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Academy of Art and Others Hit by Suits by Karl Cohen
The Academy of Art provides a massive presence, through its 32 properties, in downtown San Francisco. photo: courtesy the Academy of Art
A judge ruled in June that a civil court can proceed with a whistleblower suit filed by four former Academy of Art University recruiters. (It was filed in 2009 but delayed by the school’s legal objections.) The four recruiters claim their pay was adjusted on how many students they enrolled, the SF Chronicle reported in July, although the university insists what it did was OK under a legal loophole.
This practice, which the government alleges is illegal, encourages recruiters to sign up unqualified students so the recruiter can get their full salary or even a bonus if they sign up extra students. Since students often need government loans to attend the program, by accepting unqualified students who are not likely to graduate, the school gets the money while the students gets stuck with loans they may not be able to pay back. (Film students have a high rate of both dropping out and loan default.)
Uncle Sam believes the use of quotas to get ones full salary results in the school encouraging illegal tactics to get unqualified students to apply, a practice which results in million of dollars being awarded to unqualified students and the government being defrauded for almost as much. Records show many of the loans go unpaid in part or in full.
By being whistleblowers for the government, the four former recruiters can get a percentage of what the government gets if they win the case, implying they may have alternative motivation. Nevertheless, a judge evidently sees some merit to it considering the ruling that the case can go forward. It will be interesting to learn the case’s outcome. If you want to know more see the Chronicle’s "Financial Fraud Alleged" or search SF Gate for the July 13 cover story “Art school denies financial aid fraud”.
Meanwhile, on another tuition front, Cal Grants have been revoked to the Academy of Art, Ex'pression College for Digital Arts in Emeryville and 152 other underperforming schools, according to the August 1 Huffington Post. This article and others covering the story tell us what the California Student Aid Commission has been saying for years. In order to protect students, parents and taxpayers, Cal Grants need to go to students who are enrolled in “programs that deliver proven educational and career value."
The commission’s new rules are designed to eliminate schools with high loan default rates and low graduation rates. That means about 7,800 students promised Cal Grants for the 2012-13 school year will not get them unless they can change schools before the fall semester starts—not an easy feat for many students.
The Academy provides serious star wattage: here fashion designer Jean Paul Gaultier reviews the portfolio of fashion student Melissa Calamia. photo: Carolyne Zinko
The California Student Aid Commission’s website lists other schools no longer eligible for the grants that teaching animation and/or filmmaking. It includes the three campuses of the Art Institutes of California chain (Los Angeles, Hollywood and Sunnyvale) which the US government is suing, along with the Art Institute's parent corporation, for a few billions dollars for fraud. Also on the list are some of the giant for-profit schools University of Phoenix, Kaplan College, ITT Technical Institute, Heald College and Devry.
The new guidelines require that institutions have a student loan default rate of 15.5 percent or less and a graduation rate of 30% or higher. I suspect the Academy of Art will probably get off the list fairly soon, or was improperly put on, considering their graduation rate is 29.2%, less than one percentage point shy, and their default rate is 10.62%, see "Academy of Art and Cal Grants" or go to the government website.
As if this were not enough, the Academy has also been accused of exploiting free student labor. The website VFX Soldier has been concerned for months that the VFX firm Digital Domain will undercut the labor market with free student labor from a school the studio chief is opening in Florida. The students will have the chance to work on commercial features during their last two years at the school but, not only will they be unpaid, they will be paying a hefty tuition for this privilege.
The SF Chronicle recently reported that Benh Zeitlin directed, “Beasts”, his first low budget feature, using visual effects provided by students at the Academy of Art at no cost to the filmmakers. VFX Soldier suggests both schools are exploiting free labor by having the laborers work on commercial projects while paying the school tuition, although others may see this as a fun way to earn college credit and even get screen credit on films that will be released to the public. I’ll let you decide if the Academy’s Studio 400A Compositing in Production class is a good deal or exploitation.
On the other hand, students who refuse to stoop to bonded servitude get slammed for not working hard enough on their careers. A former student of mine at SF State, after reading a Time Magazine article on the unpaid internships, wrote me: “I don't even understand how the people in this article could afford to do unpaid internships. For me and a lot of my peers, it's not even an option because of our economic situations. As a consequence though, we get lectured about how we haven't ‘made it’ because of our lack of ‘flexibility’ to do unpaid work.”
One of the 150+ classic cars belonging to the Academy's Chairman Emeritus, Richard Stephens, son of the founder. photo: Carolyne Zinko
Art and film schools are not the only ones suffering from the courts' new determination to get serious about dealing with schools that make money lying to and exploiting their students. The case against the California Culinary Academy, recently settled for $40 million, is all about fraud and dishonesty.
Apparently students, often lacking the necessary qualifications, get accepted to these expensive schools and are told they have great careers awaiting them. All they need to do is to take out government educational loans and all will be rosy, according to the brochure.
When they look for work, however, many are shocked to find no jobs, low paying ones or unpaid internships. About 500 students who were part of this class action lawsuit against the California Culinary Academy, formerly located on Polk Street, received up to $20,000 each. The school has recently moved to what appears to be a smaller, less expensive location. For details, google “Culinary Academy of California, SF lawsuit.”