Art Institute of Pittsburgh

In 1968, the Pittsburgh-based Education Management Corporation (EDMC) acquired the Art Institute of Pittsburgh,[7] later creating additional schools in The Art Institutes system.[8]

Enrollment in the online division and EDMC's other online programs ballooned from 7,900 in 2007 to 42,300 in 2012, largely due to practices that devoted more per-student expenditures to marketing ($4,158) than on education ($3,460).[9] In 2008, the Art Institute of Pittsburgh briefly became one of the largest arts colleges in the United States (factoring in online enrollment).

In 2009, EDMC had an initial public offering, with Goldman Sachs assuming a majority position. Emphasis throughout the EDMC system shifted increasingly toward shareholder profits with cost-cutting measures[10] resulting in larger classes, fewer student services, and a standardized curriculum throughout the system. This standardization removed the need for resident experts and curriculum developers at the individual colleges.[11]

In 2010 enrollment began to drop, in part due to the falsification of records.[12] Whistleblowers within the company sued the Institute due to practices at the online division, and were later joined by the United States Department of Justice.[13] Dramatic drops in enrollment led to massive layoffs in the online division.[14]

In 2013, Payscale.com found that the Institute provided the worst return on tuition of all institutes of higher learning surveyed.[15] According to disclosures the college was required to provide to the Department of Education, overall graduation rates fell to 39% in 2012, while graduation rates among Pell grant recipients were still lower at 27%.[16] The graduation rate fell substantially further in 2014 from 39% to 24%.[17]

New owners took control of EDMC in 2015, as EDMC entered into a debt-for-equity swap with its current owners, giving up the majority of their stock to creditors with whom they broke loan covenants.[18]

In 2017, Education Management Corporation reported that it had sold the Art Institute of Pittsburgh and the other existing Art Institutes to Dream Center Education Holdings (in turn a division of The Dream Center, a Los Angeles-based Pentecostal non-profit 501(c)(3) established in 1994).[1][19][20] The sale was completed in October 2017.[2]

According to a 2018 report by the National Center for Education Statistics, the Art Institute of Pittsburgh had a 29 percent graduation rate and a 20.9 percent student loan default rate.[21]

Dream Center would later blame EDMC for providing inaccurate revenue and cost projections at the time of the sale, resulting in a substantial operating deficit that forced the Art Institute into federal receivership in January 2019.[22]

After the collapse of a last-ditch effort to sell the school, the Art Institute of Pittsburgh shut its doors in March 2019 after being placed into federal receivership.[4][23] At the time of its closure, Ai-Pittsburgh was facing removal of its accreditation by the Middle States Commission on Higher Education (MSCHE) due to concerns over the executive leadership.[24]