President Biden approves over $6 billion in student loan discharge (Photo/Sacramento Bee)
By Karen Stokes
The Biden-Harris Administration announced an additional over $6 billion in student debt cancellation for 317,000 borrowers who attended the Art Institutes, on or after Jan. 1, 2004, through Oct. 16, 2017. A higher-ed entity that knowingly defrauded its enrollees over several years.
Today’s action brings total approved debt cancellation under Biden Administration to almost $160 billion for nearly 4.6 million borrowers.
“This institution falsified data, knowingly misled students, and cheated borrowers into taking on mountains of debt without leading to promising career prospects at the end of their studies,” President Joe Biden said in a statement.
The Department independently reviewed evidence provided by the attorneys general offices of Iowa, Massachusetts, and Pennsylvania, which conducted multi-year investigations into, and brought lawsuits against, The Art Institutes and EDMC. The attorneys general of Pennsylvania and Iowa provided materials obtained from investigations into these entities, including internal employment data, admissions training manuals, and the school’s employment advertisements. The Massachusetts attorney general provided information obtained during an investigation into the New England Institute of Art—the Massachusetts Art Institute campus—including internal employment verification forms, other internal records of graduate employment outcomes, advertisements, and statements from former students and employees, according to ed.gov.
Based on the evidence, the Department found that The Art Institutes engaged in widespread and pervasive substantial misrepresentations that deceived students about the value they would be receiving from their education.
The Department will begin notifying eligible borrowers today that they are approved for discharges. Borrowers do not need to take any action. The Department will take immediate steps to pause loans identified for discharge so borrowers do not make further payments. This ensures that they will not face any further financial demands from these loans during the time needed to process their discharges.
Borrowers who want to learn more about borrower defense can do so at StudentAid.gov/borrower-defense.
“For more than a decade, hundreds of thousands of hopeful students borrowed billions to attend The Art Institutes and got little but lies in return. That ends today—thanks to the Biden-Harris Administration’s work with the attorneys general offices of Iowa, Massachusetts, and Pennsylvania,” said U.S. Secretary of Education Miguel Cardona. “We must continue to protect borrowers from predatory institutions—and work toward a higher education system that is affordable to students and taxpayers.”