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The Art Institute’s name has been drug through the dirt in recent years for its deceptive recruiting tactics which targeted students by promising as much as 95 percent job placement in higher paid positions. The Art Institute’s claims led thousands of students into enrollment with this for-profit school with a 4-year overall tuition of $96,000 or more. Students of this scam had every right to expect stellar level service, quality education and high job placement rates with a program charging that much for an associates or bachelor’s degree in art but once you remove the photo-shopping effects from this rosy picture, all you’re left with is thousands of students who were forced to drop out of the program and thousands more unable to find jobs in their field.
Federal investigators and Attorneys General of 12 states have turned their attention to The Art Institutes parent company, Education Management Corp.(EMC). These government bodies became aware of the scam when they noticed that over 62 percent of students enrolled in 2008 and 2009 had withdrawn from the program. This meant that 62 percent of these students would not be working in their field and able to pay back their loans taken out for The Art Institute’s programs. Combine that with the number of students who took private student loans to pay for their tuition and you have thousands of students buried in student loan debt they are in default or are struggling to pay.
The Art Institute paid its recruiters bonuses or other incentives based on the number of students they would successfully enroll in their programs and claims indicated that they had two sets of job placement statistics. One set of statistics were for accreditation boards and were a more realistic portray of job placement while the other was seriously inflated to lure students with their fraudulent recruitment practices. Potential students asking about the cost of the programs were often given evasive answers and there was no real disclosure about the total cost of their education. Former students subjected to this scam stated that they were put in high sales pressure positions which left them with debt they often didn’t even know they were incurring until it was too late.
Former employees participating in federal lawsuits against The Art Institute and its parent company claim that recruiters fraudulently, intentionally, and frequently misled potential students in order to financially gain from their successful enrollment through company incentive programs. In August, 2011, the US Department of Justice launched a massive lawsuit against the school’s parent company, EMC, which claims that it has collected over $11 billion from students using the federal student assistance loan programs.
Several students claim that applications that turned out to be student financial aid documents were presented to them for signing as student grant applications without their knowledge. In addition to signing up for loans they didn’t know about, students also didn’t know that many of the jobs in the placement statistics were for portrait studios at places like Walmart where no degree or certificate is necessary. For those who managed to figure out they were being scammed and tried to transfer out to a legitimate program, they soon found that their expensively acquired credits were non-transferable.
Due to settlements reached with The Art Institute’s parent company and San Fransisco, this for-profit school has tightened its practices for recruiting of students and has created various scholarships for roughly $44 million. The US Government’s recent crack down on for-profit schools and the attention from investigating government bodies has meant that this school has cleaned up its act to a certain degree but remains open for business. Students left unemployed and left holding the bag for thousands in federal or private student loans are left hoping for mass lawsuits they can join, settlements on existing lawsuits, but otherwise have been forced to work lower paid jobs in their field or unrelated fields to try to make ends meet.
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If you feel you were defrauded by the school you attended or you are being treated poorly as a distressed borrower by your creditors, take the free challenge debt review to find out what options you have regarding your student loans.