Carrianne Howard had a dream: to design videogames for a living. That dream went awry when she realized that a degree she spent almost $70,000 on wasn't worth the paper it was printed on. Now she's a stripper in Fort Lauderdale, Florida. It sounds like the punch line to a joke, but Howard isn't laughing.
Howard dreamed of developing video games, so she enrolled in a program at the Art Institute of Fort Lauderdale, a for-profit college partially owned by Goldman Sachs Group Inc. But after spending $70,000 on the degree she came to the conclusion that it was worthless. When she went to find a job with her diploma proudly in hand, she figured out that it meant nothing and that it wasn't recognized by most employers in the sector. Howard settled for a $12 an hour job recruiting employees for video game companies. She lost that job, which wasn’t even close to what she was looking for, a year later when her department was shut down.
These days the 26-year-old woman makes her living by stripping at a topless club.
"I didn’t know what else to do," she says. "I’ve got a worthless degree. It’s like I didn’t attend school at all."
It's a plight that many Art Institute graduates face and now the Federal Government is looking into these for-profit schools.
Goldman, who owns 38 percent of the Art Institute's parent company, Education Management Corp., was drawn to the for-profit college company because of its by their rapid growth and soaring stock prices. But that investment is coming back to haunt the company just like the mortgage industry; Goldman is having to defend itself once again for investing in an industry under attack from Congress, the White House and dissatisfied students like Howard.
At a Senate hearing August 4, the Government Accountability Office revealed details of an undercover probe that found recruiters at EDMC’s Argosy University in Chicago and 14 other for-profit colleges misled investigators. Based on this information and a myriad of complaints, EDMC is likely to face some repercussions at the hands of the U.S. Department of Education, who may restrict taxpayer-funded grants and loans to for-profit colleges like EDMC that offer $50,000 associate’s and $100,000 bachelor’s degrees in low-paying fields.
Goldman also has to be concerned that the White House is talking tough about for-profit colleges: on July 23, the Obama Administration proposed restricting - and in some cases cutting off entirely - programs whose graduates end up with high debt relative to the salaries that they might earn with a degree.
Meanwhile, EDMC is also facing complaints from its own graduates and employees; a lawsuit filed in Texas by 18 students alleges that they were "misled about the accreditation status of their program," and leaving them with debts they couldn’t repay. In another lawsuit a former admissions officer says that EDMC engaged in high-pressure sales tactics, paying staff to sign up students. In July dozens of faculty who tried to form a union at one Art Institute campus complained that unqualified students were being let into their classes.
Goldman spokeswoman Andrea Raphael said in a statement that the company invested in EDMC “because of its leading position in the private higher-education space, its successful track record, and its demonstrated commitment to its students.”