July 2, 2018
The new owner of 31 Art Institute schools across the country has ceased enrollment at a number of locations, although the Art Institute of Pittsburgh continues to accept students, a spokeswoman confirmed Monday.
Dream Center Education Holding bought the Art Institute schools last year as part of a $60 million deal with Pittsburgh-based for-profit school operator Education Management Corp.
The nonprofit announced Monday that after “undergoing an ongoing process of evaluating the viability of certain campus-based programs,” it has decided to close several campuses to new students. Including the affected Art Institutes, the nonprofit’s website lists 62 schools. South University and Argosy University are also now owned by Dream Center.
The decision affects new enrollees and prospective students, according to a statement from Dream Center. Current students should continue to attend classes.
“While we actively work with our accreditors and regulators to assess the viability of our current offerings at these locations, DCEH remains steadfast in our mission to provide students with accessible, affordable, relevant, and purposeful education aligned with market demands,” the company said in its statement.
A spokesperson for the nonprofit did not respond to questions about how many schools are halting enrollment, or whether the enrollment freeze is permanent. The News & Observer in Raleigh, N.C., reported last week that Dream Center Education Holdings notified University of North Carolina officials of plans to close three locations in the state.
Meanwhile, Education Management — the former owner of the Art Institutes and a host of related entities — filed bankruptcy papers Friday in federal bankruptcy court in Delaware.
The company listed assets of less than $50,000 and liabilities of between $500 million and $1 billion.
A 33-page list of creditors filed with the court includes former Heinz CEO and Education Management Director William R. Johnson, former Art Institutes President John Mazzoni, the Pennsylvania Department of Revenue, public employee pension funds, and investment funds based in the Cayman Islands and elsewhere.
The document did not disclose how much each creditor is owed.
Education Management filed under Chapter 7 of the bankruptcy code, meaning that it does not intend to reorganize and get back into business.
Before expanding into higher education, Dream Center was known as a nonprofit associated with a Pentecostal church focused on programs including hunger relief and shelters for human trafficking victims.
The Higher Learning Commission, a Chicago-based accreditation agency, removed the accreditation of four Art Institute schools, in Colorado, Illinois and Michigan, in January. The schools did not inform students they had lost accreditation, as is required by the commission. They continued to say they “remain accredited” in course catalogs after the commission’s decision, but updated language on their website after the Post-Gazette inquired.
Separately, the Art Institute of Pittsburgh was placed on probation by the Middle States Commission on Higher Education in February. The agency cited “noncompliance [that] is sufficiently serious, extensive or substantial that it raises concern” about the institution’s sustainability and its ability to educate students. The school remains accredited while on probation.
The nonprofit lists 50,200 students and 12,500 full-time, part-time and adjunct employees on its website.