay about $600 for a kit that each year they took more and more supplies out and knowing most were on grants and student aid still kept putting more and more burden of they supplies and programs that any other school would already have but expected us to provide and or go without. Things crucial for the fashion design & interior design majors. I couldn’t afford to continue because of this. Every quarter became more and more expensive.

  • Dave

    After reading the article I still don’t have an understanding of what was fraudulent or why the school would care whether their money comes from poor kids taking on student debt or from rich kids paying out of pocket as they should earn the same either way. I absolutely agree that for-profit schools are a horrible and photography is not necessarily the best degree to pursue, but if giving out useless degrees is now considered fraud then I would think almost every school in America is committing that crime.

  • Courtney

    I went here for photography and I agree 100% not to mention the instructor made me feel incompetent on a regular basis and making me dislike photography

  • Paul

    HOLY CRAP. Even I can’t find work in my town and now I know why There are just too many unqualified designers looking for the same job swamping the interviews and applications process. I might as well apply for fast food for all the good an education gets you when the Colleges are finding ways to milk the system by taking money from programs designed to help the talented poor.

    But these people are not talented, they are only poor and are being deluded into a career that they are not suited for and delaying their education in fields that they could excel.

    Adding to the fact that this school knows they have no talent only proves they are crooks.

  • Miss Denier Slayer

    I went there. Top of my class. Finding a job was like pulling teeth, though. And salaries not much more than $30,000. Certainly not enough to pay back the $70,000 in loans. Also, I noticed when I was there, how many art students had almost zero ability. We always wondered, like, where are these people going to go? Why are they here? They can’t draw, they can’t design etc. I guess I didn’t think much about it until after the fact. But in truth, there are really only about 2-3% success stories out of the school. I ended up learning more lucrative coding skills (without school) and merged that with design/animation to get better jobs around the $50,000 range. On the plus side, at least they aren’t outsourcing design to India.

  • Kent Corso

    The between-the-lines issue here is that the Education Management Corporation also turns out psychologists, businessmen/women, and other professionals — not just artists. It is predatory in some ways, but highway robbery in another way. My tuition (I none of their non-art programs) TRIPLED in my fourth year compared to my first. My school loans from Education Management Corporation EQUAL my mortgage. This company deserves the lawsuit that has been filed.

  • A818

    I don’t understand it either. Did the school force these students to attend and study photography?

  • Plisko

    Someone tell me where we are supposed to draw the line? Should we drop all art majors from colleges because most people don’t end up making a living in the arts? There is a whole list of other kinds of majors that don’t guarantee jobs as well. Should we change all college majors to “checkout clerk studies” and “table waiting analysis” because that’s what offers the most jobs when they graduate? Making a living as a photographer or a designer is a dream, not a birthright that you can purchase.

    Student loans help people who couldn’t get a loan so they can still have a chance to better themselves. Some private schools extent the same help to people with bad school records so that they can have a second chance. I have issues with the student loan system and the over inflated price of education, but not with the quality of education or admission standards.

    The Art Institute of Ft Lauderdale accepted me with a GED and a terrible high school track record. Student loans agreed to fund it even though I had a terrible financial record. It was me who decided to prove myself with that second chance by getting straight A’s for the first time in my life.

    NYU accepted my credits from AIFL and I got a Bachelors degree from NYU in 2 years. Student loans funded that too. NYU never gave me any promises of job placement, but people still show some respect when they hear that I attended. Anyone who understands education knows that the degree makes you smarter in life, even if it doesn’t guarantee a job. Ironically, the degree from NYU then got me a job as a teacher at The Art Institute of Phoenix for a while. So I have two different inside perspectives.

    The problem here is not specifically the schools. . . or the idea of an education in something that won’t get someone a job. The real problem here is that the educational institutions and the student loan agencies are looking more and more like the relationship between hospitals and insurance companies. Because the loans are so easily available, students don’t feel the price of their education until after they graduate. . . or not graduate. . This means that the price hikes of the schools over time is not being met with any resistance by the people who are shopping for them, so there is no balance against their increases. Then everyone just throws their hands up about the price of education as if it was a free market phenomenon the couldn’t be helped.

    I will admit that when I went to AIPX I had a huge class going in and I had half to a third as many people at my graduation. . . Some of my classmates had legitimate reasons for dropping out but there were also whole lot of slackers that just didn’t seem to realize that they were already in debt and they needed to take it seriously.

    So I ask again, where do we draw the line? I had all the appearances of a slacker and they gave me a chance. Who exactly should we decide isn’t worth helping with an education?

    My student loans stink, but I would never take back my education.

  • Cathi Korelin

    Since when does a school promise a job? Who says they will all stay in one town?

  • View Minder

    They’re not pumping out photographers… they’re pumping out ‘photography degrees.’

  • point

    Never go to a for profit college or university. Stick to state or non profit and get a BFA not a BA. In theory, they are not the same. Also, AA degrees should only be gotten as part of transfer to in state college BFA and make sure there is a transfer for a major and follow it 100% or risk more semesters and cost. If the program has more than 40 students per major class year, ask why and look elsewhere. Try to only have courses of 15 students max where you go. Except lecture courses.

  • Subtle_Hustle

    No, but they have a history of making false claims. I attended the Art Institute of Ft Lauderdale and they told me over 95% of students were finding employment after graduation. What they didn’t tell you is how many of those students were finding employment in their field of study, which was obviously very, very low after meeting many of the grads. They have professional sales reps who’s job it is to sell admissions, regardless of the students capability as an artist. Make no mistake about it, this school is about selling diplomas NOT education.

  • A818

    Grow up! Most schools do the same thing, private and public. It is up to you to do your research instead of going on blind faith , then crying like a baby. No one put a gun to your head and made you enroll. People need to take responsibility for their own actions and stop blaming others.

  • Manda Pandu Wally

    I went to the Ai of Pittsburgh, and believe it or not, many of these students didn’t know how to read, some didn’t know how to do laundry, and others were promised that this school ‘would teach them how to draw good.’ They had no clue what they were getting into.

    I still haven’t been able to find a job, and I was told many times that I have great potential from beginning to end, and I was looked up to a great deal, which is why I stuck with it. I’m stuck at home now with over 100,000$ in debt. I was promised that I would be able to consolidate these loans and only have to make minimal payments a month. What they didn’t tell me is that the consolidation only works for federal loans, not the private loans. My best chance, I’ve been told, is to move to California or out of country, but with bills at over 700$ a month on only loans alone, I can’t even hope to afford that.

  • Manda Pandu Wally

    The Ai in Pittsburgh promised similar stuff. There was a guy kicked out for putting drugs in drinks to try and get girls, and the main housing area was right next to the city prison.

  • Manda Pandu Wally

    I went to AiP for Animation. I have many, many friends who are still looking for jobs, and many of us are pretty good at what we do. We’ve had other people look at our stuff, and they say it isn’t bad. I was looked to from many people about Networking, and one of my best friends from there has met many directors and artists from different companies. She’s currently learning from the lead animator of Jimmy Neutron. Problem is the fact that many of us aren’t even able to pay off a rent anywhere because our debt is so huge and the monthly payments are bogus. It didn’t matter that we studied hard or learned extra. At one point, I was looked down upon for trying to learn outside my “animation” degree and told I would ‘never use that knowledge’ but I made a connection out of it who struggled the same way I did.

    Our field is over saturated. Some of the teachers were extremely kind in that they would warn us and tell us, but by that point, it was too late. We had already gained so much debt…They promised consolidation would help, but they don’t tell you that it won’t work with private loans, and they only allowed you to go with 4-5 different companies to get loans….

  • Kevin Sellars

    How do I get in on this or is there a class action lawsuit going on? I went to AIP for Culinary and the best job I can get is dishwasher… At this point just removing my balance will be more then enough for me…..

  • Amber Guerin

    I hope some of the money the people took out to go to this school will be sent to Sallie Mae. If state and federal will be compensated, the students who have serious loan debt should because also. A recruiter came to my school every year when I was in high school and it took me a year of attending the AI in SF to realize that something was terribly wrong with the amount of money I was being charged for the type of education being afford. Long story short, I will be paying the loans accrued at this school from 1 year of attending until I am 51 years old. I am still pursuing my dream to become an artist at a state school however. I like to pretend that I am paying for the fantastic education I am receiving at SJSU. Thank god I didn’t stay for the 3 years I was supposed to. Anyway, fingers crossed for some financial relief from this discovery.

  • OneHairyfoot

    Are you top notch? What are your goals? Investigate your goals and the Companies you target! Target your Portfolio to the jobs you are looking for… Target your strength. U can’t be jack of all trade. There is no such thing in your field. IF your a Modeler Get out of Maya and Max. Zbrush or Mudbox are your number one priorities! Lighting and rendering are top priority! Thyme you portfolio, is cool. Listen to the Teachers that have real world Experience… I hope this helps.

  • DESTRO123

    Has anyone gotten a job with a degree from this school?