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American
Intercontinental University
Summary
The American College of Applied
Arts, founded in 1977, offered
courses in fashion and interior
design in Atlanta, Los Angeles,
London, and Dubai. The institution
first received SACS accreditation in
1987. Steve Bostic bought the school
in 1996 and changed its name to
American InterContinental
University, added new programs, and
increased class sizes and tuition.
In 2000, Bostic sold the institution
to Career Education Corporation, a
publicly traded operator of
for-profit schools that had been
established in 1994
Areas of study you
may find at AIU Online include:
AIU's parent company has grown rapidly
and had become increasingly
controversial. CEC has been investigated
by the U.S. Departments of
Justice
and
Education
and the
Securities and
Exchange Commission.
Allegations specific to AIU include
reports that the school misrepresented
its programs and classes, made a
practice of admitting students who had
not graduated from
high school,
and included in its enrollment numbers
students who had never attended class.
One of its most outspoken critics
of AIU and CEC has been founder Steve Bostic, who concluded that "CECO's Board
has allowed management to lose sight of the Company's primary mission of
providing quality education services; under these directors, CECO management has
sacrificed the quality of student programs, resulting in the severe escalation
of student attrition - all for the sake of a "top-line growth strategy" that
cannot be sustained." Since writing these words in an open letter in 2005, CEC
schools have indeed shown a drop in growth, retention issues, and regulatory
problems
AIU continues to be dogged by
issues relating to its quality assurance problems, including several class
action suits against it and its parent company
CEC. On March 19,
2008, Wargo & French filed the attached Complaint against American
Intercontinental University and its parent company, Career Education Corporation
(collectively "Defendants"). The Complaint alleges that Defendants defrauded
current and former AIU students by advertising false employment rates for its
graduates, failing to disclose to students that it was on the verge of losing
accreditation, and falsely telling students that an AIU education was worth the
significant financial investment. The Complaint is a putative class action, with
the Plaintiff seeking to represent all other students of AIU who have been
defrauded by AIU
