public traded as nasdaq edmc industry for profit education founded 1962 1962 headquarters pittsburgh pennsylvania united states number of locations 110 campuses area served united states canada key people mark a. mceachen chairman number of employees 23 000 1 divisions argosy university the art institutes brown mackie college south university website www.edmc.edu education management corporation edmc is a pittsburgh pennsylvania based operator of for profit post secondary educational institutions in the united states and canada . 2 the company was founded in 1962 . 3 education management corporation has operated 110 schools through its four higher education divisions argosy university the art institutes brown mackie college and south university . current enrollment is unknown though many brown mackie colleges and art institutes schools are in the process of closing . 4 5 enrollment for 2014 stood at 120 920 . according to edmc student enrollment was projected to decline to 109 890 in 2015 . 6 in 2011 edmc and its subsidiary the art institutes received greater public scrutiny with the release of the frontline documentary educating sergeant pantzke . in the documentary iraq war veteran chris pantzke discussed the lack of disability services at the school . according to pantzke being a soldier you don t want to quit you don t want to give up or fail . but after doing his own research pantzke concluded that the degree he was pursuing wasn t worth much more than the paper is worth . and he felt he was throwing away taxpayer money by using gi bill funds . 7 todd s. nelson who was previously the ceo of apollo education group became a became the ceo in 2007 and the chairman of the board of directors in 2012 . 8 from june 2013 to june 2014 the company eliminated about 2 600 positions 9 and campuses have been closed or are in the process of closing . 10 11 edmc has faced significant financial problems including a 99.9 % drop in the value of its stock and a defaulted bond rating to junk bond status . 12 under a pending agreement shareholder stock value will be diluted an additional 96 % . 13 14 moody s credit rating service in january 2015 dropped edmc to its lowest rating d pd . 15 edmc s ceo edward west resigned from the company on august 28 2015 to pursue other interests . the company was never profitable under his leadership . 16 edmc was delisted from the nasdaq in november 2014 edmc has been the subject of several lawsuits and investigations alleging that the company made misleading claims in its efforts to recruit students . 17 18 on november 16 2015 federal and state authorities announced a 95.5 million settlement resolving a whistleblower case in which former edmc employees said the company was illegally paying recruiters based on the number of students they enrolled . 19 as of 2016 edmc announced that it was planning to close 19 of its art institute campuses and 22 of 26 brown mackie college campuses . 20 contents 1 funding and expenses 2 programs 2.1 colleges and universities 3 growth and acquisitions 3.1 foundation and early history 3.2 expansion in the 2000s 3.3 recent history 4 corporate affairs 5 political activities 6 legal issues 6.1 lawsuits regarding financial aid and recruitment practices 6.2 investigations 6.3 dismissal of shareholder lawsuit 6.4 labor issues 6.5 financial issues 6.6 consumer fraud lawsuits 7 references 8 external links funding and expenses edit eighty percent of education management s funds come from us government funds from us department of education title iv programs pell grants and federal student loans the us department of defense and the veterans administration . in 2009 edmc allocated 21.6 percent of its revenue or 435 million to marketing and recruiting and 16 percent or 319 million to profit .1840 21 programs edit edmc operates four educational systems argosy university the art institutes brown mackie college and south university . 22 edmc schools offer online and campus based programs at the doctoral master s bachelor s associate and certificate level . 23 24 as of january 2013 edmc operated 110 colleges and universities in 32 u.s. states and canada . 1 25 however at least 19 art institutes are in the process of closing . 26 colleges and universities edit argosy university offers degrees at the bachelor s master s and doctoral level in business health sciences education and psychology and behavioral sciences . there are 19 argosy university campuses in the u.s. and the university also offers online programs . 27 the institution operates a law school the western state college of law at argosy university which was previously a separate institution . 28 the art institutes of which there are approximately 50 locations in the u.s. and canada offer programs in design fashion media and culinary arts . 29 brown mackie college offers programs in health sciences business legal studies information technology and design technology at the associate and bachelor s level . the school also offers diploma and certificate programs . there are 28 brown mackie college locations in the u.s. 30 south university offers degrees at the associate bachelor s master s and doctoral level in areas including business nursing pharmacy and creative art and design . the school has 13 locations in the u.s. and offers online programs . 31 growth and acquisitions edit foundation and early history edit edmc was incorporated in pennsylvania in 1962 and acquired its first educational institution in 1969 with the purchase of the nearly 50 year old art institute of pittsburgh . 32 33 34 in october 1996 the edmc conducted a 45 million initial public offering 67.9 million in 2016 dollars . 35 36 by 1998 edmc served 17 400 students at 15 art institutes and three additional schools . 32 expansion in the 2000s edit in july 2001 edmc purchased chicago based argosy education group the operator of argosy university campuses for 78 million 104 million in 2016 dollars . the acquisition allowed edmc to offer programs in law education and business . 35 37 in 2003 edmc acquired the health sciences focused south university in april 37 38 and 18 schools operated by the ohio based american education centers in june which were re branded brown mackie college a year later . 36 39 in september 2003 former maine governor john mckernan became edmc chief executive officer serving until 2007 . 40 41 he oversaw continued acquisitions of existing art and design schools in the u.s. and canada construction of new art institute locations and the establishment of on line education programs . 37 goldman sachs providence equity partners and leeds equity partners acquired edmc and its 70 schools for 3.4 billion in march 2006 3.99 billion in 2016 dollars . on june 1 2006 edmc was taken private again in the largest for profit education sector buyout at that time . 23 42 43 at the time of the acquisition edmc s schools were serving around 72 000 students 4 000 of whom were enrolled in online programs . 23 the additional capital was used grow online enrollment to more than 40 000 students by the end of the decade made possible in part by a 2006 congressional revision to the 50 % rule which formerly required accredited schools to enroll more than half their students in campus based programs in order to maintain federal loan eligibility . 23 44 former apollo education ceo todd s. nelson became chief executive officer of edmc in february 2007 . 45 on september 21 2009 46 edmc became a public company once again raising 330 million 364 million in 2016 dollars on the nasdaq while goldman sachs retained 40 % ownership . 33 42 47 48 recent history edit in 2012 edward west replaced todd nelson as ceo while nelson replaced mckernan as chairman . 40 after the growth in student numbers in the late 2000s edmc s enrollment declined from around 160 000 students in 2011 to approximately 130 000 students at the end of 2012 . 2 edmc has attributed this to the economic downturn of the late 2000s and new federal restrictions on the plus loan program . 22 the decrease in enrollment coupled with pending changes to the u.s. department of education s gainful employment rule prompted edmc to hold off expansion plans in 2012 24 and led to several rounds of layoffs . 42 49 only one new school opening has been announced in the 2013 fiscal year . 50 in february 2013 edmc announced a tuition freeze through at least 2015 as part of a strategy to refocus on students . 1 as of 2014 enrollment was 120 920 students a decrease of 9 percent . 51 on may 6 2015 edmc announced it would begin closing 15 of its art institute locations citing declining enrollment and restructuring . 52 the week of june 13 2016 the corporation announced the closure of most of its brown mackie college campuses with 22 of the 26 slated for closure . 53 corporate affairs edit edmc s headquarters is located in pittsburgh pennsylvania . 1 the company s chairman mark a. mceachen 16 replaced todd nelson who was its chairman since july 2012 . 42 until recently its chief executive was edward west who resigned august 28 2015 ; the company currently lists no ceo . 16 40 the current board of directors has five members all of whom have been with the company less than one year . their chairman mark mceachen was nominated by preferred stockholders after the 2015 company debt restructuring . 16 political activities edit starting in the late 2000s edmc has engaged in lobbying and political advocacy . one such area was the department of education s june 2011 gainful employment rule which limits access to federal student loan money for students attending private sector institutions with high post graduation unemployment and default rates . 48 54 55 edmc opposed the rule s original draft arguing that it limited minority and low income students access to higher education . 24 56 edmc established a pac in 2009 to address politically important industry issues . during the 2010 elections its pac donated more than 50 000 to organizations of both parties and to politicians including democratic congressman jason altmire who opposed the gainful employment rule as well as to republican congressman john kline democratic senator michael bennet and the dccc . an additional 850 000 was spent on 2010 lobbying efforts . 56 with other private sector colleges and universities edmc helped form the coalition for educational success in 2010 . represented by lanny davis the ces lobbied for changes to the gainful employment rule . 56 the coalition persuaded the department of education to amend the rule making vocational programs and programs with the highest debt and lowest loan repayment rates ineligible for federal loans . private sector providers were also given time to comply with the changes . 55 edmc senior vp of regulatory affairs and strategic development anthony j. guida jr. served by appointment on the u.s. department of education s advisory committee on student financial assistance from 2009 until september 2012 . 57 he previously served on the board of the association of private colleges and universities an advocacy organization and currently serves on the organization s federal legislative affairs committee . 58 according to open secrets edmc s expenses for lobbyists were 59 2009 110 000 2010 815 000 2011 750 000 2012 520 000 2013 520 000 2014 520 000 2015 520 000 edmc s current lobbying group is barnes & thornburg 60 legal issues edit lawsuits regarding financial aid and recruitment practices edit in 2007 two former edmc recruiters filed a whistleblower complaint regarding recruitment and compensation practices at edmc institutions . as a result of these complaints the u.s. department of justice initiated a federal lawsuit in 2011