The Biden administration announced Wednesday that it canceled $6 billion in student debt for borrowers who attended the Art Institutes between January 2004 and October 2017.
Numerous legal actions accused the American college chain of using “pervasive” methods to attract students, including using alumnus Serena Williams’ multimillion-dollar salary as a means to skew the median salary of alumni.
President Joe Biden’s latest handout brings total forgiveness to $160 billion for 4.6 million borrowers ahead of the November election. He doubles down on Biden’s promise to eliminate student debt after the Supreme Court ruled that he couldn’t take the sweeping steps he wanted at the start of his administration.
“This institution falsified data, deliberately misled students, and tricked borrowers into taking on mountains of debt without creating promising career prospects at the end of their studies,” the president said in a statement about the latest wave of student loan relief. .
Biden’s Department of Education will automatically erase the loans of 317,000 people who attended any Art Institute campus between January 1, 2004 and October 16, 2017.
Those who attended the Art Institutes between January 2004 and October 2017 will have their student debt erased. People walk past the Art Institute of Philadelphia operated by Education Management Corporation on November 16, 2015 in Philadelphia.
The Biden administration said Wednesday it will cancel $6 billion in student loans for people who attended the Art Institutes, a for-profit college system that closed the last of its campuses in 2023 amid allegations of fraud.
The latest action comes after the department reviewed evidence from the attorneys general of Massachusetts, Iowa and Pennsylvania, who previously investigated allegations of fraud and sued the for-profit chain.
According to the department’s findings, the chain misled students about graduate success and about employment partnerships that would help students find jobs after graduation.
The network told prospective students that more than 80 percent of graduates found jobs in their fields of study, but that was largely based on manipulated data, the Department of Education said. The true employment rate was below 57 percent.
The campuses also advertised graduate salaries that were based on fabricated data and included extreme outliers to make the averages look better, the department said.
Tennis icon Williams studied fashion at the Arts Institute campus in Florida.
The chain’s tactics led borrowers to borrow large amounts of debt for programs that didn’t pay off, the department said.
“The Art Institutes took advantage of the hopes of students who were trying to improve their lives through education,” said Richard Cordray, chief operating officer of the Department of Education’s Federal Student Aid office.
“We can’t replace the time stolen from these students, but we can alleviate their debt burden.”
On Wednesday, the Department of Education will begin sending emails to borrowers who will have their loans canceled. They will not need to take any action and payments already made on the loans will be refunded.
At its peak, the chain had dozens of campuses across the country, including New York, Chicago, Miami and Los Angeles. It was operated for decades by Education Management Corp., which collapsed in 2018 after years of legal problems.
Numerous legal actions have accused the university of using “generalized” methods to attract students, including using alumna Serena Williams’ multimillion-dollar salary as a means to skew the average salary of alumni.
The company reached a $95.5 million settlement with the Justice Department in 2015 over allegations of illegal recruiting tactics. Shortly after, it began closing campuses and then sold the rest to another company.
The last eight campuses were closed last year.
“While my predecessor turned a blind eye when colleges let students and borrowers down, I promised to take this head on to provide borrowers with the relief they need and deserve,” Biden said in a statement Wednesday morning, attacking former President Donald Triumph.
‘Over the past three years, my Administration has approved nearly $29 billion in debt relief for 1.6 million borrowers whose colleges took advantage of them, abruptly closed or were covered by related lawsuit settlements, compared to just 53,500 borrowers that they had once paid their debt. canceled (sic) through these types of actions before taking office,’ he continued.
“And in total, we have approved debt cancellation for nearly 4.6 million Americans through various actions.”
The Biden administration has continued to cancel student loans through several existing programs, even as it pursues a broader one-time cancellation plan. That plan is a continuation of one that the Supreme Court rejected last year.
In total, the Democratic administration says it has approved the cancellation of nearly $160 billion in student loans, including through programs for public workers and those defrauded by their schools.
