President Biden announced on Wednesday that his administration will forgive $6.1 billion in debt owed by 317,000 students of the now-defunct Art Institutes.
The for-profit art school system, which had locations across the United States, shuttered last year. Students who were enrolled at any Art Institute branch from January 1, 2004 through Oct. 16, 2017, when the Education Management Corp. (EDMC) oversaw the organization, are eligible for debt forgiveness.
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During this period, the Department of Education determined that the Art Institutes made “pervasive and substantial misrepresentations to prospective students about post graduation employment rates, salaries, and career services during that time,” per a statement.
According to the school, more than 80 percent of graduates found employment relevant to their degrees within six months, however, the Education Department found that the figure was closer to 57 percent. School administration also promised students career services beyond graduation, but reportedly ended communication with alumni. Additionally, Art Institute employees admitted to falsifying graduate earnings data, encouraging prospective students to take on high levels of debt to enroll.
These schemes were uncovered by investigations conducted by the attorneys general offices of Iowa, Massachusetts and Pennsylvania, which brought lawsuits against the Art Institutes and EDMC — consequently creating the opportunity for loan forgiveness.
“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,” Biden said in a statement.
“While my predecessor looked the other way when colleges defrauded students and borrowers, I promised to take this on directly to provide borrowers with the relief they need and deserve,” he added.
The agency has already begun notifying those eligible, and has also said it will refund payments made by former students who meet the criteria. The total amount offered by the program is about $19,000 per borrower.
Source: artnews.com