Art Institute of Philadelphia closing leaves students and employees with hard decisions

The impending closure of the Art Institute of Philadelphia is forcing students to decide whether to move hundreds of miles away to attend another campus, finish their degrees online, or go to a new university.

Dream Center Education Holdings, which owns the Philadelphia art school and is closing 30 campuses around the nation this year, notified students last week of their options to finish their degrees once the school shuts its doors on Aug. 28.

Students on track to finish their degrees this year can continue their studies "without interruption" this semester and will get their tuition cut in half, Anne Dean, a Dream Center spokesperson, said by email.

But the choice is much harder for those not close to graduation. Their options are:

Michael Bronson, a military veteran and Art Institute student pursuing a bachelor's of science in digital film and video production, doesn't plan to complete his degree. He said "online courses are not an option" since his degree plan requires hands-on courses. He doesn't feel comfortable transferring to Pittsburgh, not after the Philadelphia campus "was closed with no warning to the student body." Student housing at affected campuses is being closed, too, a company representative and several students said.

Dream Center blamed low program demand and enrollment for the decision to close schools. Between 75 and 80 students were expected to start classes Monday, short of the institution's goal of around 100, according to a former Art Institute admissions representative who said she was among 12 in the department laid off on July 2.

Deborah Obalil, president and executive director of the Association of Independent Colleges of Art and Design (AICAD), a consortium that represents 38 arts colleges in North America, said that arts colleges are generally "doing slightly better in terms of enrollment than the overall higher education universe." The difference of around 1.4 percent is small, but, she added, there isn't just "one story" consistent across all arts colleges. Much like general higher education, the regional arts schools see a "particularly high concentration" in the Northeast, with schools like University of the Arts and Moore College of Art and Design competing with the Art Institute in the Philadelphia area.

The Philadelphia location, 1622 Chestnut St., had 1,200 students as of June 2016. Total tuition for a bachelor's degree is around $92,000, while an associate's costs around $48,000. The school offers programs from the certificate to bachelor's level in areas such as design, film, photography, gaming, and culinary studies. About one-third of students graduate.

For the 171 employees laid off in the closure, the news came as a shock. In an audio recording of a termination call, Monica Carson, Dream Center's chief enrollment officer, can be heard assuring admissions staff that their students will "be handled with white-glove treatment … and if we are unable to assist them, we will certainly refund them anything that's already been paid."

And a news release from Dream Center says that while there was not a new crop of students starting this July, there are currently enrolled students taking classes in Philadelphia, and they will "transition to their chosen transfer option by the end of the calendar year."

Dream Center declined to answer questions about teacher severance, specific enrollment, or the recently negotiated three-year contract with District Council 47 of AFSCME Local 3397. It is unclear whether Dream Center knew it was closing the Art Institute before the renegotiation.

Fred Wright, president of D.C. 47, which represents 60 instructors at the institute here, said his members are entitled to eight weeks of severance pay as part of the last contract they negotiated. The union is trying to negotiate a better severance package for the soon-to-be laid-off faculty members, he said.

"I just thought that my members were misled by the Dream Center," Wright said. "They came in promising they were going to turn the place around and invest here. And again, that just wasn't true."

Wright said Dream Center told the union during contract negotiations that the Philadelphia campus had a $2.8 million deficit this year, though he noted that "every employer comes to the table saying they have problems."

Wright, who believes the students "got screwed" with the forthcoming closing, said the school had a "wide curriculum," including culinary classes, photography, and fashion design. But he said there was controversy over the course offerings, with some arguing that "this stuff wasn't applicable" for graduates entering the job market.

Rhodie Bruce, mother of student Kamaal Holly, said she has been trying to get in touch with financial and administrative representatives from the school for weeks to get documentation on the Parent Plus loan she took out this April. There's been no response, she said.

In 2015, the Art Institute's network was ordered by the U.S. Department of Education to forgive $103 million in student loans after a consumer suit alleging that the institute's previous owners, the now-bankrupt Education Management Corp., did not adequately prepare students for its demands and enrolled them despite insufficient qualifications.

Dream Center, a "faith-based charitable organization" that runs a  megachurch in Los Angeles, established Dream Center Education Holdings as a limited liability company subsidiary and bought the then-for-profit colleges in what Dean, the company's spokesperson, called "an effort to refocus their troubled past." After the buyout, the schools underwent a conversion from for-profit to nonprofit.

Employees saw the Dream Center buyout as a good thing, the former admissions staffer said. Suddenly, there was room in the budget for food at events and staff-wide training.

But then came the sudden call on July 2, informing staff that their campus was shuttering, and with it, their jobs.

Bronson, the film student and military veteran, also feels misled, saying that "veterans who attended the Art Institutes have essentially wasted our G.I. Bills."