Wednesday, July 17, 2013

US Gov Sues The Art Institutes for $11 Billion Fraud

David Walker at pdn writes "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.
Bittel says EDMC had plans last summer to increase its photography student enrollment by adding a 12-15 month diploma to the program. The new degree was intended to attract students who wanted a “quick fix” in the form of a degree they could earn faster than an associate’s degree with minimal effort, Bittel says. “If the bachelors students can’t find jobs, where are the students with [12-month diplomas] going to go?”

Goldman Sachs owns 40 percent of Education Management. Goldman Sachs makes student loans and buys and sells securities that — shades of the mortgage bubble bursting — are made up of student loans.   

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