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

  • Guest

    I used to work at the Art Institute of Phoenix back from 09-11 and they changed the pay system so that we had goals to hit but our pay raise was based on a lot of things, not just enrollments. So if you did well in enrollments you also had to do well in calling people and Retaining them, and being on time to meetings, and a bunch of other crap that had nothing to do with the job but they put those rules in all for profit education 7 years ago so that you couldn’t take advantage of people. Now AI still screwed a lot of people and we enrolled people or we would lose our jobs but the good Admissions counselors would make sure that the students knew everything before starting.

  • Guest

    So AI has always been expensive but before Goldman and Sachs took over the $90 K degree was only $60 K. Still expensive but more competitive with University of Phoenix and the other for profit schools.

  • Guest

    A big problem is the government. Why did FAFSA allow AI to take out so much in loans? If you look at the tuition of almost all online schools they all try to stay right in the amount of loans and grants.

  • Tucson

    I was told that after every semester that my schooling would be cheaper. that id receive more scholarships. but then they also told me that they would help me find a job after i graduated. 80,000 dollars in debt plus what i still owe the school which is 9,000. i am far into a debt i didnt even know id have. if i knew this going in i would have went else were. and the financial aid office never cared to help. i thought that was their job.

  • priscilla

    That is why I left AI. I was almost in my second year and was still learning basics. I was so heart broken. Lost 2 years of my life. starting over at NOVA in a month.

  • David-SLC

    Photography can absorb tons of photographer jobs! Each one of those 600 people have family/friends/business owners who need photography services. They all uniquely know their own community and can service that base of customers. They’ll know tons of people that I’ll never know and vice versa. It’s absurd to make a blanket statement like that. Also, who says the degree is for being a professional anyhow? Who cares? If they meet the requirements for federal student loans then nothing else matters. Maybe the Fed needs to look at it’s own lax lending practices?

  • kittyparrish

    I’m one of these students. I work full time, and have an alright paying job, which I obtained with no help from the school. The jobs they send me past less than half what I’m receiving. I can’t afford loans and rent. I actually make more and am less well off than I was before I went to AI. I was in no way qualified to be in the program I was put in. The recruiter told my father and I almost nothing true. I’m technically a success story… But I can’t afford normal things. I didn’t learn what I was told I would be learning. I’ll be paying for this the rest of my life, I hope that recruiter did something amazing with their commission check.

  • kittyparrish

    Please let lawyers look into AiAustin’s first 3 years after opening… find some students whose lives are not ruined.

  • carlos

    The school falsely claims a high job placement rate. Their advertisements make it seem like there are tons of jobs in the field and that you’ll be able to pay off the debt afterwards.

  • alanna

    went to AI ft. lauderdale for fashion design- let me tell you what a JOKE that program was: we never learned to drape, pattern, or sketch properly. Although i came out of school and found a job (the economy was decent at the time), it certainly wasn’t what I wanted. Two years later I overhauled my portfolio (on my own) and applied to F.I.T. for fashion design, got accepted, moved to Italy and New York and let me tell you: THAT was a fashion education. I couldn’t believe the differences between the programs- it was utterly astounding. Not to mention, my tuition at F.I.T. (for 4 years since none of the AI credits transfer) was less than AI (2 years). I agree that education is what you make of it, but that “chain” school should really be shut down for ripping people off and providing nothing but broken dreams, endless bills, and a sub-par “education”.

  • Jose

    I completely agree with SavageHenry. I am a fresh student and just learned about everything that is “wrong” with AI and little on what is “right” about AI. I’ve done much research and heard a lot of negative comments made about this school, the online division as well, posted here as much as everywhere else. Even things I have noticed with there Mycampus as to the functionality and how uninvolved I feel the instructors are. Anytime I have an issue I am always referred to “tech support”. That to me sounds like a very uneducated instructor, especially if they work with this website on a daily basis.
    Also, I do believe many people have applied themselves and to make an accusation about other students “making bad life decisions” is pretty bold considering I doubt anyone knows what unsuccessful students had done with there time and effort, in reference to DoingFine’s comment. In any case, DoingFine’s example of a success story is only one person out of many bad success stories I have read. I came from a horrible upbringing myself with one abusive, alcoholic parent, my mother, and let me tell you, I know, with all these experiences, along with my own that I am just experiencing as just a 3 week student, I know when I am getting screwed. I now have the ambition to change my school thanks to the new insight.

  • Lu

    How can anyone even understand your ‘rant?’ You don’t need to be looking for a college to attend, you need to go back to junior high/middle school. Maybe there they can help you with something very important in life—grammar!

  • Lu

    University of Phoenix on your resume and you don’t get hired??? When I got my Bachelor’s from UOP I was promoted in my company to an $80,000 a year job. 2 years later I received another promotion.
    Not sure what companies you’re applying to….

    NO ONE should expect to graduate from any college and walk into a high paying job right off. Anyone who thinks that is too dumb to be in college in the first place. Hard work and a degree got me my promotion.
    If one college doesn’t work for you, fine, pick one that does and stop bashing others.

  • Lu

    Then why did you stay with the school in the first place? I don’t get someone who enrolls in a school, is not happy for whatever reason, then sticks it out to the end, only to bash it. ??
    People need to stop whining about “they told me this, they promised me that.” Grow up and take responsibility for your own actions. No one held a gun to your head and made you go to this school.

  • Lu

    Perhaps because it’s more difficult to become a doctor than it is an artist. ?? Being an artist usually requires a ‘natural skill’, where as being a doctor is something that needs to be ‘taught.’
    No one is born a natural surgeon.
    Just saying………

  • PJD

    Why does this NOT surprise me I wish I had found this out before I attended this school as far as I am concerned the school SUCKS leaving me owe 4,000$ for the negligence of the financial aid department. I had applied for my student loans in May and guess what its now November and NOTHING not one dime. They told me I turned my papers in late yet my loans were approved on August 15th. They NEVER return your phone calls EVER then had the balls to blame me in the end to cover their own asses.They knew 4 weeks prior they wanted my taxes done yet they were sent a letter from my accountant saying I filed an extension. They called me 2 days before they needed my taxes done or they were locking me out of school HOWEVER they next day I was locked out of my classes and the lady says how do you feel about making payments on 4,000$……..THIS MONEY HUNGRY SCHOOL SUCKS ALL THE WAY AROUND AND TAKES ADVANTAGE OF THE LOWER CLASS PEOPLE.

  • erin b. Washington

    im not shocked at all I regretted getting my culinary degree here, they filled me with alot of false hope and even more debt

  • disqus_Fnvhq4yng2

    I transfered from to the Art Institute from an accredited university back in 2010. I was young and naive and was absolutely manipulated into thinking this school was the solution to everything (I wasn’t confident with my major at my university like most young people). They brainwashed a 19 year old into thinking that if they graduated from this college they would get a job in there field, they would have someone helping them to find a job, the education would put you well above others, etc. Half way through the program I realized what a huge mistake it was, but it was too late. Both of my parents weren’t in the picture so I was eligible for ridiculous amounts of government students loans (which I was so poorly educated about until I GRADUATED, thanks financial officer)… which STILL didn’t cover the full tuition costs and they then encouraged me to take HUGE private loans out to cover the rest of the costs. They told me it would be simple and possible to make the type of money back to pay these loans. Then my senior year my financial aid ran out. No one told me that was possible, no one offered much help after that… Well except a loan that the school provides with HUGE interest rates for students in my “situation” who have no other option. I had to scramble to come up with the money to end my education with no help from anyone at the Art Institute, they didn’t care…they got all the money they could from me. NOW LET’S TALK ABOUT THE EDUCATION… I feel COMPLETELY ripped off. I once felt challenged, I went for a B.A. in Merchandising. I hear about the education people got with the same major at other universities and there is NO comparison. I felt like I spent 3 years in day care with teachers who barely know or care what they are talking about. I did graduate but I feel completely used, I have more debt then I know how to even handle and I’m learning more from a job I could have gotten without a degree then I did 3 years in that school.
    Now I’m left with HUGE government debt, HUGE private debt, and I even owe that sad excuse for a college money… barely able to scrap by all because I wanted a college degree and someone new just what to say to a young girl.
    I ENCOURAGE PARENTS AND STUDENTS to really educate yourself about The Art Institute and not listen to the lies they feed you at enrollment. Go to a University, get a real education at more then half the price.

  • disqus_KoJuVrhpnr

    Same. I went to an art school, and have done just fine. It’s not an issue of art schools, or art education, but rather a ‘for profit’ diploma mill situation. the article mentions that there are 600 current photography bfa’s set to graduate? my program accepted 12 / year. not 600. we all have jobs too.

  • ColdFusion

    Well that’s one down. I wonder if they’ll ever get to my school.
    At least I had no delusions about getting value, I thought of it as an expensive job-finding service, and sure enough I’ve never gotten so much as a callback from a job unless school arranged it.

  • BG

    Does this mean the loans I received to attend Ai of Tampa for a year and learn absolutely nothing will be null and void? It should be. The place is a joke.

  • MzDEMO

    It’s not just photographers and it’s not just graduates, it’s every major and people that stayed long enough but then came to a realization. I went to that school facing the same problem and I was in the animation program.

    Film students, Fashion, Interior Design, Game Art and Design, Video game programming, Animation, Graphic Design, and the list really does go on. All of these programs and more have been slammed with the same problem and feel helpless because it’s a large network of schools. No one really knows how to stand against Ai. Furthermore, most of these students move away to cities with artist to try to secure a job in their field of study with most to no avail. Ai just wants the credit if you land a job and the governments money.

    Most people know that when you go to school you pay a large sum over time back for all the services and fees, but in Ai many, many majors do not see that money get put into their major and are told to pump out work by industry standard using old software and equipment.

  • janedoe

    when you say:
    “Your art degree’s are crap degree’s” (And you spelled degree’s as a possessive for some reason, which is incorrect! Should be degrees –as in plural) what exactly are your referring to? Specific degree? Specific field of study? A specific school/college??

    Our alumni from a private non-profit university have BFA degrees in specific visual arts fields. Overall, they do very well. But we stress networking, alum contact, internships, co-op, participation with professional organization area chapters, and so forth. We have a great reputation, and successful graduates. So your broad statement is really inaccurate.

  • stormboulder

    Same here, I make 200k-300k now a year after bonuses at an Activision studio. I went to AIC-SF also. Like you said Its all what you make of it.

    Its all about passion not what school you go to or how updated the software is. Those are just small mundane skills, employers are more interested in talent.

  • zrrz

    I don’t get why this is an issue? Stop going into majors where you can’t make money. I am almost done with the Game Programming degree at AI-Los Angeles. It is a good program and I have already found work using the knowledge I’ve gained. Going after low income students to get financial aid is an issue though, not the oversaturation of industries and poor economy.

  • Shane Hunter

    I agree. I went to Miami International University of Art & Design (AI Miami) and we were taught to teach ourselves…! Wasted most of my G.I. Bill on a 90K B.A. I only got less and less motivated the more I went there. They even hired a teacher to teach a lighting class (3 years older than I was) that didn’t even use strobes in his own work! AI is a joke. I needed this article!

  • Twisted Sister

    I had a decent experience at the Ai of Miami. Not the best but most of my design teachers were very experienced and helpful. I also worked like crazy non stop for three years. I can’t speak for my peers’ experiences. Nevertheless, the school is too expensive given the mediocre curriculum. There are not enough design basics preparation and a lot of students who are accepted have no passion or lack of talent. The final projects or thesis are also a disaster. There is not enough time to prepare a legit project. But I come from a country where schools used to have great teachers and poor resources therefore I was able to make the most of the school but some of my peers didn’t do this because they are not used to make the most of narrow circumstances.

    All in all, the owners of the schools are money hungry people who are willing to take in anyone.

  • BryanS

    Arent the talking heads at Uncle Sam’s house the ones that keep preaching to go out and get a subsided loan and rack up the debt?

    How else are they going to keep their campaign donors (who own credit companies ) in business?

  • T.J. Diggs

    Private for-profit schools need regulation and they need it now. I am loaded down with over 60k in debt from a private school education. I didn’t know any better at the time – being young and foolish. If I had to do it all over, I would’ve chosen a public University. The skill level in most of those programs (i.e the diploma) could be earned as a two-year or certificate program from a community college. All for much less cost. If you want a career in graphics, web-design, photography, etc.. check out your local community college. You’ll get an education that’s as good or better and graduate debt free.

  • T.J. Diggs

    I wanted to say something like this but you nailed it! The issue is that if they only took the top 10-15% who actually had talent, their profit margin would drop drastically. Maybe only 20 kids out that 600 really had the ability to make a career in photography. When it comes to private vocational schools like this, there should be some type of regulation. Did AI possibly find a handful of talented photographers through their aggressive recruiting? I’m sure they did.. but was it worth being dishonest with the vast majority who are never going to make it?

  • Ai sucks

    This explains why everyone I graduated with owes Ai the same amount; for a loan we supposedly borrowed directly from the school? I’ve asked repeatedly to have proof of that and receive no reply… worst they call me daily harassing me to make higher payments (which I can’t) or they’ll send me to collection? On something I’m paying? I regret going to this school I always felt taken advantage of by financial aid personnel…

  • cyruse4

    I am an AI graduate also. I have been working since graduation. I’ve worked for Marvel, Disney, WMS and a few other big companies. I also became a Dean at another college. You get out of it what you put in to it. If you didnt have talent, why did YOU decide to stay/go? Did you think it was magic? I get that AI took advantage of the system, but show me the school that doesn’t. I’ll be here all week…

  • Yep

    Not a Shrill or a troll. You should actually look at WETA’s roster and see if AI has grads there. And other companies. You will see that they do… But dont let facts get in the way of your complaining. Please, continue..

  • Steve Kenneth Soto

    anyone know of a class action suit by students against goldman sachs/ ai???

  • groundpound1340

    This isnt the only school doing this. ITt Tech also gets away with faking numbers concerning grads who do get into the job force. They charge for information you must learn yet some of the so called instructors are not even educated to be program chairs or instructors, yet they get paid for half ass telling you how to do something, and ignore you with you really do not know how to do it. AI actually had really good professors.

  • JeremiahrL

    Soooo.. If the Government is suing Ai for that much money…. Does that mean I have to pay the Gov. back for the loans I owe them for going there? I mean, they’re going to be getting paid. So, why should I have to pay?

  • flyersfan88

    What about the people who really thought it was a good idea to major in photography??? I mean, come on.

  • Matthew Daniel Watkins

    This same phenomenon is occurring with Emergency Medical Technicians (EMT) and Nurses, there now calling schools with these medical programs EMT mills, or nursing Mills. They produce so many poorly trained students that the job market cannot absorb them, and then the salaries of everyone else drops because the demand is the same for these workers but the supply mushrooms.

  • justhonest

    If your dumb enough to go to school to learn how to use a camera you should be in debt… lmao

  • Ashley Nicole

    They should contact those that were screwed over by the school I for one are one of those students. They took out a loan in my name that i was denied for 3 times was told i didnt have the money to continue to go to school and didnt qualify for financial aid according to their staff. Then after a year and a half of being gone i receive a call saying “hey you are past due on payments”. low and behold come to find out the school received money that i wasnt aware of . I could have finished my associates instead im $35000 in debt and nothing to show for it!!!

  • lundee85

    Why stop at AI? Virtually every other art school is just as responsible for farming graduates with astronomical debt, no prospects whatsoever and no way of ever paying that debt back.

    Hang em high.

  • lundee85

    Pshh, I get a room at my mom’s house for free, but still…I mean damn.

  • mochilover13

    I agree. I go to the Art Institute of CA Inland Empire and I have gotten a great education and some great mentors there. I have also been offered many cook/ chef positions and won a few competitions. I do agree though that they need a better way to see if a student is qualified to go there. The entrance test and exam was extremely easy. Sure they try to lure you in but no one forces the student to sign papers for a 100k education. The student is responsible for checking with financial aid to see where your money is going. With my experience the school has provided me with what i need to be successful. The student needs to ask questions and use all the resources they have. The school is what you make of it. Nothing is ever just handed to you. Sorry, but the real world is survival of the fittest.

  • Maive M Jackson

    As a recent grad, BFA-Grapic Design, I know first hand. I lucked out. I got placed in a good job. The problem is, the size of my loans and the size of my paycheck don’t match. Also, going out into the real world, there are so many skills that employers expect you to have that much are simply not equipped with. I won’t even go into the the alarming number of my peers who still can’t find jobs. The entire system is broken.

  • sugarlips

    This sounds like The Brooks Institute of Photography. Sounds like exactly what happened to me with Sallie Mae. Google ‘Bradshaw vs. Sallie Mae’…Mind blowing. Sallie Mae is doing the same thing in private institutes. The same thing they did to the housing market, well, the educational system is next to go KABOOM.

  • sugarlips

    The Brooks Institute of Photography did the same thing. Same exact thing.

  • truephoto

    They took 30,000 dollars from my g.I Bill then kicked me out of the photography program. They lie to new people coming in the doors and teach deceptive practices. I finally filed a complaint against a teacher for saying the problem with America was white Christian men, it went up to the Dean and by the next quarter my financial aid had been cancelled and I was sent home. Screw them.

  • Miki

    I went through the Art Institute of Washington’s Visual and Game Programming curriculum, and the only reason I have a job today is because I taught myself what my professor (who was amazing, by the way) simply was not allowed the time to teach.

  • Anibal Gonzalez

    I used to go to an AI for Chef school, low and behold I find out thru the grape vine a year after I left that the top Exec Chef was pocketing funds and using it for his own benefit. I am in a better place and will be getting my degree in Technical Management. My classes at AI after all didn’t go in vain but its sad to hear stuff like this happening to ones that want to further themselves in life.

  • Amberlyn Borden

    Ai. in philadephia was only worried about money i went there for a year and had to leave because financial aid didn’t help my find a loan. with out telling me they were charging me month to month and didnt even tell me my loan expired. they automatically said that i agreed to payments. now i am 27,000 in debt and the credits didnt even transfer to a different school i had to start over in alot of dept.