Biden administration forgives $6.1 billion in student debt for 317,000 former Art Institute students

The
Biden
administration
announced
that
it
would
forgive
more
than
$6.1
billion
in
student
debt
for
317,000
former
students
of
The
Art
Institutes,
the
once-giant
chain
of
for-profit
schools.
The
U.S.
Department
of
Education
concluded
that
the
schools
and
its
parent
company,
the
Education
Management
Corporation,
or
EDMC,
made
“pervasive
and
substantial”
misrepresentations
to
prospective
students
about
post-graduation
employment
rates,
salaries
and
career
services.
Eligible
borrowers
will
get
the
forgiveness
automatically,
whether
or
not
they
went
through
the
formal
process
for
loan
relief
for
defrauded
borrowers.

The
Biden
administration
on
Wednesday
announced
that
it
would
forgive
more
than
$6.1
billion
in
student
debt
for
317,000

former
students
of
The
Art
Institutes,
the
once
giant
chain
of
for-profit
schools.

The

relief
will
go
to
borrowers
who
enrolled
at
any
of
the
dozens
of
Art
Institute
campuses
across
the
country
between
Jan.
1,
2004
and
Oct.
16,
2017.

The
U.S.
Department
of
Education,
which
reviewed
evidence
provided
by
the
attorneys
general
of
Iowa,
Massachusetts
and
Pennsylvania,
concluded
that
the
schools
and
its
parent
company,
the
Education
Management
Corporation,
or
EDMC,
made
“pervasive
and
substantial”
misrepresentations
to
prospective
students
about
post-graduation
employment
rates,
salaries
and
career
services.

“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,”
U.S.
Secretary
of
Education
Miguel
Cardona
said
in
a
statement.

“We
must
continue
to
protect
borrowers
from
predatory
institutions
—
and
work
toward
a
higher
education
system
that
is
affordable
to
students
and
taxpayers,”
Cardona
added.

The
Education
Dept.
said
The
Art
Institutes
falsified
average
salaries
among
graduates,
among
other
abuses.

“For
example,
according
to
a
former
employee,
one
Art
Institute
campus
included
professional
tennis
player
Serena
Williams’
annual
income
to
‘skew
the
statistics
and
overinflate
potential
program
salaries,'”
the
department
said.

Eligible
borrowers
will
get
the
forgiveness
automatically,
whether
or
not
they
went
through

the
formal
process
for
loan
relief
for
defrauded
borrowers.

EDMC
sold
its
remaining
Art
Institute
campuses
in
Oct.
2017,
and
all
existing
schools
closed
under
separate
ownership
in
Sept.
2023,
the
Education
Dept.
said.

EDMC

filed
for
bankruptcy
in

2018.
At
one
point,
Goldman
Sachs

owned
a
large
share
of
EDMC.

In
response
to
a
request
for
comment
on
the
news,
a
spokesperson
for
Goldman
Sachs
said
that
it
exited
the
investment
more
than
10
years
ago.

This
is
breaking
news.
Please
check
back
for
updates.

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