US Gov Sues The Art Institutes for $11 Billion Fraud

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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.

via PetaPixel.

There Are 45 Comments On This Article.

  1. Sometimes people just love photography for the process of making photographs. Why does making money have to be an a part of the process? Most of the time when you try to make money doing something you love it changes what you fell in love with.

    • Don’t know about this case, but the problem with Brooks a little while back was they were outright promising prospective students how much they would make as a commercial photographer. Very predatory.

      • Brooks was great when I was there in the late 1990s. It’s a shame to hear about how things have changed. I don’t know what’s rumor and what’s fact, but I know it doesn’t seem to be the same school it was a decade ago.

        • Brooks is, sadly, a sham now. There are too many horror stories from students. I got accepted there and eventually felt like I was being sold a used car by a man in cheap polyester suit. Sad to see a school with such a great past end up like that.

    • Nowhere does the process of photography involve getting sucked dry by Goldman Sachs and tossed into the gutter with 1000 other broke, starving and unprepared photographers, where you’ll be forced to take any and every job just to pay back student loans that can’t ever be expunged, ever.

    • I couldn’t agree more. The more money I make off photography, the less creative I feel I’m being. I’m trying to figure out how to get back the feeling I had in college, of just taking photos for the sake of it.

      • @ Jeff Yeah I heard about that and that is totally wrong.
        @ Ash. I am getting back to that place as well. I think having creative outlets like facebook and a blog help. They are great places to show the kind of work you like to produce with out confusing clients about your commercial style. Its a process. Try to embrace it.

      • Oh please. When is any job in the arts guaranteed, or any salary within an art form? If you want to make money, you go to school for a realistic job with realistic expectations with optimal potential for exponential income, you don’t go to school for photography. And if you’re dumb enough to believe an arts school when they tell you you’ll definitely have a great and financially rewarding career in the arts, you should go back to watching marathons of Glee and sucking your thumb.

        • @Countervail – EDMC preys on people with low income, with little knowledge of how college works and often kids that are the first in their family to go to college. So they are “dumb enough” to listen to recruiters who promise them salary figures and tales about there being a wealth of job opportunities.

          Just because you had people watching out for you doesn’t mean you can write off people that don’t have anyone watching out for them as dumb. Ignorant maybe but not stupid. I entered AI Pittsburgh only two years after the school went public (in 98) at that time things were changing drastically but they were still well respected and viewed as a technical college that taught technical skills and graduated craftsmen, not unlike schools that teach auto-mechanics and electricians.

          By the time I graduated in 2001 they were no longer a trade school like they had been for nearly 80 years, they were beginning to marketing the schools as “art schools” who make “artists” and not a technical school that graduated skilled tradespersons.

          By 2006 they were attractive enough that Goldman Sachs bought 40% of the company and accelerated the brands decline. Goldman Sachs sold lifelong securities investors on junk mortgages, people that are highly skilled and know how to see a bum deal. If they can swindle huge well educated clients with products like Timberwolf why would you insist on believing the mostly under educated, low income, first in their families to attend college students are stupid and not that they were taken in by the same slick profiteers that caused the mortgage collapse and made a killing off of doing so?

          Goldman Sachs is determined to do to education what they did to mortgages and their ability to do so has zero to do with the intelligence or sophistication of their victims.

          • Don, that seems like a cop-out. As Ann Landers used to say, “Nobody can take advantage of you without your permission.” I don’t dismiss that the recruiters for AI might be pushing the hard sell, but at the same time they’re recruiting people that desperately want to believe they will be a success without having worked very hard or achieved much in life to begin with. It’s sort of like the culture that believes all you have to do is be on a reality show or have a hit record or anything that doesn’t take that much intelligence or work and you can suddenly be a millionaire. Your analogy to the housing market is very apt. People who had no business taking out the loans they did, who were not in a solid position to really afford the mortgages they received, did so anyway guessing that magic or something would take care of the rest. Yes, the banks should not have been allowed to give those loans in the first place, and I will agree that government should not be funding educations that have little possibility of success, but we should also not be encouraging wishing as a path to financial stability. You belittle the people you defend by justifying arguments of ignorance as the reason for choosing an art school as a viable choice for a stable future. If you have little to begin with, you do not invest that into unstable possibilities. If you’re the first of your family to go to college and have little resources, how does going to art school sound like a serious and thoughtful way to improve your circumstances? Frankly if you go to art school, why should you have any expectation of financial stability at all?

            • Should these kids think that going to an “art school” will lead to financial success? Hell no but this is why this law suit exists to STOP the recruiters from being paid to recruit kids by telling them all of these lies.

              It’s a systemic problem that comes also from societal pressures to go to college. High Schools that have high college enrollments among their graduates make the school system look better to parents that might move to a district. Parents want to see their kids do better than they did. The president is telling people to go to college. With all of that pressure to go to college it’s very easy for the wrong people to come along and push you into going to the wrong school.

              How often do you see state schools or community college advertise? Not nearly as often as you see the girl in her PJ’s telling you to take a test paid for by these schools that will tell you to go to these schools. Not nearly as often as you see AI ads that talk about how great their careers are. Like it or not advertising DOES influence people to do things even when those things are clearly stupid and the people clearly know better (see: tobacco).

              I know people that work/have worked in these recruiting jobs and one person that used to be involved with EDMC’s compliance with Federal recruitment regulations.

              The sales people are told to think about numbers. They see these folks as numbers, not people. They are paid based on enrollment which pushes them to do everything in their power to get their numbers up. Even if that means telling bold faced lies.

              The compliance dept. employee who is still with them but in another position told me this past Friday how the sales people were constantly bringing said person cases where they openly admitted to promising the world, to telling outright lies, and they wanted to know if they could go even further. This person would stop them from admitting people that couldn’t read or write. Said person did so on countless occasions but others in that dept wouldn’t stop them according to the person I spoke with.

              They were running people through their internal testing as many as 10 times before giving up on enrolling that person – these were test designed to weed people out as ineligible for enrollment after one time through. That sounds just about as close to the way they calculated AAA ratings on products like Timberline as you can get.

              Should people believe they can go to art school and make it big? No they shouldn’t so why would you question a lawsuit that is intended to help keep more of them them from thinking that?

              • I’m not disagreeing that the lawsuit shouldn’t go through. But’s it’s simply a case of misleading advertising, not the war on class you pose. It’s always easiest to take advantage of the distressed, poor and uninformed. But isn’t the best way to fix that healing, funding and educating? If someone’s fat, putting on a new dress does not make them thinner or more healthy. This lawsuit is a sequined party dress in a size XXXL. While it may help to some people from being taken advantage of, it doesn’t stop people from being ignorant in general. Stop encouraging a wishful thinking culture. Start being more realistic and quit living in fantasyland. Make people consider the tough choices that will really change their lives. There are resources out there, low cost resources. Ever heard of a library? Ever take on an unpaid internship? And when did expensive equipment trump artistic purpose? I think you’re looking to give people a guarantee in life. If someone isn’t willing to go and learn on their own, why should they be rewarded for being ignorant and making dumb choices? We live in a competitive world with finite resources. And the people who were suckered into a piss-poor education at AI I think got exactly what they sought. Grow up, get smart, move on.

  2. About goddamn time. The schools get 90% of their revenue from government financial aid to students. 90%!!!!! It doesn’t matter what subject the Art Institutes teach – it is purely a ploy to use their students as financial instruments in order to extract money from the government. Money that the government is on the hook for after the students can’t pay it.

    If the Art Institues offered their own financial aid, they would have been bankrupt long ago.

    • You are 1000% right!

      The real problem is government financing for education. It has created an environment where a school exists in every city and everybody gets an education until the whole system becomes worthless.

      It’s also dumbed down the programs because the easier they are to pass the more money the schools receive in financial aid.

  3. Shhhhhhhhh!!!

    Tons of information out there on the subject of ROI on Private Collages and an what a BFA, MFA can get you. Guess what…in some departments the enrollment is up. Default on student loan debt all time high. It’s clearly up to the individual to do the research on their chosen field. There will always be someone to sell you a bridge.

    • Unfortunately private for-profits like AI and other chain institutions market themselves to students who might be the first to attend college in their families. Might even be the first to have a real loan to their name – and little knowledge of what that entails. Without a knowledgeable family member to watch out for them, the financial aid predators swoop in on the 18 year old…

      • Shhhhhhhhh!!!

        I hear you but even the one off private colleges have similar issues. Tons of photogs being churned with student loan debt and I don’t need to tell you the chances of them making a living long term in this field. These smaller schools may not be as predatory but they don’t deliver a clear picture of what’s ahead post college. I did think that a law was being implemented that will now force Private Colleges to inform potential students on their ROI. We’ll see how that pans out. I still think we have so much information out there to research this stuff on our own. Even at 18 and 1st generation in college…

  4. So the lawsuit, contrary to this report, is actually about recruiting process and processing unqualified students to receive government money for a for-profit education company. No local economy can guarantee a career in an area where someone wants to work, and schools can only help prepare a student for the possibility, not the guarantee. If these schools are taking on unqualified students, then the issue is having the government subsidize those individuals and the schools processing these students. But how do quantify qualifications within the arts? A good portfolio? And if you already have and use that talent, why are you going to school in the first place? This sounds like a group of individuals bitter about not being able to make a living in the program they studied because they were unrealistic and uninterested in knowing the truth about working in media arts, or the job market in general. Does the Art Institutes need to have disclaimer that says “you’ll probably not be able to get a job in this field when you graduate, but you’re such a schlub going here in the first place pretty much anything you try will be unsuccessful anyway?” True, government funds should be used for more statistically proven job tracks. But a university can never really guarantee a job in anything. And are you really advocating for even less public funding going toward art education (even if it’s going into the private hands of a corporation)?

    • What we’re advocating for is more rigorous standards. I attended a public university where 95% of the kids who didn’t wash out of the program and actually got our little pieces of paper, still couldn’t use the RZ or the light kit the department had available for us to borrow. We weren’t even prepped to be assistants. We were pretty great at writing artist statements that amounted to a 5 paragraph excuse as to why our pictures weren’t up to par tho. I’ve seen the admission standards of the art dept of my alma mater get even more loose and diploma-millish.

    • I think it is very important that you pointed out the lawsuit is directed at the recruitment process. I am currently a student at Ai Pittsburgh although I am majoring in Game Design, not photography. I personally did not experience the high-pressure recruitment. Additionally, I had very high grades in high school, worked very hard, and was accepted to several “big name” schools but none offered the program that I really wanted to persue. I wouldn’t consider myself one of the “prey”. I didn’t start college in earnest until age 24 because traditional colleges just didn’t appeal to me. I did tons of research before I decided on Ai. Is it expensive? Sure. Show me a private art school that isn’t :) I’m lucky enough to only have federal loans. Also, as Guard member, I use my GI Bill. The military has a very specific list of where members can use that money and “diploma mills” don’t qualify. Regardless of what is said, it all comes down to what students are willing to put into their education. I don’t expect the school to find me a job when I graduate. Anyone who does is ridiculous. I also know that I am going to have to do extra work on my own to stand out among job applicants. I personally feel that I am gaining a very strong education in my particular field – I’m already working with a great team on developing a game – and my instructors have been excellent. I feel that my job prospects are completely my own responsiblity and due to my particular learning style, I feel that I am getting a lot more out of the instruction I’m currently receiving than I ever did from my previous “traditional” college. Oh and interestingly enough, in the Game Design program students DO have to sign a waiver stating we understand that due to the current nature of the gaming industry (i.e. the fact that 90% of the jobs – and there a LOT of them right now – are located in very specific areas of the U.S. or are overseas) we will likely have to relocate to find a job, which really is true. I of course can’t speak for Photography students, but students in my program know full well what they are getting themselves into from the beginning. Lastly, the gaming industry is currently the 2nd fastest growing industry in the U.S….does that mean that because my job track is statistically proven that its okay for my program to be government funded? I think so :) The sad fact is that not enough mainstream schools are embracing programs like game design, web design or multimedia arts so where are students like us SUPPOSED to go? You make some very good points that I agree with Countervail, just be careful about depicting ALL Ai students as lazy, weakminded prey :)

      • You’re absolutely right in pointing that out. I’m sure a lot of good careers for smart people get started at AI. That’s why it’s frustrating for people on this thread to try to make the conversation so black and white. AI=greedy corrupt bad guy and students=doe-eyed innocent prey.

    • Nope, just that they need to post a sign up on the lines of “If you have artistic talent, run right in, but if you DON’T, go somewhere else!”

  5. The added problem to all of this is that none of the schools offer a business class to these students. They should have a class on “representation – the business of photography”. It is a crime that most schools and workshops never give true, hardcore advice to photographers on how to and where to sell their work. When I do photography /portfolio reviews around the country with photographers young and seasoned it stuns me how little information these folks have about marketing. Absolutely crazy. Plus, the overall void of “practical wisdom” given to photographers is outrageous. Every photographer attending a school, workshop, lecture should ask for or demand a working agent to be part of the curriculum. Yes, photographers must have a vision and a voice – how about venue that can create revenue ?!

    • Shhhhhhhhh!!!

      Even Medical schools often don’t offer small business classes. We live in a figure it out yourself society. I completely agree it should be a required addition to any field of study that would require running a small business/practice. It’s not the case more often than not. Now that the bubble has burst and we’re living in a different time perhaps more institutions will begin to implement. There surely is a pump of this information thru the media as money/debt is the topic of the decade. There are nuances to the Photography business that you’d want someone from that background teaching “the business” and many Professional Photographers and Reps/Agents don’t always have the best business heads so perhaps there’s a shortage of people to teach the subject.

  6. We offer a class in Business at Austin Community College and have for 35 years. And if you call me an ask about jobs I will tell you that there are not any. If your goal is to be a professional photographer then you better be prepared to be self-employed and willing to work 60 hour weeks to build a business. I cringe when my students take out student loans and we have community college prices. It amazes me with the number of schools that do not teach/offer their students what it will take to compete in the real world and I’m not just talking about photography.

  7. They should sue ACCD Pasadena, i’m 200,000 in debt and make $12 an hour! They problem is i never had any overhead to get me going after school, it was all for school to get me through. And it’s been just trying to pay the bills since i graduated, with a few highs and lots of lows. It’s been 6 years.

    • Donnor Party

      I have no idea. Get a degree in something that requires effort and thought from a real school, buy some gear, go to museums, and take pictures. Try to assist in a big city. Seperate photography from your ego and identity. The lack of seperation is the reason why people have $200k in debt from going to a photo school.

  8. First why go to a private school to get an education in art, communication, at a school like AI. What’s wrong with state 2 & 4 year colleges and universities. My son went to the U of A got a Bachelors in finance and is a now working as a IT system analyst. The degree cost around 40k another 15k for the masters. 200K for a degree, something is wrong!

    Who out there is mentoring someone on the art and business of photography? You pay your assistants but what are they really being taught, especially if they aspire to one day hang their own shingle. I think the older generation needs to open the doors to real education. People like Rob who have been at the receiving end should be mentoring too. Wait I think he is trying to do that here. Ultimately the suit is just another indicator of the depth of greed that exists and is a part of the decline of our country morally and economically.

    • Exactly. I went to Brooks in Santa Barbara for Visual Journalism and Photography about 12 years ago. I actually work locally for one of the better video job companies around and run my own editing company, but I am the exception and it took me 10 years after school to get here. I run into countless former students working in every field other than photography or journalism. Kids are coming out of school weight equivalence of a mortgage and they’re just starting there career/life.

      Art schools are awesome fun if you can afford it. And I mean you are wealthy enough to where you don’t need a career and you can enjoy the process….and there is NOTHING wrong with that. I personally don’t belong to that class and I certainly had no business going to that school. I loved it, but I could not afford it. I had to submit a portfolio and go through a review to get in…I know now they would have taken me no matter what. Yes, its my fault for believing the recruiters, but one thing they were right about was the talent of the instructors, at least back then. It was a terrific school. If I were rich I’d go back and have some fun.

      Education is important, but this country proves time and time again that we just don’t value education. I have a philosophy degree and work as a journalist and director; I love it, but the degree and the brooks education did not get me that job. With art, I recommend the kids find someone they admire who is doing what they want to do, latch onto them and learn more in 2-weeks with that person, than a year or two in art school.

      I wish all of them the best of luck, because I still remember what is was like not to have any money, no safety net via parents or others, and looking at everything with dream-filled eyes. I wish I could still look at everything that way.

  9. $200k for an art degree. If you put that in Apple stock 10 years ago on your first day at school, you would have millions of dollars to retire on. Knowledge is important, degrees are questionable. School of hard knocks has made more working photographers than actual institutions. Degrees are vital to highly technical and medical fields but almost worthless in too many other areas of interest.

    • I have a science degree. Perhaps hilariously, when clients find out I didn’t go to school for photography, they are amazed. He must be some kind of genius!

      If only…

      • Similar here. I have a Bachelors in Chemistry, worked as an organic chemist, and went nutty from the mundane work in a lab setting, taught myself photography and business, still going 13 years later. Clients always act different to me when they know all that, as if photographers aren’t supposed to be smart. But I will admit, I am in search of another business to have. Don’t want to work for anyone, just want to have my own thing, but photography is starting to run its course with me. Hell I even bought Rob’s web folio package and have yet to get it going after 9 months.

        • Absolutely, I always recommend to my assistants not to put all their eggs in one basket. Save up those pennies and look for other opportunities in very different areas, preferably with more passive income. One of my mentors was a great photographer with a good business, but had other things going. Slow months didn’t seem so bad when the other businesses are generating income.

          And it’s not like you can sell the photography business to someone else when you are the brand… there’s no equity to grow. But, the freedom is fun.

  10. I went to a community college and graduated with a degree in photographic imagine technology.

    First: School is what you put into it. I did very well, But I also busted a** outside of it. Got my own assisting gigs, shooting gigs, shot for myself. I failed a lot but… I learned an awful lot. I would imagine if I just did the bare essentials I would of been less successful than I was/am.

    Second: I was required to take a business course. It was a photography business course. It helped but what we really needed to take was a full on year of business courses. One is not enough.

    Third: At first I planned on transferring to a 4 year school and obtaining a BA in journalism. Which I eventually turned down. If I would of went I would be in the hole 40,000 x 2/3 years. Just a estimation off the top of my head. Much bigger than the 7,000 I owe for 2 years at a community college. I probably could of learned everything that I learned in college on my own. It for sure sped up the learning curve. But for the most part, I learned most of what I know now buy trial and error. The internet, assisting, talked to people and just getting out there and doing it. Not from listening to a lecture with 20 other students. But not everyone is as proactive I suppose. Lot’s of people are spoon fed.

    There is only two people that I know of that kept assisting under a commercial photographer. A couple more that are on their own, weddings and also trying to make it on their own as commercial photographers. The rest went on for BAs or Masters. Some got jobs in other areas. My class was small too. Something like 20-30 people, if I remember right. Some took the classes to make a career out of it, some were soccer moms, and some were retires that need something to do.

    I think college in general needs to be rethought. Gone are the days that you can just have a AS or BA and get a job. The market is saturated with graduates. BA is more or less just an extension of high school. You now have to have a masters. True or is supported by facts, I personally don’t know. But it sure feels like it’s happening this way. Sure there are areas that haven’t progressed the same way. But more or less if everyone has one, it becomes less valuable.

    I guess that you have to have a realistic outlook going into the field that you choose. I knew this, most of my classmates also knew this. But there are some that think just because I went to college and got a degree, I should be handed a large starting wage and a corner office above all the non-college educated people. Which is surely not entirely the case.

  11. EDMC is to education as Timberwolf was to mortgage backed securities.

    Goldman Sachs is determined to do to education what they did to mortgages and their ability to do so has zero to do with the intelligence or sophistication of their victims but has everything to do with a-moral greed and a drive to manufacture phantom wealth at the expense of the American people.

    • Donnor Party

      Exactly. The issue is that the market failed. It happens. The market rewards these business models that rely on the ignorance, foolishness, naivety, mass psyschological dysfunction people rather than a rational actor’s considered decision. Examples: “Buy a Home! The American Dream! Be an artist! You want t go to college, right? Everyone’s doing it.” In essence what the banks have done is sell a sales pitch, rather than sell a product, with a pitch. Because few in this country are taught to think criticaly, clearly, or with rigor, the banks get away with it, abetted by the GOP.

  12. Wow. Lots of activity on this topic. Yeah EDMC seems like a photographer mill.
    I remember asking one of the heads at Art Center in the late 90’s (when the market was still VERY competitive, but another world compared to today) just how many photography graduates went on to successful careers. His response, “half our students drop out within two years. Of those that graduate, over 80% will not become commercial photographers”.

    Here’s what happened with Brooks Institute:

    http://ddunleavy.typepad.com/the_big_picture/2005/07/investigation_c.html

    • I know several people that graduated from Brooks in the past few years and have $240,000 in student loans. They start working as an assistant and realize they could have had a much better education by being a photo assistant in LA for 2 years than going to school for 4 years. I recommend skipping Brooks, Art Center, etc and work as an assistant. It is like a paid apprenticeship. If you want a college degree you should go to a cheaper college and get a degree. Photography schools should focus on the business side of photography. Teach how to do estimates, get jobs, pay your bills, etc. Photography is 80% who you know. If kids want to be great photographers, they need to build relationships with potential clients, refine their composition and people skills. If you are an assistant and get to work with top photographers, you can build relationships with stylists, hair and makeup people, etc that will help you build a great portfolio.
      I know people that were bartenders and doormen at bars 4 years ago. They started assisting and now are friends with alot of people in the industry, are very experienced at lighting and what it takes to put a shoot together, and have a decent portfolio. They are years ahead of the majority of people that spend $240,000 at Brooks for 4 years, and they have no debt!

      • Imagine what a quarter mil invested in many other businesses could produce.

        The problem with photography schools teaching business is the giant white elephant in the room: ROI (return on investment) and opportunity costs. When comparing these considerations to other professions, the strongest argument for becoming a photographer is not primarily business oriented, but something hobbyist embody (passion), and that is not often sound business.

        People skills and relationships are good, but of the few that do very well some have horrible people skills. Many get by on name or ‘brand’ in common vernacular.

      • Donnor Party

        This is how we all did it back in the day, for me the late 80’s and early 90’s. I started shooting for wire services in DC, then magazine gigs in DC, then moved to NYC and started assisting, then started shooting. The people I met in those early days in NYC, not just on set but in bars on the LES and East Village, launched my career. The junior copywriters and designers I used to hang with at CB”s and Mars Bar? They all became art directors at agencies and magazines. The funny wierd dude in the corner with the glasses? Terry Richardson before he was T-Bone. No Art Trade School could have given me that experience. By the way, I went to school, have a degree in insternational relations and history. Educatrion is important. Cooling your heels at a trade school so you can have a sense of identity is a waste of money, effort and time.

  13. Townsend Harris

    “People who had no business taking out the loans they did, who were not in a solid position to really afford the mortgages they received, did so anyway guessing that magic or something would take care of the rest.”
    Ahem. Not quite. There was no magical thinking going on. The purpose of any speculative bubble is to “sell into the rise,” to find that “greater fool”. Poor people behaved *rationally* when purchasing and mortgaging property with little money down using no verification loans. For them, lots of upside while the bubble continued, minimum skin in the game when it finally cratered. Come to think of it, that was the strategy of the lenders who immediately resold the loans from their portfolios. That was the strategy of the financiers who “securitized” the loans with irrelevant historic data about the quality of their product. I urge anyone conducting economic analysis to follow the money, especially the bigger pots of gold. Otherwise, Countervail made lots of good points.