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Graduation Success Rates
According to the Student-Rights-to-Know Act, any school receiving Title IV funding from the US Government is required to calculate the number of actual students who graduate with a degree and disclose this information to current and perspective students. A sample of students fallowed from 2004 to 2010, revealed 320 out of 1021 students completed graduation. This gives The Art Institute of Orange County a success rate of 31 percent.

Fraud Investigation
The parent company Education Management Corporation (EDMC) and all the Art Institutes system is currently being investigated and by the US Department of Justice for wide spread fraud. A lawsuit was filed against EDMC on August 8, 2011.

Fraud Investigation by the US Department of Justice
The lawsuit alleges The Art Institute illegally targeted low-income and foreign students who qualify for government loans which generates almost 90 percent percent of the schools profits. Recruiters were paid to enrolled as many students as possible during a regular marketing event to students for what was called Open House. The US Department of Justice alleges the company instructed recruiters to use high-pressure sales techniques like playing on an applicant's psychological vulnerabilities and inflating claims of career placement opportunities to enroll students regardless of their qualifications. This info is provided from Department of Justice Press Release.

The US Government Files Lawsuit Against The Art Institute and parent company EDMC
April 2011 The Art Institute and it's parent company Education Management Corporation or EDMC was investigated and sued by the United States Department of Justice and four states including California for illegal and fraudulent practices of $11 billion in federal and state financial aid money. A Press Release was issued by the Department of Justice on August 8, 2011 describing the allegations of violating the False Claims Act.

California Files Lawsuit Against The Art Institute and parent company EDMC
The State of California filed a Notice of Intervention against The Art Institute's parent company EDMC on and joined the federal lawsuit according to California Watch

The lawsuit alleges The Art Institute illegally targeted low-income and foreign students who qualify for government loans which generates 2.2 Billion or 89.3 percent of The Art Institute's net revenue in 2010. Recruiters were illegally paid $800 for each student that enrolled during their frequent marketing events called Open House. The Justice Dept. Lawsuit alleges the students were left with rudimentary art school education which led to low employment, while selling the students into financial slavery and record high default rates.

Predatory Lending
A second pending whistle-blower lawsuit against EDMC has also been filed by The Justice Department alleging the school used every incentive to maximize enrollment by recruiting unqualified students who will not be able to repay their loans. The suit alleges recruiters were trained to mislead students about the types of jobs they could expect to get after graduation.

Exploitation of Veterans Benefits
The HELP Committee, led by Sen. Tom Harkin has been holding hearings with EDMC and other for-profit schools for targeting veterans returning from service with aggressive and sometimes fraudulent recruiting tactics. The GI Bill dose not count against the law prohibiting the school funding not to exceed 90 percent of it's income from federal loans. As a result, military money going to for-profit schools spiked dramatically. At EDMC, funding from the Department of Defense and Veterans Administration climbed from $2.04 million in fiscal 2009 to $52.4 million in fiscal 2010 and noted in a Frontline Investigation

Complaints
A lawsuit filed in Texas state court by 145 students alleges they were misled about the accreditation status of their program, diminishing their degrees’ value and leaving them with debts they can’t repay. The case was settled for an undisclosed amount.

A former graduate Carrianne Howard went public about her degree in a Bloomberg Article alleging it was worthless and turned to stripping just to pay off her student loan. Instructors at the Art Institute of Seattle raised questions about EDMC when they tried to join the American Federation of Teachers. The attempt to unionize lost in a 48 to 64 vote. Instructors objected to high-pressure marketing to students to take out loans they couldn’t afford and felt like the quality of education was suffering, that because the emphasis on getting as many students as possible was the main goal.

Financial Trouble
The Art Institute is also struggle financially. According to Project Censored.org EDMC has a debt and leverage rate of $1.496.1 million or close to $1.5 billion dollars. Yet the company refuses to post any letter of credit as required by the government.