After a decade of judicial stalls, the $450 million case against one of the nation’s largest for-profit art schools must either settle or go to trial.
For 10 years, the Academy of Art University in San Francisco has fought allegations that it defrauded the government out of millions of dollars in student loans and grants through an illegal incentivizing scheme. Federal prosecutors have argued that the university — one of the biggest for-profit art schools in the country — accepted large numbers of under-qualified candidates unlikely to graduate and pay back their government-subsidized loans.
Yesterday, the US Supreme Court rejected the Academy of Art’s attempts to halt prosecution, letting stand a Ninth US Circuit Court of Appeals ruling from August that said the case can go forward because evidence exists that the school deployed illegal tactics for enrollment between 2006 and 2010. This is the fifth time since 2009 that the for-profit college has tried and failed to get the allegations thrown out of court; the school will now have to settle or go to trial.