Struggling Art Institute grads eligible for refunds

Students who graduated from the Art Institute of California between 2009 and 2012 and struggled to find a job in the field they studied could be eligible for compensation, according to San Francisco City Attorney Dennis Herrera.

Herrera today launched an outreach program to identify former Art Institute students eligible for compensation under the terms of a settlement reached with the for-profit university last June.

Eligible students who received bachelor’s degrees will receive refunds of around $4,000, while those who received associate’s degrees will get around $2,000. They must enroll in the reimbursement program by June 30 to qualify, however.

The settlement reached with Educational Management Corporation, the Art Institute’s Pittsburgh-based parent company, required the company to pay the city $1.95 million to settle allegations that it underestimated program costs for students and inflated job placement figures for graduates.

In addition to partial compensation for students who struggled to find the jobs they trained for, the company agreed to endow a $1.6 million scholarship fund for non-graduating students who wish to return to their studies and $850,000 in general scholarships for students. It began offering the scholarships for returning students several months ago, and is working on implementing the other scholarship fund, city officials said.

The company also agreed to change its marketing and reporting practices to avoid misleading students in the future.

A number of private, for-profit universities have come under fire in recent years for allegedly inflated employment figures, deceptive financial aid programs that understate the amount of debt students will be taking on and aggressive marketing practices.

Corinthian Colleges, one of the largest for-profit post-secondary education companies in the United States, closed its remaining facilities, including several Heald College campuses in the Bay Area, this spring. The closure came after the U.S. Department of Education restricted its access to federal student aid dollars in 2014 and then fined it $30 million in April for misleading students about job placement opportunities and loan repayment rates.

Herrera said in a statement Wednesday:

“For-profit colleges have come under fire for deceptive marketing, and when we found evidence of actionable practices victimizing San Franciscans, we moved aggressively to right the wrong,”

However, despite the dispute, Herrera praised Education Management Corporation for its willingness to work with the city to resolve complaints:

“They showed a commendable willingness to address concerns about their current and former students, and to improve their practices so they avoid problems like this moving forward.”

Education Management Corporation earlier this month announced it would close 15 campuses nationwide including the Sunnyvale campus of the Art Institute after evaluating market demand and student outcomes, among other factors. Company spokesman Chris Hardman said that while the Sunnyvale school is not accepting new enrollments the approximately 350 students there now would be encouraged to complete their degrees, a process expected to take two to three years.

The company remains committed to the San Francisco campus, which was founded 1939, and other Art Institutes, Hardman said.

Hardman said in a statement:

“At the Art Institute locations in California, student achievement is our top priority, and we are committed to constant improvement. …┬áIt was important for us to cooperate with the City Attorney for the City of San Francisco throughout this review and bring the matter to a final resolution.”

The City Attorney’s Office will be mailing letters out to those identified as potential beneficiaries of the settlement, but anyone who does not receive a letter can also apply online or call or email for more information. Application forms and answers to frequently asked questions can be found at sfcityattorney.org/aicasf. Potential beneficiaries can also call (415) 355-3268 or email aicasf.refund@sfgov.org.