The Art Institutes
| Company type | Private, for-profit (formerly) |
|---|---|
| Industry | Education |
| Predecessor | The Art Institute of Pittsburgh (est. 1921) |
| Founded | 1969 |
| Fate | Closed all campuses on September 30, 2023 |
Area served | United States |
Key people | Todd S. Nelson (former chairman of EDMC), John Mazzoni (former president), Charles Restivo (interim president) |
| Owner | Education Management Corporation (until 2017), Dream Center Foundation (2017–2019), Education Principle Foundation (2019–2023) |
Number of employees | Not specified |
| Parent | Education Management Corporation (until 2017), Dream Center Education Holdings (2017–2019), Education Principle Foundation (2019–2023) |
The Art Institutes (AI) constituted a private, profit-driven network of art education institutions across the United States.
Their academic offerings included certificate programs as well as associate's, bachelor's, and master's degrees. By 2012, AI operated approximately 50 campuses serving nearly 80,000 students. Originally owned by Education Management Corporation (EDMC), the network was acquired in 2017 by the Dream Center Foundation, a Pentecostal organization based in Los Angeles. Between 2019 and 2023, ownership shifted to the Education Principle Foundation (previously known as Colbeck Foundation), a nonprofit entity that also managed South University. In 2022, South University separated from both this foundation and AI.
The Art Institutes encountered significant accreditation difficulties and legal controversies, with numerous student loan borrowers seeking federal debt forgiveness through defense to repayment claims alleging fraudulent practices. The advocacy group "I Am Ai" supported former students in their efforts to obtain debt relief.
On September 30, 2023, all remaining Art Institute campuses ceased operations abruptly, providing fewer than seven days’ notice to roughly 1,700 enrolled students.
Founding and Expansion (1969–2010)
The origins of The Art Institutes trace back to 1969 when Education Management Corporation (EDMC) purchased The Art Institute of Pittsburgh, an institution established in 1921. Beginning in 2000, The Art Institutes introduced Art Institute Online, delivering bachelor's degrees in graphic design alongside certificates in digital web design. At that time, seventeen campuses offered on-site bachelor's degree programs, accounting for about 30% of total enrollment. Growth occurred through acquiring existing art schools and launching new locations. By 2001, the system encompassed around 20 campuses; this number rose to nearly 30 by 2006 when EDMC was acquired by investment firms Goldman Sachs, Providence Equity Partners, and Leeds Equity Partners. EDMC went public in 2009 and managed fifty Art Institutes by 2012.
Controversy, Decline, and Shutdown (2011–2023)
In 2011, Frontline aired Educating Sergeant Pantzke, featuring Iraq war veteran Chris Pantzke who criticized inadequate disability support services and questioned the educational value of his degree while expressing concerns over GI Bill fund utilization.
By 2012, enrollment at The Art Institutes had dropped by approximately 20%, largely due to restricted access to Parent Loans and an economic downturn. In response, EDMC implemented a tuition freeze lasting three years through 2015. President John Mazzoni resigned in June 2013 after a tenure of 27 years; Charles Restivo assumed the role of interim president. By 2014, multiple campuses including The Art Institute of Pittsburgh were subjected to heightened cash monitoring by the U.S. Department of Education due to financial instability.
A 2014 investigation led by the City Attorney of San Francisco resulted in a $4.4 million settlement addressing deceptive marketing tactics that misrepresented program expenses and employment outcomes to students. In May 2015, EDMC announced the closure of fifteen Art Institute campuses impacting over 5,400 students; affected locations included Atlanta, New York City, Ohio, Texas, and Pennsylvania. Further campus shutdowns and enrollment halts continued into 2016 with a total of nineteen closures accompanied by substantial workforce reductions.
Chief Operating Officer Tim Moscato stepped down in June 2016 amid ongoing institutional contraction. The U.S. Department of Education revoked accreditation authority from ACICS—the accrediting body for many Art Institutes locations. By mid-2016, twelve campuses were under heightened cash monitoring; by December that year nine additional campuses—including those in Atlanta and Houston—were placed on probation by their accreditor Southern Association of Colleges and Schools (SACS).
In January 2018, several Art Institute campuses lost accreditation from the Higher Learning Commission but delayed informing students about these changes. Following acquisition by Dream Center Education Holdings (DCEH), further closures ensued with twenty-three campuses shuttered by December 2018. Early in 2019, AI-Seattle’s license was suspended pending financial restructuring; AI Las Vegas also faced accreditation issues.
Reports surfaced in 2019 indicating that $9–13 million in federal student aid funds were unaccounted for at DCEH-managed schools. The federal monitor overseeing these operations warned against Studio Enterprise’s extraction of fees without providing corresponding services, thereby depleting essential resources. A federal court intervened to prevent closure plans for The Art Institute of Pittsburgh in March 2019; despite this ruling, staff experienced unpaid final wages as financial distress persisted across remaining campuses.
In 2022, The Art Institutes were included among 153 institutions involved in a class action settlement concerning student loan cancellation due to alleged fraudulent conduct involving significant wrongdoing. The Supreme Court permitted the $6 billion debt cancellation settlement to proceed in April 2023.
By September 2023, all remaining Art Institute schools declared closure effective September 30. Subsequently on May 1, 2024, President Joe Biden authorized cancellation of $6.1 billion in federal student loans for approximately 317,000 former students; the Department of Education will notify eligible borrowers and issue refunds for prior payments made.
Schools and programs
The Art Institutes provided a range of degree options including associate, bachelor's, and master's degrees, as well as diploma programs without degree conferral. Academic disciplines covered graphic design, media arts and animation, culinary arts, photography, digital filmmaking, interior design, audio production, fashion design, game art and design, baking and pastry arts, and fashion marketing.
Ownership changes
Education Management Corporation (EDMC), once the parent organization of The Art Institutes, was based in Pittsburgh, Pennsylvania. EDMC went public with its initial public offering in 2009. Todd S. Nelson, who had previously served as CEO of Apollo Education Group, joined EDMC’s board in 2007 and assumed the role of chairman in 2012.
By November 2014, due to financial struggles, legal challenges, and investigations, EDMC was removed from NASDAQ trading; its stock value had fallen below one cent per share.
In 2017, The Dream Center Foundation—a Pentecostal group headquartered in Los Angeles—purchased The Art Institutes; the transaction was finalized in October of that year. However, the Middle States Association declined to approve the transfer of the Pittsburgh and Philadelphia campuses to Dream Center.
In January 2019, Randall Barton, chairman of Dream Center Education Holdings (DCEH), announced that most campuses of The Art Institutes—except those located in Pittsburgh and Las Vegas as well as Argosy University—were handed over to the Education Principle Foundation with support from the U.S. Department of Education. Inside Higher Ed characterized Education Principle Foundation as a Delaware-based nonprofit connected to private equity firm Colbeck Capital Management; Studio Enterprise, affiliated with Colbeck, also played a role in this ownership transition.
Students affected by closures of Art Institute locations were redirected to DCEH’s partner schools such as DeVry University, Walden University, and Trident University.
According to Republic Report, court-appointed receiver Studio Enterprise & South University had until April 11, 2019, to finalize negotiations for separating South University campuses and remaining Art Institute locations from Dream Center’s IT infrastructure by September 11, 2019. Failure to do so threatened the reorganization plan and risked ceasing operations for both entities.
Locations that closed on September 30, 2023
- Art Institute of Atlanta (586 enrolled students)
- Art Institute of Virginia Beach (122 enrolled students)
- Art Institute of Houston (386 enrolled students)
- Art Institute of Austin (130 enrolled students)
- Art Institute of San Antonio (249 enrolled students)
- Miami International University of Art & Design (934 enrolled students)
- Art Institute of Dallas (331 enrolled students)
- Art Institute of Tampa (211 enrolled students)
Litigation
Between 2000 and 2018, EDMC—the parent company behind The Art Institutes—was subject to numerous lawsuits initiated by former students, faculty members, and government bodies. Thousands of ex-students accused the institution of deceptive recruitment tactics and submitted claims with the US Department of Education. Students attending The Art Institutes were eligible to submit borrower defense claims through the Department.
In October 2000, EDMC reached a settlement concerning a lawsuit filed by approximately 350 former students from The Art Institute of Houston.
From 2011 through 2015, EDMC faced investigations and legal action from the United States Department of Justice over unlawful recruitment practices and allegations involving $11 billion in federal and state financial aid fraud. A Department of Justice report from 2011 criticized EDMC’s aggressive sales-driven approach focused primarily on enrollment numbers.
In May 2013, a federal judge permitted a lawsuit filed by former admissions director Jason Sobek to move forward; Sobek claimed that EDMC manipulated compliance data to increase earnings from federal financial aid programs.
In November 2015, EDMC agreed to a $95.5 million settlement resolving accusations related to illegal recruiting and consumer fraud.
In April 2016, two former instructors at The Art Institutes filed suit against EDMC over unpaid wages and insufficient rest breaks intended to maximize profits. Later that year, student activists associated with "I Am Ai" announced plans for litigation concerning campus closures and educational quality issues. The Massachusetts Attorney General expressed concerns about unlicensed instruction at the New England Institute of Art (NEIA), warning that failure to meet standards might lead to closure. In December 2016, nine campuses within The Art Institutes system were placed on probation by their accrediting agency, Southern Association of Colleges and Schools (SACS).
On July 6, 2017, two former students initiated a lawsuit against Secretary of Education Betsy DeVos for postponing borrower protection regulations. This legal action contributed toward enforcing the Borrower Defense Rule established in 2016.
In 2018, Dream Center Education Holdings acquired the remaining 31 Art Institutes campuses. In December that year, students filed suit alleging that Dream Center failed to inform them about accreditation losses at four campuses located in Illinois.
Student outcomes
Data from the College Scorecard reveals that the Art Institute of Atlanta had a graduation rate of 20 percent. The median student loan debt varied by program, with Culinary Arts graduates averaging $16,500 and those in AV Communication Technologies reaching $42,549. Median salaries after completing studies ranged between $19,000 for BFA holders and $35,000 for graduates with a BS in Computer Software. Notably, only 9 percent of borrowers showed progress in repaying their student loans two years after beginning repayment.
Notable alumni
The Art Institute of California – San Francisco
- Simone Fattal, visual artist
The Art Institute of Fort Lauderdale
- Serena Williams, former professional tennis athlete
The Art Institute of Houston
- Scott Cawthon, developer of the Five Nights at Freddy's game series
The Art Institute of Philadelphia
- Zerina Akers, stylist and costume designer in fashion
- Kyle A. Carrozza, animator
- Dave Hoover (1955–2011), comic book artist and animator
- Isis King, model, actress, and fashion designer
- Jacob Kulick, music recording artist
- Stephen Powers, mural artist
The Art Institute of Phoenix
- Bill Hader, actor and comedian
- Brother Luck, culinary chef
- Vertexguy, video game composer and artist
Alumni from multiple Art Institutes locations
- Ernesto Padilla, graphic designer and cigar manufacturer
External links
- Official website
- Frontline: "Educating Sergeant Pantze"