Already under fire for a slew of Planning Code violations dating back to 2005, hundreds of thousands of dollars in unpaid fines, and accusations of engaging in an ongoing “game of obfuscation and delay,” the Academy of Art University is now in the crosshairs for “selling art degrees and false hopes.”

To quote Forbes: “It would be easy to accuse AAU of being a diploma mill, except the school doesn’t manufacture many diplomas. Just 32% of full-time students graduate in six years, versus 59% for colleges nationally, and that rate drops to 6% for online-only students and 3% for part-time students.”

The school’s annual tuition is $22,000, which doesn’t include room and board in any of the 40-odd school buildings across San Francisco, buildings which are owned by the Stephens family and leased to the for-profit University, which the family owns and operates as well.

The Stephens family real estate holdings are worth “an estimated $420 million, net of debt,” with the Concordia-Argonaut Club building on Van Ness Avenue recently added to their portfolio.

Comments from Plugged-In Readers

  1. Posted by seriously

    Replace “Academy of Art” with basically every other for-profit college and that statement will still be true. Something needs to be done.

  2. Posted by Mark F.

    It’s not just “for profit” colleges. Numerous “non-profit” schools have dismal graduation rates and poor job prospects for their graduates.

    • Posted by Bertie Anglis

      It’s much more egregious for the “for profit” schools though. They have a greater economic incentive to admit students who have no hope of graduating and/or getting a job. This abuse is especially bad with applicants who are veterans, given all the money the federal government pays for their tuition.

    • Posted by seriously

      for profit colleges prey on students that have federal loans and grants (military, low income, inner city, etc.) because they keep all the money when the student drops or defaults. your tax dollars at work!

  3. Posted by Futurist

    Finally, we’re beginning to see the real truth of the scam the Stephens family is running. They are flat out lying and cheating to the city of San Francisco and to the students.

    • Posted by david m

      yeah, there are a couple of side articles on forbes too, this one is an eye-popper.

    • Posted by curmudgeon

      Not to mention cheating the federal government of all those student loans.

    • Posted by Serge

      Aren’t they also one of the largest landlords in SF? I believe they are right behind Park Merced and Sangiacomo (and previously Lembi).

  4. Posted by guest

    students/individuals who are ignorant and naive enough to go to the AAU have only themselves to blame…the issues that bother me are (1) the use of subsidized federal money to fund the AAU and the tuition of these individuals and (2) AAU’s ownership of 40 properties that could be used on far needier uses in SF (e.g., thousands of units of housing).

    • Posted by Mark

      Same holds true for those who lost their homes because for some reason they thought they could afford a $600,000 house on an annual income of $50,000. The government (aka, taxpayers) bailed them out thanks to their ignorance and naivety.

    • Posted by curmudgeon

      Give me a break. Government exists to make sure this kind of stuff doesn’t happen by creating the rules of behavior. It is not SIMPLY the fault of the students, who are – after all – often very young and naïve to start with. The federal government has facilitated rampant abuse of student loans by these diploma mills, and has finally started to get tough and change the rule (against the very well organized for-profit education lobby). It has been a national disgrace.

      • Posted by GRADSTUDENTART

        Do you not get that this is NOT a diploma mill because of the low graduation rate. It is a very DIFFICULT school to graduate from because the standards are so HIGH. The writer of the article is CLUELESS in this regard.

        The problem lies in the open acceptance which accepts people that are clueless as to what is required to stay in this school and thus drop out. THAT IS WHY THE LOW GRADUATION RATE. It is an extremely difficult school with a great curriculm, with much flaws like any school. AAU needs to change it’s open enrollment policy and everything gets fixed. The article has many mistakes.

        WASC regarded AAU’s academic standards very high and it’s education top notch. You have to go there to understand the value of arts in our culture. It’s a shame this article was so ONE sided because ART suffers for it. Private art schools offer some of the best art education around and sometimes if not most times, cannot be compared to public institutions.

        • Posted by ess

          So…their graduation standards are “very high,” but their admissions standards are low? Nice work if you can get it.

        • Posted by SFRealist

          From the Stephens family perspective, that’s a feature, not a bug. Because it doesn’t matter if you graduate, as long as you pay tuition.

          They’ve been violating god-knows-how-many city code sections for years. Gee, I wonder why SF never seems to drop the hammer on them….

        • Posted by Expert

          Wrong!

    • Posted by GRADSTUDENTART

      NO, we need to save the arts in education!! Don’t get rid of buildings for students!!! that’s crazy! Get rid of the HIGH INTEREST RATES ON STUDENT LOANS and bring it down to 1or 2% and watch students pay down debt faster. Government needs to have the lowest interest rate on education loans!

  5. Posted by ejay

    I love that she likes to be referred to as “Dr. Elisa Stephens” while she has a law degree… I know its a Juris Doctorate (I have one)…but come on. Seriously?

    • Posted by Mark

      It like people adding M.S. or M.A. after their name. Graduate degree? Big deal.

    • Posted by guest

      especially when the JD is from the USF…ironically, a law school whose current employment outcomes may actually rival AAU

      • Posted by Bay Area Native

        Is it that the JD degree is from USF or is it that you just suck at what you do?

    • Posted by NJ

      That. Is. F*cking ridiculous.

    • Posted by Bertie Anglis

      Sorry to be nitpicky ejay, but there’s no such degree as a Juris Doctorate. A JD is either a Juris Doctor or a Doctor of Jurisprudence. Otherwise, I agree with you 100%.

  6. Posted by Mark

    Same can be said for culinary degrees. I briefly worked at the CCA here in SF as head of its library and painfully listened to the salivating recruiters give scripted sales pitches to young HS grads about the wonders of a culinary arts degree, including everything from owning 5-star restaurants to having their own top-rated shows on The Food Network. The reality is that many of the prospective students couldn’t do basic math or put a coherent thought together on paper, much less run a culinary empire. Once admitted and tuition was paid the school could not have cared less about students’ progress or career aspirations. Students were lured in with false promises of post-grad placement. No wonder the school was hit by a class action lawsuit about 10 years ago.

    Riding the NYC subway you can’t avoid the ads for the dozens of half-baked “colleges” and “universities” looking to put your career on the fast track. Among these ads are ads for legal services targeting victims who believed these higher ed institutions’ false claims. Sadly, both parties are at fault and should be held accountable.

    • Posted by Dubocian

      AAU (formerly Academy of Art College; I guess when you amass enough real estate you get to graduate and become a university) somehow forgets to tell prospective students that there is an essential prerequisite to graduation in most of their degree programs: talent. And talent is something that can’t be bought, or learned, or otherwise acquired by students lacking it. They sell people on “anyone can become a successful ” but the truth is, that’s complete bullshit. Students without some inherent aptitude in their chosen area of study cannot hope to achieve sufficient competence to graduate.

      But there’s also another angle here. I wonder what percentage of AAU’s enrollment is foreign students? I believe it’s a very significant percentage. Lots of AAU students are the children of rich overseas parents, and AAU enrollment, in many cases, is largely a vehicle that gets them a near-automatic residence visa to come live in San Francisco for a couple of years or more. I have known foreign AAU students who had no intention of or interest in graduating, they only attended class and did coursework at a minimum level so that they could remain enrolled until their multiple-year American experience was over and they returned home. I suspect this strategy is not uncommon.

      Because AAU’s admission standards are virtually nonexistent, they also attract hordes of foreign students who want to study in the USA but are unable to gain admission to schools that might actually teach them something they can use, instead of honing and polishing artistic abilities they will never possess. And while I’d wager that the graduation rate for international studies is probably even lower (and perhaps drags down the overall graduation rate), most students that come for a couple of years or more DO return home with a decent command of the English language, though I think you can credit that to immersion in the language and not to AAU.

  7. Posted by Maurepas

    “the government should get out of the way so business can prosper”

    • Posted by curmudgeon

      why the quotes? you don’t actually believe that, do you? In this case the entire business model is to take advantage of the naivete of uneducated youth. The government should get IN the way of that.

  8. Posted by Joshua

    Lawyers: shouldn’t allegations like these attract the interest of a prosecutor?

    • Posted by parklife

      He’s too busy trying to bury Uber.

      • Posted by curmudgeon

        Herrera is actually one of their biggest critics. “As progress was stalling the environmental review in November 2012, City Attorney Dennis Herrera lambasted city planning director John Rahaim for failing to act, according to a confidential letter leaked to the San Francisco Chronicle. (Herrera says his office can’t take legal action until the planning department exhausts its administrative tools.)” (from the forbes article linked above).

        [Editor’s Note: Or as we reported last year: Academy Of Art Continues To Disregard Planning, Penalty Free.]

    • Posted by guest

      did you read the linked Forbes article? Elisa and AAU have effectively paid off parts of the SF gov’t

      • Posted by Joshua

        Yes, I did read that. Seems then the Department of Justice needs to get involved, no?

        • Posted by Joel

          Maybe she’ll be the next one exposed in the Yee-Shrimp Boy scandal…

    • Posted by Expert

      Great question!

  9. Posted by redseca2

    The Stephens family probably realized that the classic engine for creating this sort of wealth for yourself, building a mega church & related media empire, was too tacky and wouldn’t fly in San Francisco. The CCA had dibs on food, so the next option, Art School.

    • Posted by Ivoryhouse

      So true.

    • Posted by Mark

      The Bay Area is flooded with culinary arts schools. Latest addition is the SF Cooking School which does not accept government financial aid. Just cash, check or credit card…and $25,000.

  10. Posted by jamesjr

    “Behind every great fortune there is a great crime.”

  11. Posted by sf

    I remember as a kid it was always Academy of Art College, you could see their signs along Fisherman’s Wharf. When, and why did it change to “University?”

  12. Posted by The Milkshake of Despair

    The AAU is just a scheme to siphon off student loans to fund a tax protected real estate empire. There are plenty of other places to get an actual art degree including the world class San Francisco Art Institute in North Beach. If money is an issue then San Jose State offers a seriously good faculty at state college tuitions.

    • Posted by Futurist

      Yes. the two schools you mentioned are really great, serious art schools.

  13. Posted by Some Guy

    Reading the comments on this entry I have to keep glancing up at the title bar to reassure myself I’m on Socketsite, not Reddit.

  14. Posted by c_q

    so is it a school or a REIT? hard to tell

  15. Posted by 4th Gen SF'er

    The SF Art institute is actually another scam but they have a great reputation around SF because they’re not as outwardly sleazy as the AAU. However, if you want to actually get into commercial art & learn to make a living, the AAU is much better. In today’s techworld, getting a degree is not exactly necessary.

  16. Posted by EcceMorons

    I like this kind of remedy – using the courts to allege fraud (and let a jury decide) – for both profit-making colleges and “non-profit-making colleges”, as opposed to some of the remedies that I know “populist” politicians will eventually cook up – a “government bailout”. I.E – “You poor kiddies, with your ‘safe rooms’ and ‘trigger warnings’ got your degree in The History of Gender Discrimination” et. al.- and now can’t find a job, but you borrowed lots of money to pay for tuition (and ‘living expenses’ – often nice off campus apartments and a car). You’re a victim!!! And we’ll just drop your student loan debt and your nice Government will eat it (that is, make other taxpayers pay off your loans)”

  17. Posted by BobN

    I’m so glad we abandoned our long-standing successful education system in favor of privatization and market forces. It’s worked out so well.

    I’m no fan of the AAU, but why isn’t Forbes going after the big fish, Liberty University?

    • Posted by curmudgeon

      I think that AAU makes a sexy story because of San Francisco and real estate. I believe Liberty University is a non-profit with a very large on-line presence where it’s main abuse comes from – at least in terms of student loan harvesting.

  18. Posted by d-b

    I would add a third San Francisco diploma mill to the above list. The HULT private business school in Levi Plaza caters to wealthy foreign students and offers a one year graduate MBA. HULT appears to offer admission to anyone with a checkbook.

  19. Posted by fred

    Some foreign students enroll at places like this to maintain residency in the US. I know one guy who kept enrolling in different schools to get something like 5 masters degrees!

    • Posted by Amewsed

      He should wise up and marry a U.S. citizen to gain citizenship. Save a ton of money on all those degrees.

  20. Posted by Pablito

    Every SF mayor since Willie Brown has looked the other way on the AAU blatantly breaking the law and flouting the planning code. And it is unlikely Mayor Lee is going to change his way of “doing business” with AAU over a couple of Forbes articles.

  21. Posted by curmudgeon

    wow. someone doesn’t know what they are talking about. Didn’t we mention naïve students above?

  22. Posted by alberto rossi

    I’d say the Forbes article was clueless in this respect: they publish a map of all the properties with some pictures, but for 2151 Van Ness they didn’t show a picture of St. Brigid Cathedral? Yes, AAU owns a cathedral!

    • Posted by curmudgeon

      Um, not a cathedral, a church. St. Mary’s (Our Lady of Maytag) is the catholic cathedral in San Francisco. Old Saint Mary’s in Chinatown was once the cathedral. Otherwise that’s it, as far as the catholics go. St. Bridgid’s was a parish church.

  23. Posted by Mark F.

    How many people graduate from City College of San Francisco? Their graduation rates are dismal as well, although it is not very expensive to attend.

    • Posted by Serge

      I would assume most people who went to CCSF transfer out to a 4 year school (such as SF State). Just about everyone I know who went to CCSF went that route. In effect, their graduation rates would be artificially low.

  24. Posted by zoli

    more unethical, self-serving avarice from the obscenely rich. and their criminal behavior continues. somebody’s plams must be getting greased. and there’s willie brown in the forbes article. what a surprise!

  25. Posted by benwa

    Dr. Stephens is one of the smartest people out there. She developed the art school. She then started buying up the apartments in the downtown area converting them to pseudo dorms. Bye-bye rent control. New tenants whenever the students turned over. Great biz plan…..

  26. Posted by Amewsed

    This is an actual arts school? I always thought this was a backdoor way for foreign students to enter the U.S. on a student visa, then “disappear” off the radar, or get married to a U.S. citizen to obtain citizenship. Of course, they still pay the tuition fees. Different meanings for different people.

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