Shaun Dunn is an expert 3-D designer whose images look so real you want to pluck them off the screen — the very sort Hollywood studios Disney and Pixar might pay an artist big money to create.
Or so Dunn believed when he was a top student at the Academy of Art University in San Francisco, whose ads say graduates “are some of the most successful and sought-after professionals in art and design today.” Dunn earned a bachelor’s degree in industrial design and stayed, at the school’s urging, he said, for his master’s in animation and visual effects. He graduated in May.
Today he’s bankrupt. He owes $431,607 in student loans and hasn’t gotten a job. His mother co-signed one student loan for his undergraduate studies in 2004 and remains on the hook for four subsequent loans. They barely speak now.
“It’s ruined my life,” Dunn, 38, said of the debt and the “guerrilla techniques” he says the for-profit Academy of Art used to persuade him to stay at the school he couldn’t afford and often felt too ill to attend, thanks to a painful inflammatory disease that slowed his progress. “I just feel they were dishonest, saying you’ve got this great future in front of you. But I feel we were ripped off. Bamboozled. Tricked.”
With 13,000 students, nearly 40% online, the Academy of Art bills itself as the “largest private accredited art university in the U.S.” It touts the success stories of graduates — but tells a different story to the U.S. Department of Education: 3 out of 4 undergraduates never graduate. For those who do, median salaries within a year of graduation range from $19,100 to $46,500, depending on what they studied, says the department’s College Scorecard, which premiered in 2015 and relies on schools’ data.
A federal lawsuit by four ex-employees accuses the Academy of Art of using illegal schemes to bait students like Dunn. The former recruiters say the school illegally adjusted their pay up or down based on how many students they registered, dangled trips to Hawaii as an incentive, and lied to the government about it to collect millions in financial aid.
Lawyers for the school have said its methods were allowable at the time and have tried for a decade to get the high-stakes suit thrown out.
Now, as the case marches toward an April 27 trial, The Chronicle spoke with 17 former students who independently contacted the paper after reading stories about the lawsuit. Students are not part of the suit, but they’re at the heart of the case: Federal law prohibits “incentive compensation” to discourage schools from enticing unqualified applicants or those who can’t afford it. Of the 17 ex-students, 12 have debt above $50,000, including eight above $100,000.
Like Dunn, most earn too little to pay off the debt. They say the Academy of Art pushed them to borrow while hinting at lucrative careers with Facebook, Google, DreamWorks or Apple — all featured prominently on its website or in its “Make Your Dreams a Reality” ads.
Academy of Art officials declined repeated requests for comment.
Most former students don’t work at those famous companies. But some do, according to LinkedIn. And some are accomplished, like Rick Baker, the Academy Award-winning makeup artist.
There is also Candace Chambers, 32, a digital marketing consultant in Oakland who earned a master’s in multimedia communications nine years ago from the Academy of Art. A reporter found her through LinkedIn and spoke with her to learn whether the experience of a graduate who didn’t contact The Chronicle matched that of those who did. The answer? Yes and no.
With skills learned at school, Chambers has been a production assistant, news reporter, social media manager and digital content manager. She’s a freelancer now and runs a separate online clothing business.
“I went there thinking, ‘I’m going to have to pay for this, so let me take advantage of every resource and get out as quickly as possible,’” said Chambers, who graduated in a year and a half. She owes $80,000. She’s in forbearance, allowing her to skip payments for a year, though interest accrues.
“I would do it again,” she said.
The ex-students who contacted The Chronicle said they would not. Unemployed or working modest jobs, they include a Lyft driver in New Jersey who earned a master’s in film and television in 2013 and owes $160,000, plus a teacher’s aide in Oakland who earned a bachelor’s in motion pictures and video in 2000 and owes $57,000.
Those who didn’t graduate include a specialty food-maker in Stockton who owes $124,000, a phlebotomist near Tracy who owes $40,000, a stay-at-home dad in San Diego who owes $24,000, and a $10-an-hour dishwasher in Texas who owes $4,000.
What they have in common is shame at their bad decisions and anger at the school. They believe they were easy prey for the Academy of Art: creative, low-income people who lacked guidance about choosing an affordable college.
“Of course I blame myself. But that school was a predator,” said Michelle Gardner, 55, of Daly City, who graduated in 1993 with a bachelor’s in advertising and a heart full of enthusiasm. She spent years peddling her portfolio to ad companies around the country before taking a social services job that pays less than $60,000. Her original $30,000 loan has ballooned to $168,280.
“It’s the cloud that darkens every day for me,” said Gardner, who is five years into a repayment plan for public employees that forgives student loans after 10 years.
The Academy of Art charges $2,889 per class for undergraduates, rising to $3,033 next fall. Add that tuition to the school’s mandatory fees, and the base charge will be $26,399. With living expenses, the cost for 2020-21 will top $44,000, federal data show.
Not everyone can afford it — or the student loans, plus interest, they might need to pay for it.
“Good schools provide advice based on students’ backgrounds and help them figure out if taking a loan out is right for them,” said Bob Shireman, who helped craft the Obama administration’s “gainful employment” rule, which penalized career colleges when former students had high debt and low loan-repayment rates — clues they were not well-prepared for good jobs. The Trump administration repealed the rule in July.
“Predatory activity is telling students that there’s financial aid, downplaying that it’s loans, and allowing them to believe they’ll benefit from paying off the loan,” said Shireman, now higher education director at the Century Foundation think tank. “It can happen anywhere, but 99% of complaints are about for-profit schools.”
Undergrads at for-profit colleges borrow more money than other students, according to the National Center for Education Statistics, which looks at borrowing habits every four years. The average amounts borrowed for college by students who graduated with a bachelor’s degree in 2015-16 were $43,600 for private for-profits; $32,500 for private nonprofits; and $27,900 for public.
More recent data show that Academy of Art graduates carry 59% more debt, on average, than grads from other four-year schools in California: $35,862 versus $22,585, according to College Insight, a project of the nonprofit Institute for College Access & Success, which studies student debt.
Founded as the Academy of Advertising Art in 1929 by artist Richard Stephens, the school today is owned by his granddaughter, Elisa Stephens, a society figure and one of San Francisco’s largest landlords. She or her limited liability corporations own 43 buildings, mainly for student housing and classrooms. The city sued in 2016, saying Stephens illegally converted many of the buildings and eliminated 160 units of affordable housing.
They settled that year for $60 million. Stephens agreed to restore affordable housing but never did. On Jan. 7, the Board of Supervisors amended the settlement to have the city create the housing at Stephens’ expense.
The Academy of Art offers degrees in 22 fields, from acting to web design, but reports a graduation rate of just 28%. The school collected more than $1.5 billion in federal student loans and $171 million in federal grants from 2006 to 2018, a Chronicle analysis of federal records shows.
In their lawsuit, the ex-employees say those millions are what motivate the school to vigorously court students and accept all applicants.
“No one was turned away,” said plaintiff Scott Rose, who is suing under the federal False Claims Act, which awards triple damages to encourage whistle-blowers who believe the government is being cheated.
Dunn, who earned two degrees and is seeking work while developing his 3-D art website, has filed for Chapter 13 bankruptcy protection to defer loan payments for five years. He was an Academy of Art student for 14 years. And with the school’s encouragement, he said, he took out 25 loans.
“I was determined to defy the odds,” he said. His dad had repaired copiers, and his mom raised the kids. Neither had a degree. But Dunn’s teachers urged him to get one. His parents divorced when Dunn was 18, leaving him to wrestle with college on his own.
He loved drawing, and found the Academy of Art. There he learned about student loans, and when his mother co-signed one for him, he was in.
In his sophomore year, while on the graveyard shift at his part-time job, Dunn suddenly felt knifelike pains in his stomach. A doctor diagnosed Crohn’s disease, an incurable inflammatory disorder that would change Dunn’s life. He became more determined than ever to stay in school.
“If I didn’t, what would I have? Nothing. No degree, no health. Just bills,” he said. “So I had to keep going.”
The school, too, was determined that Dunn stay.
“They were, like, all over me,” he said.
Dunn wasn’t the only family member affected by his decision to go to the Academy of Art — and stay there.
“Shaun’s loans have buried me,” said his mother, Gianna Lupo, of Oregon. Years earlier, she co-signed a $25,000 student loan with Sallie Mae, now Navient.
“I was a single mom trying to help my son get an education for something he really adored,” Lupo said. She didn’t read the fine print and didn’t realize she would automatically become responsible for later loans — four of his 25. With interest climbing nearly $800 a month, her portion is approaching $200,000, with no end in sight.
“It just became a monster,” said Lupo, 59, who has dreamed of retiring to Italy. But a lawyer warned that leaving would be considered loan evasion.
“It’s put a lot of separation between my son and myself,” Lupo admitted. She also blames herself — and the Academy of Art University.
“I’ve always been leery of this school,” she said. “I think it turned out to be kind of a sham.”
Nanette Asimov is a San Francisco Chronicle staff writer. Email: email@example.com Twitter: @NanetteAsimov