Exploring the History and Achievements of Education Management Corporation

Exploring the History and Achievements of Education Management Corporation

Education Management Corporation (EDMC) is a for-profit education company that was founded in 1962. The company has a long and interesting history, marked by mergers, acquisitions, and controversies. In this article, we’ll explore the history and achievements of EDMC and analyze its impact on the education industry.

The Early Years

EDMC was established in 1962 under the name of Pennsylvania School of Accountancy. The school was founded by entrepreneur Dennis Keller and his wife Cynthia. The school was initially a small institution offering business and accounting courses. In 1970, the school became the Art Institute of Pittsburgh and expanded its academic programs to include visual arts.

Merger and Acquisition

In 2001, EDMC acquired the International Academy of Design & Technology (IADT). The acquisition of IADT propelled the company into a national institution. The company continued to acquire several other schools in the following years, including Brown College, South University, and Argosy University.

In 2006, EDMC became a publicly traded company, offering shares through an initial public offering (IPO). The company had a successful IPO, raising more than $400 million. However, it faced significant financial difficulties in the years that followed.

Controversies

EDMC has been involved in several controversies relating to marketing practices, recruitment practices, and financial aid practices. In 2011, the company was sued by the Department of Justice (DOJ) for alleged false claims in its marketing practices. The DOJ claimed that the company had illegally paid recruiters based on the number of students they enrolled.

In addition, the company was accused of using high-pressure sales tactics to persuade students to enroll and to take out large loans. The company was also alleged to have violated federal regulations by improperly assessing the eligibility of students for federal financial aid.

Restructuring

In 2015, EDMC underwent a major restructuring in an effort to address its financial difficulties. The company sold several of its schools, including Brown Mackie College and South University, to focus on its core programs.

The restructuring included a debt-for-equity exchange, which reduced the company’s debt by $1.3 billion. The company also closed several underperforming schools and laid off thousands of employees.

Impact on the Education Industry

EDMC has had a significant impact on the education industry. The company’s aggressive acquisition strategy helped it to become one of the largest for-profit education companies in the world. It also contributed to the broader trend of for-profit education institutions, which have been criticized for exploiting students and delivering poor educational outcomes.

Despite the controversies and financial difficulties, EDMC has achieved some notable successes. The Art Institutes, for example, remain one of the most recognized and respected art and design schools in the country. Argosy University is also a well-regarded institution, particularly in the fields of psychology and counseling.

Conclusion

Education Management Corporation has had a long and interesting history, marked by mergers, acquisitions, and controversies. The company has had a significant impact on the education industry, both in terms of its successes and its detractors. Regardless of its controversial past, EDMC still remains a player in the for-profit education sector, and its institutions continue to provide education and training to thousands of students each year.

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