PetaPixel

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


 
Get the hottest photo stories delivered to your inbox.
Get a daily digest of the latest headlines:
  • David

    Does anyone have a contact number for the US department of justice so that I can participate in this lawsuit because AIW kept my pell grant money?

  • screwedoverbytheNavy

    In reference to Debtforbreakfasts’ comment about not being able to find a job after graduating from Ai…..I see no relevance with where you graduated from (with an ARTS degree…hello? Ever heard of “starving artist) and not being able to find a job. More than 1/2 of America is out of work right now and in debt. You’re blaming Ai for your indebtedness but didn’t you realize that you were going to carry student loans and payments after you graduated when you signed your name on the dotted line? As for not finding a job…welcome to the REAL WORLD!!! My husband served 15 years in the U.S Navy and was LAID OFF…yes, the military downsizes…. unscrupulously- it was a very, very dirty and greedy thing that they did recently to 3,000 Sailors, with more cuts coming in the next year. So, after my whole family selflessly sacrificed so there could be such a thing as a starving artist, he is out of a job- a Veteran!!! He collects unemployment and we are contemplating getting food stamps.Again, he is a U.S. Navy Veteran!!!! So, don’t complain about not having a job, it’s the way of the world right now, you knew what you were getting into before you got into it!!!

  • damianmann

    Good deal. I’ll give you one example of my time with the one in Houston. Our class in Adobe illustrator was taught by an illustrator….of books….who had never used a computer in his life. He couldn’t even put a gradient in a circle. That’s what I owe 54,000 dollars for. So good. They should have to pay us back for our wasted time/lives and all of it.

  • damianmann

    Good deal. I’ll give you one example of my time with the one in Houston. Our class in Adobe illustrator was taught by an illustrator….of books….who had never used a computer in his life. He couldn’t even put a gradient in a circle. That’s what I owe 54,000 dollars for. So good. They should have to pay us back for our wasted time/lives and all of it.

  • Kat

    Their online classes are abominations. It is pathetic to have an “instructor” who has no real certification to teach, and class “lectures” that have been plagiarized from other sources. I found that one class in particular had every single page copied from a website copyrighted in the 1990′s.
    I was taught in high school how to discern an incredible source from a credible one.
    The Art Institutes are not a credible source for any education.
    I should have known; I should have seen the rhetorical appeals of a hard sale when I was calling about information and wound up applying before I knew it.
    I deeply regret acquiescing to the appeal to my fears, “Katherine, it’s my experience that if you don’t sign up now, you never will”, the false authority, and the blatant lies about credit transfer rates.

  • Jamie

    Thank you for writing this. I thought I was alone (Art institute of Fort Lauderdale drop-out)

  • Dorothy R

    Get out as soon as you can, their only goal is the money not your education. Astounding how now I’m at a community college where 30+ of these classes are equivalent to 1 class at AI in terms of cost. Teacher quality at my community college is better in my opinion too…. I wasted 25k at AI, but I’m sure glad I got out while I was still a freshman there.

  • Ginger

    In photographer? You don’t say…

  • Name

    Thank you for the post and exposing the scam. When we’re down or get too enamored by the “quick fix” solutions, temptation is just too great. My nephew got scammed at the Full Sail Academy. Bottom line, if it’s too good to be true – it is. There’s no substitute for hard work (i.e., Science, Technology, Engineering or Math degrees) – including good old elbow grease. Keep your chin up, keep enlightening others and exposing scams like Ai’s or other so called “schools/institutes” that sell the same snake oil. Wish you the best of luck.

  • Name

    $200K my a$$. Interesting how the Ai shills are trolling and putting positive “spin” on this. I hope the government gets the $11b and bankrupts these b@stards.

  • wendy

    THis schools is a fraud. I attended this school and they spent more money renovating the school then helping students find jobs after graduation. Alot of people couldnt afford it after a year that they dropped out and the debt people concur after awhile is massive.

  • person

    I had a problem with this school too they told me that everything would be covered there would not be loans and when I keep calling them to solve the problems of not telling me the information on why I had to pay they told me that I signed for the loans and are forcing me to pay for the costs that they had promised I would not have and are causing me a lot of problem and troubles also even though I had completed my classes and withdrew from the school they all of a sudden told me you can’t transfer the credit that you have and keep trying to convince me to stay I’m live with a family of 5 and only one of us works so we have a low income yet when I when there to talk about how to pay they lied to me about how I could go without have to get anything extra like loans when I attend and also every time I call they keep trying to push me to another person or try to convince me that I had to pay anyway and that they told me about the loans when they haven’t told me a thing about it.

  • person

    you should go complain to the BBB the better business bureau go and file a complaint to them and tell them your problem.

  • http://www.facebook.com/chris.silver1 Chris Henderson

    I feel your pain, as a past student studying graphic design. The president of my school was fired for stealing scholarship funds. Teacher’s quit all the time and graduation dates got pushed back, so we had to waste more money. I feel like I should be forgiven my student debt….

  • http://www.facebook.com/danita.silver Danita Silver

    My daughter experienced something like this. The school got her a lone and then middle way in they tell her that they returned a large protion of her loan and she would have to apply somewhere else to finish her education.

  • http://www.facebook.com/danita.silver Danita Silver

    they are under paid and jobless too. MA in Accounting, anyone

  • http://www.facebook.com/danita.silver Danita Silver

    The school my daughter attended had a lot of poor blacks. Lots did not have a background to attend this typeof school and most would leave after the 1st year if their money lasted which most didn’t.

  • aspiringfashionstudent

    Hi. I’m contemplating whether to go to the Art institute in Santa Monica for their Fashion Marketing & Merchandising or to Cal State Long Beach, can someone help me a bit? I feel like if i go to the art institute, I will have better connections to a job but I will also have around 60,000 in debt. So I’m pretty conflicted.

  • dlynn

    happened to me: low income. no way to pay back my debt. with two semesters left they kicked me out because my co-signers credit turned bad. now $86,000 in debt and no degree. education was sub-par anyway. in 3.5 years at AI i learned less than i had for the same trade at a vocational school. i cant even go to another school now because low and behold they are not accredited where i live. pretty funny how they never told me that. not that it matters since i cant pay off my original debt to even be considered at another school. i shouldve been MAKING $86,000 a year by now! instead i get to enjoy the life of renting a room out of my moms house. i hate you art institute you ruined my life and any chance i had at making myself a better person. and theres nothing i can do about it.

  • DoingFine

    I completely agree with this. Look, for every sob story you have about someone that didn’t make it I have someone who came from an underprivileged upbringing, rough neighborhood etc. that did make it….I have also worked on numerous feature films…went to AI, graduated with honors, I struggled and invested in my education. I worked up to three jobs and supported a family while in school. I have always thought that the recruiting at AI should have been more strict but lets face it…if we turned back the clock and gave all of those people their money back, tightened up the rules…..would those people have even gotten that chance to achieve their dreams…No …no they wouldn’t …they would be serving you cheeseburgers, and coffee….I knew people who had no artistic skill when they started AI and now they are some of the best artists I know….It isn’t the education…its the dedication…Don’t take away my hard work and degree because of those who couldn’t put their lives together and made a bad decision. Take some responsibility for yourselves…everyone I know that lives by this, that went through school with me, is working in their field. I know there are examples either way but a lot of people who failed at, or after AI, would still have the same life problems because they refuse to invest in themselves.

  • DoingFine

    Well stated

  • DoingFine

    I went to an AI in california. We used to have people form the east coast come through all the time….In fact I worked with one of them a couple of years back….Interesting enough.. We had a 24hour lab. The AI let him use all the equipment and facilities free of charge to update his reel. He networked with other students and found a place to live….and our job placement found him a job….turns out that if you are an Alum then you have access to those services at any city where there is an AI. Kind of cool I thought. and no….I am not an AI employee…I am a student who values myself and my degree that I worked hard to achieve….I am sorry if others didn’t have the same experience

  • Robert W

    I was told them I’m trying credits will transfer if i wanted to live AI but when it was time for me to go to a new school for financial reasons I went to State College and they would not transfer

    now I am about 1 year away from getting my degree and could never afford to restart a different school

  • FormerAiRecruiter

    I am a previous recruiter with Ai. I started with the company coming from a sales background and really loved the idea I could change lives in a creative setting. Once I was there, after about 2 months, I realized this was not a place I wanted to be. I left the position after about 6 months because of unethical behavior and unrealistic “sales” goals.

    The one thing I will say, is that they are VERY concerned with stating the correct stats and do have a very intense training process. This is for many reasons, but mainly because of federal regulations. There are tests have to pass on a quartly basis regarding regulations and you can even be suspended if they catch you giving out incorrect information.

    I will also say that most of the admissions recruiters are very educated. Someone stated on here that most don’t have a bachelor’s degrees, when the case is actually that most are either getting their master’s degrees or have them. It is a HUGE revolving door. Out of 25 people in the department, only two of them had been there for over a year.

    I am SO happy I got out of that school and environment. The main reason I wasn’t able to meet my goals was because I couldn’t push people into a school that could potentially ruin their life.

    I am so happy that something is being done about the school. I hope that they go bankrupt and everyone sees them for what they really are.

  • Papalaz

    Heap Um Big Face – keep your racist bile to yourself you fat faced freak. God help your fat faced freak of a daughter.

  • Amy Robin

    I was a former student of Ai in New York City for Fashion Design. I have 80,000 in debt and can not find a job. I can’t even find an internship that would accept my application. They claim it’s not a legitimate school compared to the other fashion schools in NYC. We were promised career advisement and placement, we were promised better salaries. All we were given is this lifelong debt that I can never pay off. Now I’m going to community college to study the business side of fashion and I really wish I did this in the first place. Ai was the biggest mistake of my life and I honestly hope they lose this law suit and have to shut down every single location. The college is a horrible place that should have never been built in the first place. I’m ashamed of going there.

  • AISTUDENT

    I am currently at AI and i have to say this does not surprise me in the least. The school in my opinion does not understand how to be student centric. It is a money making machine first and foremost. You have to ask questions when the admissions people make up to 2.5 times that of the instructors. The school is greedy and in my case offers academia that is not relevant at all.
    Their student selection is dire, its a case of anyone who is able to can sign on the line. The yellow ribbon scheme is a scam where people who are “entitled” to free course [not sure why and please do not give me the "they have served speech"] do not take school seriously. Honestly I hope the AI learns from this and if not I would not be disappointed if they close.

  • Linda

    Personally, I would like to know why Sallie Mae is giving out loans for people that can’t afford to pay it back to start with? For an Art Institute online?

  • Linda

    I’m so mad at myself. I could have taken a 20 dollar course for graphics design online and gotten more than AIO gave me. I was told that if I dropped out I would still have to pay in full, does anyone know if that is true or false?

  • disqus_2QdpKfL2sR

    Time to shut sallie mae down

  • disqus_2QdpKfL2sR

    Because they paid off the government to take away any consumer Protections. Like bankruptcy relief.

  • http://www.facebook.com/gmcorti Gary Michael Corti

    I went to the art institute of pittsburgh and 2 years into it i realized I was being hustled. They should at least clear our debt. It’s not my fault both of my parents are drug addicts and i desperatly wanted to get out of that negative enviroment. I was young, naive and taken advantage of. Now i’m at default, and i cannot get a loan, so i can’t even get into trade school and i’m right back in that same negative enviroment.

  • http://www.facebook.com/profile.php?id=100000113316434 Shanna S Jackson

    All of the blame can’t be on the AI’s though! It’s a student’s responsibility to research the career field that they are interested in being in as well. If you look on web sites such as Bureau Labor Statistics (BLS) you can see what your future may look like according to the career you want. I mean, schools shouldn’t lie either, but all of the shame can’t be on them. Before you pay thousands and thousands of dollars to a school, research!

  • Michael Bahari

    I AM US US WAR VETEREAN AND LETTME SAY THIS, I AM IN 1000 IN DEBT RIGHT NOW FOR BOOKS. BUT YET THE VA DIDNT NOT SEND A STPEND THAT COVERED 1000 FOR BOOKS. THEY ONLY PAID ME 800. SO HOW IS THE AI OF NYC IS INCURRING MORE THAN WHAT THE VA SAID THEY ARE ALOOTED TO CHARGE. I EARNED MY RIGHT T GO TO SCHOOL FOR FREE BUT YET THE AI OF NYC WANTS TO STEAL MORE MONEY FROM. ILL BE DAMN IF THEY DO. I EARN THAT THROUGHT BLOOD SWEAT AND TEARS AND A HONORABLE DISCHARGE. I SACRIFICED ALOT JUST TO GET THAT GI BILL. I FEEL EVERYONES DISGUST WITH THIS PRIVATIZE CORPORATION. AND AS OF TODAY APR 26,2013 THEY CALLED MY PHONE AND QUOTE ” WE MAY HAVE TO TAKE FURTHER ACTION AGAINST YOUR ACCOUNT” YOU DARE CALL MY PHONE AND TELL ME IF I FAIL TO CALL YOU BACK….. STANDBY LAWSUIT COMING ABOUT.

  • Its not always “e.z”–CD

    They trimmed off alot of great faculty too. :(
    It was a tough choice to manage the costs for tuition.

    School is what you make of it guys. The thing that this school has is awesome
    tools to work with like in the industry. They don’t prepare you, they simply guide you so you can prepare yourself!

    Nothing is going to be easy unless you work hard at it first.They remind you to make alot of connections too! Alot of people who complain about it is because they didn’t finish their projects on time/ do extras for their portfolio and worked hard at it to improve their skills. If you don’t finish it to the end then you fall off to great debt-feeling it was a waste of time and money.

    At Ai they don’t draw for you if that is what you think they will do. They simply teach you how and draw the rest yourself and improve. If a person takes a class once a week their teacher is going to say”Do this everyday”. If you only do that once a week for the class it isn’t really improving yourself. That isn’t how its going to be at a real job anyway because its way harder than the projects they give you. The reason for that is that It may be the same quality but the catch point is that it will be much more frequent. Full dedication!

    For game design/animation- Ai in California has 10+ classes in 3D compared to 3-4 classes in community/non for profit colleges. Become a sponge when you are in school. Eat, sleep and work at it well.

    If you feel the school doesn’t have enough of your programs, or amazing “golden” teachers, move on to the next school! You are investing in yourself, for yourself/family and your happiness for many years to come afterall.

    btw I did have to submit a portfolio to qualify for the game section. :)
    I’m being closer to graduating, have lots of connections and internship experience.
    Remember If your stuff is not good or if you don’t do things on time (reliability) who is going to recommend you??

  • http://www.facebook.com/Keefiers Keefier Phillips

    I AM SOO GLAD I FOUND OUT ABOUT THIS A DAY AGO. I RECENTLY WENT TO SPEAK TO AI OF DALLAS AND I HAD ALMOST WENT BACK TO START MY REGISTRATION WITH THEM , THEN I DID SOME LATE NIGHT RESEARCH AND I FIND THIS ARTICLE AND MUCH MUCH MORE! I FEEL IT IS TOTALLY SCREWED UP THAT SOME ONE OR ANY INSTITUTE, COLLEGE AND(OR) UNIVERISTY WOULD DO SUCH A THING TO THE AMERICAN PEOPLE IN THE ECONEMY WE ARE IN TODAY! I SAY LET THE LAWSUIT DESTROY THE AI’S EVERYWHERE ON THIS GLOBE. I STAND WITH YOU ALL HERE!!

  • kj

    spelt??

  • filmgirl12

    He spells like he’s texting! lol

  • Michael

    I was a graduate of the Art Institute of Dallas in Interior Design. I felt the education was “ok” as I was from the mid west. Little did I know they were not accredited, and furthermore was not told so. I was hounded for months and told I could get all the financial aide I would need. I worked full time to support myself and went to school full time, straight through, with no time off. Well after 20 years I am still paying my “portion” of the money I was talked into borrowing. I could have gone to a local “tech” school and received just as good, if not a better program for way less money. I learned a hard lesson. If any one wants an education any Art Institute totes , please go to a regular university with similar, accredited programs. Your money will be well spent. Thank you.

  • barbie

    ummm…im sorry..can you please check your spelling and grammar before you bash anyone.

  • barbie

    what program were you in? my son is looking at AI and now we are scared to death!!!!

  • crepusculartex

    Interesting, the average salary at WETA is $26,000.00
    per Indeed dot com., glassdoor, and the WETA careers website. of by the way, that is 56% lower than national average. It appears that you may have more in common with the overachieving recruiters than you state.

  • Anonymous in SF

    I’m not going to comment on AI specifically because I don’t know much about them, but I know that for-profit schools, all of them across the board, have absurd student loan default rates because they have no admissions standards.

  • singlemother48

    You can’t write, so why should you be allowed to go to school anywhere??????? Did you think the school was free?????? Of course you have to take out loans to go to school. Learn to write, punctuate a sentence, and understand the cost of an education before you hurt yourself and others.

  • singlemother48

    Stand in line, honey! There are thousands of people who want to sue the Art Institutes. They kept your pell grant money to pay for the classes you took…that’s legal, even if you think it’s immoral.

  • singlemother48

    Don’t do it!

  • singlemother48

    Ai is an “accredited” school……..there is no such thing as a “credit” school. Just because a school is “accredited” does not make their classes transferable. General Education credits will transfer between schools anywhere, it’s the core classes that rarely transfer.

  • singlemother48

    I am a parent of a college student and a former employee of the Art Institute of Pittsburgh. Please, please, please, do not waste your money sending your daughter to Ai. She can get a Graphic Design degree at a State school for far less money and a better education. There is good reason for the Federal Government to be suing AI and it’s parent company EDMC; they are not ethical.

  • Anonymous

    As someone who worked in Ai, I can attest that they do not provide the necessary tools needed to succeed in many, if not all, of the available majors – especially Graphic Design (quite possibly the only logical and profitable major provided in the school). Many times we’ve had Alumni who came back complaining that some of the required software training needed to begin a career was never taught – only an antiquated version was instructed. This can be traced back to the fact that the school just didn’t want to pay up for the newer software and the higher salary that comes with better educated instructors. Also, as someone who worked in Career Services, I can also attest that there are just not enough jobs out there to place students as there were promises by the recruiters to get jobs once they were done paying thousands of dollars for an education. We even had some students that had mental issues, as in talking to themselves and being violent towards other students, who obviously would not be able to function in the real world.
    Also – not only did recruiters get money per student enrolled, but Career Services was paid based on how many students could be placed in jobs – that meant if someone that had just graduated in Fine Arts had to be placed in Ace Hardware, just to have the “placement”, so be it. The excuse was, “well they’re working with art related items”.

  • Ct Nelson

    I wonder if they have a photo class called “Introduction to the Cell Phone Camera and it’s Filters 101″