Art students around the country are reeling in the face of recent news that their schools, part of the Art Institute system, will close by year’s end. Altogether, 18 schools are no longer accepting new students, including campuses in Chicago, Nashville, Philadelphia, and Detroit.
The parent nonprofit Dream Center Education Holdings, based in Los Angeles, cited declining enrollment as the reason for its decision. Dream Center purchased 31 Art Institute schools in early 2017 from Education Management Corp., a for-profit school operator in Pittsburgh, with the intention of converting all of the schools into nonprofits.
“After a complete and thorough examination of the three education systems in the [Dream Center] network to ensure they are meeting the needs of today’s learners, we did not see demand growth for courses at these campuses,” Anne Dean, a spokeswoman for Dream Center, told the . “This decision was made for a number of reasons, including a shift in the demand for online programs in higher education and in student populations at the campuses, which have resulted in declining, unsustainable enrollment levels for campus-based programs in these markets.”
Last month, Education Management filed for Chapter 7 bankruptcy in Delaware, claiming to have less than $50,000 in assets and between $500 million and $1 billion in debt. (Dream Center says there is no connection between the bankruptcy proceedings and the closures.) The former owners had previously been sued for consumer fraud in 2011, paying a $95.5 million settlement in 2015 and agreeing to forgive more than $102.8 million in debt from at least 80,000 former students.
In the face of the closures, students have several options. If they have enough credits, they can complete their degrees by the end of the year. They can also transfer to other Dream Center schools, which would almost certainly involve moving to another state. In both cases, tuition will be reduced by 50 percent. There is also the possibility to receive a $5,000 tuition grant to transfer to an unaffiliated “partner institution,” a list of which was not available by press time. For students that choose not to continue their education, Dream Center will offer loan forgiveness.
Further complicating matters is the schools’ own recent transitions to nonprofit status, still pending the approval of the US Department of Education. This has temporarily led to the loss of accreditation for some of the institutes. As of now, students cannot be sure that credits earned since January, when the transfer of assets from Education Management to Dream Center was completed, will be accepted at other institutions.
“I literally wasted money from January until now,” Mia Kimble, a student at the soon-to-shutter Illinois Institute of Art Chicago, told the . “I already spent $16,000 in credits that aren’t transferable. It’s a slap in the face. Who’s to say I will be accepted in any of these schools? It’s really discouraging.”
“A lot of people are going to have to start all over,” she added. “They were very unprofessional when it came to the information.”
As part of the move, Dream Center will also close additional campuses in the Argosy University and South University systems, also purchased this year from Education Management. (Since January, six of the Argosy schools have been folded into the Art Institute system; only two will continue operations into 2019.)
A statement on the Dream Center’s media contact page reads:
Dream Center Education Holdings is aware of multiple reports and speculation regarding the future of certain schools and campuses within The Art Institutes, Argosy University, and South University networks.
Since acquiring these schools in late 2017, we have been undergoing an ongoing process of evaluating the viability of certain campus-based programs relative to student needs and preferences in order to best support our students, both present and future. As a result of that examination, we have made the decision to discontinue campus-based programs for a number of schools within the Art Institutes, Argosy University, and South University systems. This decision will redirect prospective students to one of our other campuses or our online offerings. Current, active students should continue to attend class as scheduled. We will support current students by offering multiple options to continue their education.
Here is the full list of closing schools: