Art Institutes’ owner faces suit
Students say nonprofit defrauded them after schools lost accreditation
Four Art Institute students in Chicago have filed a lawsuit against Dream Center Education Holdings, claiming the nonprofit committed fraud by failing to notify students it had lost institutional accreditation at four Art Institute campuses in January.
Dream Center — which agreed to purchase most of the Art Institute college chain from Pittsburgh-based Education Management Corp. in March 2017 — was notified on Jan. 20 that accreditation was temporarily removed from four Art Institute campuses while the sale was under review.
Those schools were The Art Institute of Illinois in Chicago and Schaumberg, Ill.; the Art Institute of Michigan in Novi, Mich.; and Art Institute of Colorado in Denver.
A Chicago-based regional accreditation agency, the Higher Learning Commission, instructed Dream Center to publicly post the new accreditation status and notify students of the removal.
The commission also required school management to accommodate students “in light of this action, which may include, if necessary, assisting students with financial accommodations or transfer arrangements, if requested.”
But Dream Center continued to state in its course catalog that the schools “remain accredited” and left many students, faculty and staff at those schools in the dark. In July, Dream Center announced those four schools would be among 18 Art Institute campuses to close by the end of the year.
According to the lawsuit, filed on Thursday in Circuit Court of Cook County, the students learned of the accreditation loss in June when they started the summer quarter.
After that, the suit contends, school management continued to make false and misleading statements, including that the schools were likely to win back accreditation.
At a meeting in November, the Higher Learning Commission upheld its earlier decision, declining to reinstate accreditation for those who had already graduated in 2018.
An official for Dream Center did not respond to a request for comment.
Accreditation — higher education’s way of enforcing quality control measures — is coveted by schools as a stamp of approval. Committees at the six major accreditation agencies occasionally drop in on college campuses to review finances, academics, policies and other measures to ensure schools are meeting minimum standards.
Accreditation is typically a requirement to receive federal student loan money. Some employers expect a job candidate to have an accredited degree, while others — particularly those who have graduated from the affected Art Institutes in 2018 — are more lenient.
The lawsuit comes as the Middle States Commission on Higher Education, a Philadelphia-based regional accreditation agency, considers whether to remove accreditation from the Art Institute of Pittsburgh. Last month, Middle States gave the Strip District campus until March 2019 to comply with its rules.
The Art Institute of Michigan in Novi, Mich., announced in July it would shutter by the end of the year. The school, which opened in 2008, has taught hundreds of students from suburban Detroit in the fields of creative studies, including animation, culinary arts, fashion design and photography.