The Fall of A Major Institution: The Art Institute From The Eyes of The Students

A New Beginning Ruined

We walked along the maze of Seattle’s bustling city streets, trying to find our way around the construction detours, down to the street that housed the Art Institute of Seattle. We stopped in front of the building to take it in and then walked through the revolving door and up the stairs. My girlfriend Brandie Lane asked the security guard where we would find financial services and we were pointed to a desk further down the hallway straight ahead. The receptionist in the next department pointed us further down a long hallway.

“Do you know who you need to talk to?” I asked. We walked aimlessly until we found a door that had the title “financial services” and waited outside for the meeting that was ensuing inside to finish. “I guess we can wait here,” Brandie said. A taller man with a beard came out and said, “are you guys looking to talk to financial services? We can go into my office.” He led us a bit further down into the faculty department and into his office and then shut the door. “So what can I help you with?” he asked. “Yea, um…so I was attending the Art Institute of Phoenix before they closed and transferred to the Art Institute of Seattle, doing online classes, and the courses that were available to me online ran out. I was wondering what my schedule looked like next quarter?”  Brandie asked. The guy looked a bit surprised. “Let me just check here,” he said, typing on his computer. “I’m not seeing you here…you aren’t an active student here at Seattle…” he trailed off. “What, why would that be?!” Brandie said. “It’s likely because you haven’t officially started here at Seattle and we currently aren’t accepting transfer students or new enrollments,” he said a little confused about all of this. There apparently was an email sent out that Brandie hadn’t received since she hadn’t officially started on the Seattle campus. Our hearts sank…we had seen this all before.

“We need you to be honest. We intend on moving here in less than 3 weeks to attend this school. Do you recommend we follow through?” Brandie asked. He looked at us and said “No…I don’t think you should.” We immediately asked to get our official transcripts and my degree, which I never received from the Art Institute of Phoenix, and were taken the the registrar. The unsure Financial Services employee helped as much as he could but there wasn’t much he could do. The Art Institute of Seattle abruptly closed 9 days later on March 8th leaving students and faculty stunned and unsure of what to do about their futures.

Not even 3 months prior in December of 2018 the Art Institute of Phoenix had officially closed. In 2017 the Education Management Corporation had sold off the Art Institute franchise in a $60 million deal, along with all of their Argosy and Southern University locations, in a last ditch effort to save the company from bankruptcy after lawsuits tore through the remnants. By the end of 2016 even EDMC’s legal counsel was consumed by the lawsuits. A company that seemed to be in free fall was purchased after long deals and assurance of accreditation and stability of the brand by the Dream Center Education Holdings. A deeper dive revealed that the Education Management Corporation had been on a steep decline since around 2009 with decreasing enrollment and lawsuit after lawsuit brought on by whistleblowers, former students, and even state and federal government agencies accusing the corporation of defrauding the Department of Education and its students by taking federal student aid money to pay their faculty, deliberately misclassified data to inflate job placement rates of graduates, G.I. bill scams, and in November of 2015 Education Management Corporation announced a $95.5 million settlement after it was exposed that a high pressure sales operation was happening to get new enrollments. This excerpt is taken directly from the New York State Attorney General’s website

“The settlement resolves a complaint, filed today in New York County Supreme Court, in which Attorney General Schneiderman alleges that EDMC violated state consumer protection laws by:

(a) using deceptive and misleading student solicitations touting educational benefits that were available to too few EDMC students;

(b) targeting prospective students for high pressure recruitment, including many students EDMC knew or reasonably should have known would not likely benefit from an education at its educational institutions;

(c) inaccurately claiming that certain of their programs were accredited by a programmatic accreditor necessary for a student to obtain licensure in their profession;

(d) misrepresenting job placement rates and graduation rates for students. With regard to job placement, EDMC misrepresented graduates who worked only temporarily as having been “employed,” based, for example, on a single day of work. EDMC also misrepresented graduates as having been “placed in field” although the employment in question was at below that of the graduates’ fields of study, such as a graduate with an Accounting diploma counted as “placed in field” based on employment as a cashier at a fast food restaurant.”

What is surprising is this wasn’t stopped much sooner. Almost a year after the deal made with EDMC and the Dream Center Education Holdings to purchase all of the Art Institute locations the new owner of the franchise began to cease enrollment of 31 locations across the country in July of 2018. Since 2015 to now 50+ Art Institutes have shut down displacing the hundreds of thousands of people who attended these schools and took federal student aid or private loans. This included the Phoenix Art Institute location Brandie Lane was attending at the time and where I personally graduated from in 2016 right before all of this began, or what I thought before I really began looking into the previous lawsuits. Right after Dream Center Education Holdings announced the ceasing of enrollment Education Management Corporation filed for chapter 7 bankruptcy.

Statement from DCEH pulled from Pittsburgh Post-Gazette on the ceasing of enrollment of 31 locations:

“While we actively work with our accreditors and regulators to assess the viability of our current offerings at these locations, DCEH remains steadfast in our mission to provide students with accessible, affordable, relevant, and purposeful education aligned with market demands,” the company said in its statement.

The Phoenix Art Institute Closes

When the Dream Center Education Holdings bought the Art Institute franchise it seemed like whatever issues the company may have had would be resolved. It wasn’t clear to the students that anything was going on until some programs began to lose accreditation. Students were advised that they may not get the credit they initially would have unless they switched programs until the Dream Center stepped in and seemingly resolved this issue. But in July of 2018 the Art Institute of Phoenix announced it would cease enrolling students and a month later announced in an email to students that they would be closing in December of 2018.

Statement from AZ Central:

“This decision was made for a number of reasons, including a shift in the demand for online programs in higher education and in student populations at the campuses, which have resulted in declining, unsustainable enrollment levels for campus-based programs in these markets,” Dream Center said.

They promised a teach out program, ensuring that students who could graduate before December  would be able to, but it very quickly turned into students scrambling to figure out their next move. An email was sent out to students giving them various options on what to do including: transferring to one of the companies other institutes owned by DCEH, including Argosy University and Southern University, and by doing so could get 50% off their remaining tuition. Students could also choose an institution outside of the company and get $5000 in tuition assistance. The school was never clear on when they would officially be closing and students and faculty were left in the dark. This was happening simultaneously at multiple other Art Institute locations.

What Do We Do Now?

Brandie and I had spent the past 6-8 months planning for a move to Seattle, after we found out about the closure of Phoenix, and it was all ripped away from us in a day. The President of The Art Institutes had even emailed students on October 31st of 2018 saying the Art Institute of Seattle would not close.

Claude Brown, President of Art Institutes
Email depicting assurance that the Art Institute of Seattle was not shutting down

We felt so sure we would be moving there for Brandie to start in the spring quarter in April. As we stepped out into the brisk air of Seattle in front of the Art Institute of Seattle, Brandie started to cry. I was so angry…what were we going to do?

We were relying on tuition money to help us move to this city. What was Brandie going to do? She had already been put through this once, but now twice? How was any of this right? And how was I going to get my degree if these institutions were being purged in large numbers? We had so many questions and soon it became very clear we were not the only ones. She called her mom and told her the news and cried again. We went back to our Air BnB and reevaluated our lives. I immediately began compiling all of my emails with the Art Institute of Phoenix and Seattle and started researching what was going on and why the Dream Center Education Holdings was shutting everything down.

I was also directed to a Facebook group started by students and faculty affected by the sudden closures called ‘I Am AI’. The group has been a gold mine of student and faculty stories, internal documents sent to students and staff, and a place for people affected to organize and get political and judicial institutions involved. Brandie and I started seeing students talking about how they were now homeless because their tuition was paying for student housing, students talking about being $200k in debt, former students paying monthly payments anywhere from $400-$1800, and faculty members releasing documents telling them they no longer have a job and might not get paid.

A lot of people were now uncertain about what they should do or how they are going to live. It’s a very bleak picture.

The Dream Center Education Holdings

After I had returned from Seattle my uncle sent me an article that was released that day, March 4th 2019. The headline read ‘Argosy University took students’ financial aid cash by altering documents, court documents says’. The article detailed allegations of Argosy and the Dream Center Education Holdings altering submissions to the Department of Education to reflect that student stipends had been paid when they had not. The company was illegally using student money to pay their faculty which allegedly defrauded the federal government millions of dollars in financial aid. They then voided their bookkeeping entries. The result was $13 million in funds that Argosy students did not receive. I was stunned. The Department of Education revealed that as much as $15 million had been released to Argosy that was unaccounted for, even after the company had been put on Heightened Cash Monitoring 1 and 2.

How was all of this happening all while we were attending the same building that housed Argosy at the Art Institute of Phoenix? Was the Art Institute doing the same thing? It isn’t clear but what was clear was whatever is happening is still unfolding. I began to do a deep dive into DCEH’s wikipedia page and reading about their history and lawsuits and EDMC’s wikipedia page to see what I could find. It was certainly a lot more than I anticipated. There was actually so much that I think you would be better off looking through the list of accusations and lawsuits to get a better grasp on the gravity, but I’ve tried to highlight some of the most damaging above.

In January of 2019 DCEH went into receivership. The court appointed receiver was criticized by student groups for not doing enough to protect the tens of thousands of students who attended Dream Center campuses. In March the US DOJ joined the anti-receivership side by asking a federal judge to move the college chain into bankruptcy court.

Why do I care?

I graduated from the Art Institute in December of 2016 and had my official graduation ceremony on March 23rd of 2017, the day before my 22nd birthday. I never received my diploma and as things started to get strange I also tried to get my official transcripts but I never received those either.

I have direct emails sent to Gil the Dean of Academic Affairs at the Art Institute of Phoenix and Cynthia the Registrar of Phoenix, referred to me after my visit at the Art Institute of Seattle, attempting to retrieve my degree.

 

I’ve even talked to enrollment services at both Phoenix and Seattle. I’ve received nothing.

I felt like the career services only contacted me to cover their asses after I graduated because they would occasionally call me to see how the job hunt was going but didn’t really help more than that, even after going in to talk to some of them. There seems to be validity to my feeling about this as claims emerge about the school network lying about job placement going back to before I personally attended and the fact that they have already been sued for doing this once before.

I’m concerned about the promised alumni network and career services that may be nonexistent after the dust settles on this mess. I no longer have the luxury of talking to former teachers or academic affairs employees from my original school.

I’m still paying thousands of dollars on loans from a school that doesn’t exist anymore for a degree I have no proof of having and never officially received.

I’m doing this because people need to know about this. People deserve to see the corruption that private institutions like the Art Institute, Argosy, and Southern University reap, and even non-profits like DCEH, who lie and continue the tactics of the companies like EDMC. People shouldn’t have to suffer like Brandie or myself; or the tens of thousands of other people who paid for a failed education and now have to deal with the fallout of major corporations who broke the law.

I don’t care what comes from this as long as somebody hears my story. It’s not just my story though. This is the story of everybody who attended the Art Institute. As it stands today, as of April 2019, there are 8 locations left but who knows what will happen as this continues.

 

 

 

If you want to learn more, here are all of the sources I have used. There is much more to this story so enjoy the deep dive.

Source List/Personal Timeline:

Art Institute Case

—- Education Management Corporation history

https://en.m.wikipedia.org/wiki/Education_Management_Corporation

     The Art Institutes (sold in 2017 to Dream Center Education Holdings (DCEH), LLC)

    – In October 2015, EDMC reported a student enrollment of 91,000,[4] a 43% drop from its peak enrollment of 158,300 in 2011.

    – EDMC has a reported 109 locations, but more than 40 Brown Mackie Colleges and Art Institutes schools are in the process of closing.

     – From June 2013 to June 2014, the company eliminated about 2,600 positions, and campuses have been closed or are in the process of closing.

—Tyler Beck begins attending Art Institute September 2015-December 2016 (Graduation ceremony March 23rd 2017), takes out private parent plus loan through financial services, ensured job placement help and viability of degree by enrollment services, assured alumni network and assured skill set to become graphic designer by faculty and academic advisors

—November 16th 2015

For-profit college will pay $95.5 million to settle ‘boiler room’ recruiting case

https://www.latimes.com/business/la-fi-for-profit-college-settlement-20151116-story.html

—November 2015 NY Court Case:

https://ag.ny.gov/press-release/ag-schneiderman-announces-1028-million-settlement-edmc-forgive-student-loans-and

“The settlement resolves a complaint, filed today in New York County Supreme Court, in which Attorney General Schneiderman alleges that EDMC violated state consumer protection laws by:  (a) using deceptive and misleading student solicitations touting educational benefits that were available to too few EDMC students; (b) targeting prospective students for high pressure recruitment, including many students EDMC knew or reasonably should have known would not likely benefit from an education at its educational institutions; (c) inaccurately claiming that certain of their programs were accredited by a programmatic accreditor necessary for a student to obtain licensure in their profession; and (d) misrepresenting job placement rates and graduation rates for students. With regard to job placement, EDMC misrepresented graduates who worked only temporarily as having been “employed,” based, for example, on a single day of work. EDMC also misrepresented graduates as having been “placed in field” although the employment in question was at below that of the graduates’ fields of study, such as a graduate with an Accounting diploma counted as “placed in field” based on employment as a cashier at a fast food restaurant.”

—After 4 months of job searching (Nov 2016-Feb 21st 2017) find a job indirectly related to graphic design as a print operator. No serious help from career services other than occasional phone calls to see about job search.

—March 23rd 2017

No degree after Tyler Beck’s ceremony, told it would be mailed

—Tyler Beck contacted by somebody from Art Institute over phone about degree, told degree was mailed to previous address, gives current address, still no degree received

—May 16th 2017

Email to Bruce Curtis of Art Institute of Phoenix

—June 2017

Goes to Art Institute to see about receiving completed degree on 2 separate occasions, talking to career services

Uses enrollment meeting with India Greene as way to talk to somebody, still no degree

     -Decides against re-enrollment

—-July 2nd 2018

Dream Center Education Holdings halts enrollment of numerous school locations. Education Management Corporation files for bankruptcy.

https://www.post-gazette.com/business/career-workplace/2018/07/02/Dream-Center-halts-enrollment-at-a-number-of-schools-but-not-Art-Institute-of-Pittsburgh-EDMC/stories/201807020118

—-July 20th 2018

Students left in limbo after company that operates The Art Institute closes Phoenix campus

— July 21st 2018

Phoenix announces closing

https://www.azcentral.com/story/news/local/arizona-education/2018/08/21/art-institute-phoenix-close-december-email-students-says/1048104002/

—-Tyler Beck begins Enrollment process at AI Seattle Oct 2018-Jan 2019 with sales calls from Anna Sealey, campus site tour, admissions paperwork of enrollment and talks with Yanmei Shi of financial services

—October 11th 2018

Emails Gil Meja, dean of affairs, to receive degree and transcripts

—October 12th 2018

Fills out transcript request sent by Gil to send to Seattle

—-Transcripts sent to Seattle

—December 2018

Art Institute of Phoenix closes

—December 2018

4 students sue Dream Center over accreditation issues of 4 Art Institute locations in January before DCEH buys AI in March. DCEH lies about accreditation.

https://www.educationdive.com/news/dream-center-sued-over-claims-it-misled-students-on-art-institutes-accredit/544059/

—December 2018

Tyler Beck stops following up with financial services at Seattle after feeling unsure about being quoted $70k in student loans for Bachelors in Audio Engineering degree and viability of franchise amidst closures

—January 2019

What happens when AZ Private Colleges Close? – https://www.google.com/amp/s/amp.azcentral.com/amp/2427509002

—-January 16th 2019

Facing Insolvency Dream Center Unloading Art Institutes

https://www.educationdive.com/news/facing-insolvency-dream-center-is-unloading-art-institutes/546114/

—-January 23rd 2019

Buying Art Institutes brings Dream Center to brink of Collapse

https://www.educationdive.com/news/how-buying-the-art-institutes-brought-dream-center-to-the-brink-of-collapse/546627/

—-January 24th 2019

Concerns of transparency over shift in ownership of EMC to DCEH, transition if for profit institute to non-profit institute, and closures of other locations associated to companies involved in deals

https://www.insidehighered.com/news/2019/01/24/private-investment-firm-behind-acquisition-art-institutes-and-south-university

— Feb 26-March 1, Goes to Seattle to see why Brandie Lane’s online courses have stopped and what her Spring Quarter would look like after she transferred to Art Institute of Seattle

(online until April 1st when we could physically move to Seattle)

—Feb 27th 2019

Finds out Seattle is potentially closing from questionable behavior by DCEH that resulted in loss of ownership and told to look into WSAC, that the school might close directly from financial services and gets help attempting to get transcripts and Tyler Beck’s degree by Financial Aid at AI Seattle

—-March 4th 2019

Emails Cynthia, Registrar of Phoenix for Degree

—March 4th 2019

Argosy, Art Institute of Phoenix, and Dream Center Education Holdings stole student money to pay faculty – https://www.azcentral.com/story/news/local/arizona-education/2019/03/04/argosy-university-took-students-financial-aid-altered-documents-filing-claims-dream-center-holdings/3060458002/

—March 6th 2019

https://studentaid.ed.gov/sa/about/announcements/dream-center

—March 7th

New York Times covers the story

https://www.nytimes.com/2019/03/07/business/argosy-college-art-insititutes-south-university.html

     – Republic Report; a group throughly covering DCEH and the events:

https://www.republicreport.org/2019/devos-backed-deal-would-allow-secretive-non-profit-to-enrich-related-for-profit/

— Seattle Closes March 8th 2019

—Solutions for Seattle students: https://www.sbctc.edu/becoming-a-student/ai-to-ctc.aspx?utm_source=google&utm_medium=search_mobile&utm_campaign=art&utm_content=here_to_help&gclid=EAIaIQobChMIq9O_n9H_4AIVrSCtBh0yGQoOEAAYAyAAEgKlwfD_BwE

—Department of Education site for loan withdrawal or school closure

https://studentaid.ed.gov/sa/about/announcements/closed-school

—-March 12th 2019

Dream Center Will Stay in Receivership for now but is attempting to file for bankruptcy

https://www.chronicle.com/article/Dream-Center-Will-Stay-in/245869

—March 13th 2019. Still no degree, alumni network seems nonexistent as more locations shut down, career services for graduates is nonexistent, previous school is closed

     – lawsuits, fraud, illegal and manipulative sales tactics, $8 to $13 million missing, law suit after law suit

Source: https://en.m.wikipedia.org/wiki/The_Art_Institute

     -Eliminating student loans:

https://www.forgetstudentloandebt.com/student-loan-relief-programs/federal-student-loan-relief/federal-forgiveness-programs/art-institute-student-loan-forgiveness/

     -Art Institute’s site regarding closed schools, transcript requests, degree requests, tax information, etc.

https://www.artinstitutes.edu/closed-school-information-page

[Links not sent to student network after closures; found doing research]

[Art Institute website includes Dream Center Education Holdings in descriptions]

—-Department of Education information on Dream Center schools closed, tuition reimbursement, denial of transference to non-profit, other resources

https://studentaid.ed.gov/sa/about/announcements/dream-center

Advertisements