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According to previously unreported public records, Sotheby’s Arts is a campus in London and New York, which has been one of the most severe financial sanctions from the U.S. Department of Education.
Since December 2023, the school has received the name “Cash Monitoring 2” (HCM2), which was used when the DOE identified a significant focus on the school’s financial or compliance practices. Currently, fewer than 50 schools in the country hold this status, most of which are small religious or beauty schools. Under HCM2, a school is prohibited from obtaining federal financial aid in advance and must limit its own funds and apply for reimbursement. The name points to potential students and current students warning that the institution may be at risk of closure.
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SIA was founded in 1969 by the auction house of the same name and aims to train students’ artworks. It offers master’s degree and certificate programs, and many graduates continue to work in auction houses or other market-oriented companies, or independently serve as art consultants. However, since 2005, the school has been owned by the Cambridge Information Group (CIG), a Maryland-based investment company, and retains the Sotheby’s name through a licensing agreement. It is currently operated by Branded, a subsidiary of CIG, and has received a conference degree in New York since 2016. It does so in London through a partnership with the University of Manchester.
The HCM2 name appears to reflect deeper financial problems at the school. In another December disclosure, which tracked the agency’s financial status for fiscal 2022 and 2023, the DOE review found the school well below its baseline of “financial responsibility.”
In the UK, there are also warning signs in the UK where the school operates its London branch. In SIA’s annual report for 2024 to Company House, UK government agencies tracked company financial disclosures, and independent auditors wrote that the school’s financial statements “caused significant uncertainty and could create significant doubts about the capabilities of companies that the company continues to worry about.”
Also in the filing, the company’s financial statements show that it is difficult to improve profitability and reduce its accumulated losses. In 2019, SIA generated £8.1 million in revenue and cost £8.3 million. Although revenue grew to £9 million in 2023, the cost increased to £9.35 million with £9 million. The same year, the school reported a cumulative loss of £4.7 million, a figure that can be traced back to CIG’s investment in 2005. As of the latest financial statements, the company’s financial statements have moderately reduced their accumulated losses to £4.36 million for the fiscal year 2024.
Financial researchers and journalists have conducted a greater review of the sustainability of for-profit schools in recent years. In 2023, the Arts Institution, a network of eight primary schools of eight private for-profit universities in the United States, suddenly closed after a decade of financial uncertainty, changes in ownership and a decline in enrollment. A new study published by the nonprofit National Bureau of Economic Research found that nearly 40% of the two-year for-profit schools that opened in the mid-1990s closed in 2023.
In a statement ArtnewsCIG attorney Larisa Trainor acknowledged SIA’s HCM2 identity but dismissed concerns, saying the company is continuing to invest in SIA and working to restore its position with DOE. Trainor added that federal status was implemented after difficulties amid the pandemic. She said only 10% of students attending SIA use federal financial aid, noting that the HCM2 name has not affected their ability to accept it.
“We are not worried about the viability of graduate programs,” Trainor said.
Nevertheless, in the school’s 2023 UK document, CIG is very concerned to show that it puts SIA’s business model under “critical review.”
Brandon Busteed, CEO of Branded, told Artnews His decision stems from the need to understand why enrollment has dropped to record lows in 2021. “Immersive” teaching programs (which put students into opaque industries such as art and luxury) are the company’s focus, he said.
Busteed, who has been monitoring the brand since 2023, added that the school is about to close and CIG intends to operate indefinitely.
Meanwhile, the SIA said its enrollment rate has rebounded. After falling to 191 MA students in 2021, the school enrolled 261 students for the 2024-25 school year, with an annual enrollment rate of about 2.5%. This figure roughly fits the latest national study on graduate enrollment, which is listed as 3.1% for public institutions and 2.6% for private nonprofits. Still, the SIA may be hitting its cap: in 2013, the school told New York Observer In that year alone, it received 300 master’s degrees.
Branded is confident enough to renew his 19,000-square-foot lease in Midtown Manhattan in April for another 10 years. But as the art market experiences a long shrinkage, it’s fair to wonder what the future of trade schools like SIA is.
Joanne Kesten is an art consultant and appraiser who teaches at SIA and NYU Artnews The demand for professional degrees focused on the art market is more driven by perceived value than actual value. She added that the decline in programs like the SIA is becoming increasingly apparent in the 2010s. In 2014, NYU stopped its assessment certificate program; in 2020, Christie’s education ended its master’s degree program after 42 years and now offers only online or short-term in-person programs.
In 2011, Sia has quietly closed its Singapore campus since 2007, which was considered not “commercially viable”. According to another audit of the year, it listed difficulties in better-expected enrollment rates and in compliance with the country’s strict standards for higher education.
SIA is also not the first high-profile school to receive the HCM2 name. In 2018, Howard University was placed on HCM2 after a scandal broke out in its Financial Aid Office. To be removed from the list, schools must undergo expensive overhauls of their financial aid and accounting systems. At that time, the expert told Advanced diving Obtaining evacuations from the list can bother institutions that are already struggling.
“Some other universities may just not be able to make the changes they need because they don’t have the resources,” Robert Kelchen, a professor of higher education at Seton Hall University, told the publication. “Basically, they’re on the list because they don’t have the money, and being on the list makes it even harder to stand out.”
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