The story
Foundation and early history
EDMC was incorporated in Pennsylvania in 1962 and acquired its first educational institution in 1969 with the purchase of the nearly 50-year-old Art Institute of Pittsburgh.
In June 1986, Robert Knutson and Merrill Lynch Capital Partners led a recapitalization of the company in which Richard Royston, co-CEO, was bought out. At the time there were eight Art Institutes. In October 1996 the EDMC conducted an initial public offering ($92.4 million in 2025 dollars). By 1998, EDMC served 17,400 students at 15 Art Institutes and three additional schools.
Expansion in the 2000s
In July 2001, EDMC purchased Chicago-based Argosy Education Group, the operator of Argosy University campuses, for $78 million ($142 million in 2025 dollars). The acquisition allowed EDMC to offer programs in law, education and business.
In 2003 EDMC acquired the health sciences-focused South University in April and 18 schools operated by the Ohio-based American Education Centers in June, which were re-branded Brown Mackie College a year later. In September 2003, former Maine governor John McKernan became EDMC chief executive officer, serving until 2007. He oversaw continued acquisitions of existing art and design schools in the U.S. and Canada, construction of new Art Institute locations and the establishment of on-line education programs.
Goldman Sachs, Providence Equity Partners and Leeds Equity Partners acquired EDMC and its 70 schools for $3.4 billion in March 2006 ($5.43 billion in 2025 dollars). On June 1, 2006, EDMC was taken private again in the largest for-profit education sector buyout at that time. At the time of the acquisition EDMC's schools were serving around 72,000 students, 4,000 of whom were enrolled in online programs. The additional capital was used grow online enrollment to more than 40,000 students by the end of the decade, made possible in part by a 2006 Congressional revision to the "50% rule", which formerly required accredited schools to enroll more than half their students in campus-based programs in order to maintain federal loan eligibility.
Todd S. Nelson, who was previously the CEO of Apollo Education Group, became the CEO in 2007 and the chairman of the board of directors in 2012.
On September 21, 2009, EDMC became a public company once again, raising $330 million ($495 million in 2025 dollars) on the NASDAQ while Goldman Sachs retained 40% ownership.
Enrollment in EDMC's online programs ballooned from 7,900 in 2007 to 42,300 in 2012, due in large part to practices that devoted more per-student expenditures to marketing ($4,158) than on education ($3,460). The next few years saw dramatic drops in enrollment and massive layoffs in the online division.
Read the full text
Recent history
In 2011, EDMC and its then-subsidiary, the Art Institutes, received greater public scrutiny with the release of the Frontline documentary: Educating Sergeant Pantzke. In the documentary, Iraq war veteran Chris Pantzke discussed the lack of disability services at the school. According to Pantzke, "Being a soldier, you don't want to quit, you don't want to give up or fail." But after doing his own research, Pantzke concluded that the degree he was pursuing wasn't "worth much more than the paper is worth". And he felt he was "throwing away taxpayer money" by using GI Bill funds.
In 2012, Edward West replaced Todd Nelson as CEO, while Nelson replaced McKernan as chairman. After the growth in student numbers in the late 2000s, EDMC's enrollment declined from around 160,000 students in 2011 to approximately 130,000 students at the end of 2012. EDMC has attributed this to the economic downturn of the late 2000s and new federal restrictions on the PLUS Loan program.
The decrease in enrollment, coupled with pending changes to the U.S. Department of Education's "gainful employment" rule, prompted EDMC to hold off expansion plans in 2012, and led to several rounds of layoffs. Only one new school opening has been announced in the 2013 fiscal year. In February 2013, EDMC announced a tuition freeze through at least 2015, as part of a strategy to refocus on students. As of 2014 enrollment was 120,920 students, a decrease of nine percent.
From June 2013 to June 2014, the company eliminated about 2,600 positions, and campuses have been closed or are in the process of closing.
On May 6, 2015, EDMC announced it would begin closing 15 of its Art Institute locations, citing declining enrollment and restructuring.
The week of June 13, 2016, the corporation announced the planned closure of most of its Brown Mackie College campuses, with 22 of the 26 slated for closure.
In December 2016, the Southern Association of Colleges and Schools (SACS) announced that nine Art Institute campuses and all 15 South University campuses were placed on probation.
EDMC has faced significant financial problems, including a 99.9% drop in the value of its stock and a defaulted bond rating (to junk bond status). Under a pending agreement, shareholder stock value will be diluted an additional 96%. Moody's credit rating service in January 2015 dropped EDMC to its lowest rating, D-PD. EDMC's CEO, Edward West, resigned from the company on August 28, 2015, "to pursue other interests". The company was never profitable under his leadership. EDMC was delisted from the NASDAQ in November 2014.
EDMC has been the subject of several lawsuits and investigations alleging that the company made misleading claims in its efforts to recruit students.
On November 16, 2015, federal and state authorities announced a $95.5-million settlement resolving a whistleblower case in which former EDMC employees said the company was "illegally paying recruiters based on the number of students they enrolled".
As of 2016, EDMC announced that it was planning to close 19 of its Art Institute campuses and 22 of 26 Brown Mackie College campuses.
In 2017, EDMC sold its remaining Brown-Mackie campuses to Ross Medical Education Centers. In 2017, EDMC reported that it had sold the existing Art Institutes to The Dream Center Foundation, a Los Angeles-based Pentecostal organization. The sale was complete in October 2017.
In 2017, EDMC reported 109 locations, but more than 40 Brown Mackie Colleges and Art Institutes schools were in the process of closing at that time.
On October 18, 2017, EDMC announced it completed the sale of 31 Art Institute Schools, South University, and Argosy University to the Dream Center Foundation.
As of 30 June 2018, it was announced that EMDC filed for Chapter 7 bankruptcy and began to liquidate its assets.
In 2022, the EDMC schools Argosy University, The Art Institutes, Brown Mackie College, and South University were among 153 institutions included in student loan cancellation due to alleged fraud. The class action was brought by a group of more than 200,000 student borrowers, assisted by the Project on Predatory Student Lending, part of the Legal Services Center of Harvard Law School. A settlement was approved in August 2022, stating that the schools on the list were included "substantial misconduct by the listed schools, whether credibly alleged or in some instances proven." In April 2023, the Supreme Court rejected a challenge to the settlement and allowed to proceed the debt cancellation due to alleged fraud.
From Wikipedia’s article on Education Management Corporation, shared under CC BY-SA 4.0.7