Sheepskins and False Hopes: Financial Fraud Alleged Against the Academy of Art University

 

images-4Can anyone really make a career as a professional artist?  According to the folks at the Academy of Art University, that is the “revolutionary principle” that has taken enrollment through the roof from 2,200 to 16,000, while bringing in hundreds of millions of dollars in annual revenues from starry-eyed art students subsidized by federal loans.

And when I say “through the roof,” I mean literally.  The people who control the Academy are amongst the largest real estate owners in San Francisco with more than 40 properties, second only to the Catholic church.  The real estate is estimated by some to have a net value of over $400 million and generate ten of millions of dollars each year in rents from the university.

If you have a high school diploma and can scrape up the money to pay $20,000 annually to the Academy, they will gladly sign you up, no art experience required.  But don’t count on that diploma just yet.

As reported by Forbes magazine, only 32% of full-time students graduate in six years, versus 59% for colleges nationally (approx. 90% of students from selective art schools like the Rhode Island School of Design and Parsons).  For the 2013-14 academic year, 55% of the school’s roughly 10,700 undergraduates had federal student loans totaling $45 million.

So, even though the Academy’s website touts its students’ success at finding jobs with Pixar, Apple, and Electronic Arts, the odds are more likely that you will end up with no degree and a mountain of debt rather than graduating and finding employment in a related field

The Academy’s dismal graduation rates have recently drawn unwanted scrutiny.  The school is fighting a whistle-blower suit by former recruiters who claim they were illegally paid more if they enrolled more students.  And to make matters worse, the eligibility of some Academy programs for federal aid has been in jeopardy after tough new regulations governing for-profit colleges went into effect last year.

As the romantic illusion of being a starving artist fades, it is important to remember that the Department of Education has indicated it will consider erasing the federal debt of students who can prove a school used illegal or deceptive tactics in violation of state law to persuade them to borrow money for college.  If such tactics can be proven true, many for-profit university students, or their parents, who have taken out student loans could get debt relief if they can show they have been defrauded.

 

 

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