Phoenix Art School closes, burying thousands in debt


I’ve indirectly covered this school before, but there are so many issues missing in these stories that I feel the need to reinforce.

First off, if you type in “Phoenix” in a search in reference to a school, you get several options. This is not random. There was a famous, legitimate, business school called Thunderbird (long since sold out), and University of Phoenix likely chose their name, at least in part, to steal some of the thunder of that notable school. University of Phoenix became big and successful (sacrificing much of their legitimacy to do so), and so other schools put the name “Phoenix” in their title somewhere to exploit the extensive advertising which UoPhoenix used. The point I’m wandering around here is that scammy schools often try to pick names similar to legitimate, or at least famous, schools…it’s a flag that this school’s collapse was inevitable.

The other flag is this is an art school. I’ve nothing against art, completely respect its value in society but…the whole student loan system was approved by people who believed (or at least said) it was to help our society make more educated people. Artists, at best (possibly worst), are trained…not educated. Yet these loans are really granted just as easily and in just as great amounts as they are for the education people can theoretically get at (real) schools. I really want to emphasize: the “training” kids get in art schools is no more grueling or needing academic skills than the training needed to become a plumber, and yet the latter can be received on the job while the former somehow justifies a cost of way more than $100,000. As an added insult, anyone can get into art school, while not everyone is cut out to be a plumber.

All that said, now let’s talk about this school’s collapse:

Phoenix Art Institute Students Left in the Lurch with Thousands in Student Loan Debt

–atrocious phrasing in that title, it would be more accurate to say “thousands of students in tens of thousands in debt.”

This collapse is part of a large collapse of a family of thirty schools, with some 26,000 students; more than half of them were “art institutes.” I’m utterly without doubt that many of these students were scraped up and slammed into the school with promises that all tuition would be paid for by student loans, and that the student would be issued a “refund” on any loan money left over. It really is the modus operandi of these schools, not that the article mentions it.

…students who attended the Art Institute of Phoenix are now reporting that their loan providers are still holding them responsible for tens of thousands dollars, despite qualifying for the complete elimination of federal student debt under a Department of Education program.

Because “art school” credits aren’t education, they aren’t transferrable…when a school like this closes down, the students quite literally have nothing but debt to show for it, not that their degrees are worth much anyway. I know I’m harping on how worthless these degrees are, but when you hire an artist, that degree means absolutely nothing next to looking at actual artwork created by the artist. It really is quite vile that student loan money is being outright stolen by such degrees.

I first covered this story four months ago…and those loans have yet to be discharged. I’ll optimistically assume that at some point it will happen, but the students who have to deal with multiple calls a day from creditors probably don’t appreciate the delay.

But is it just a simple bureaucratic delay?

But despite their circumstances, students at the Art Institute of Phoenix have received denial letters from their loan companies, which state that they cannot discharge the loans because the Art Institute of Las Vegas is still open.

Oh, well, look at that. I bet these students thought by joining a big school they would have protection from the closures which are devasting our system of small liberal arts schools (a system which served well for over a century) but a school can close all campuses but one satellite and still be open, really putting the screws to students who can’t go to that remaining campus.

Actually, it’s worse than that:

Brandie Lane, a former student at the Art Institute of Phoenix, was told by her loan servicer, Cornerstone, that her loans were listed for the Vegas campus even though she never attended it. Her loans total about $40,000.

Poor kid never set foot on this campus, but her loans are listed for it. She’s not alone, other students are in the same trap. Talk about piling fraud on the fraud—she really should be able to completely repudiate this loan for a product she didn’t receive from a place she’s never been, but the student loan scam just can’t see reason here. I repeat that around 28% of the students in debt don’t even know it, and a big reason for this is because these loans are granted so easily that it’s quite trivial to rack up $40,000 in debt without a clue.

In 2015, the corporation paid $200 million in a settlement after an investigation into its recruiting tactics of enrolling students who had little chance of succeeding.

Seriously, these scammy schools shouldn’t be paying fines, they should be shut down. More importantly, the gentle reader should realize it’s not “the school” ripping people off for, in this case a couple hundred million dollars (almost certainly much more), it’s actual human beings doing this. And yet, somehow, none of them ever seem to go to jail for the crimes they commit. At absolute worst, they get golden parachutes (although commonly they quickly get another top position in higher ed).

We really need to ask questions about why our justice system doesn’t even come close to prosecuting the people involved in thefts of this size.

Meanwhile, the court-appointed receiver, Mark Dottore, who shut down much of Dream Center’s franchises, has asked a judge to approve $2.1 million in legal fees and expenses, which would consume nearly half the cash that Dream Center had on hand as of last month.

Isn’t that remarkable? The school steals hundreds of millions, probably billions of dollars, but it only has a couple million left…and that’ll be used to pay lawyers.

Seriously, nobody’s a little curious where all that money went? Nobody can guess it’s in the hands of the people who are apparently free from prosecution?

I maintain this skullduggery is quite common in higher education today, and it’s all paid for by the student loan scam, a systemic plundering of the future generation in exchange for massive wealth of the untouchables running the system.

But, sure, be angry at “the schools” for doing this.