On May 1, 2024, the Biden-Harris Administration announced the approval of a $6.1 billion group student loan discharge for 317,000 borrowers who attended The Art Institutes. This action brings the total approved debt cancellation under the Biden Administration to nearly $160 billion for almost 4.6 million borrowers.
U.S. Secretary of Education Miguel Cardona expressed, "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."
The Department of Education found that The Art Institutes and its parent company, Education Management Corporation (EDMC), engaged in pervasive misrepresentations regarding postgraduation employment rates, salaries, and career services. This led to the approval of over $6.1 billion in automatic student loan relief for affected borrowers.
Federal Student Aid Chief Operating Officer Richard Cordray stated, "The Art Institutes preyed on the hopes of students attempting to better their lives through education. We cannot replace the time stolen from these students, but we can lift the burden of their debt."
The Department's review, based on evidence provided by state attorneys general, revealed that The Art Institutes significantly misled students about the value of their education. The school exaggerated employment rates, salaries, and partnerships with employers, ultimately burdening borrowers with high debt and limited job opportunities.
Moving forward, the group discharge will provide automatic relief to affected borrowers, with the Department initiating steps to pause loans and refund any payments made. Borrowers can learn more about borrower defense at StudentAid.gov/borrower-defense.
The Biden-Harris Administration reaffirmed its commitment to providing federal student loan relief, with nearly $160 billion approved for various borrower groups. This includes addressing administrative failures, forgiveness through programs like PSLF, and relief for those cheated by schools or affected by institutional closures.
The ongoing efforts reflect the administration's dedication to protecting borrowers and ensuring a fair and transparent higher education system.
