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Student Loan Discharge Worth $6.1B Approved for Borrowers Who Attended The Art Institutes

The Biden-Harris Administration approved more than $6.1 billion in automatic student loan relief to borrowers who enrolled at any Art Institute campus between Jan. 1, 2004, and Oct. 16, 2017.

“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,” said U.S. Secretary of Education Dr. Miguel A. Cardona.

Cardona said the U.S. Department of Education (ED) worked with the attorneys general offices of Iowa, Massachusetts, and Pennsylvania to redress wrongs for the nearly 317,000 Art Institute borrowers and protect others from predatory institutions.

Richard CordrayRichard CordrayED recently found that The Art Institutes and its parent company, Education Management Corporation (EDMC), made pervasive and substantial misrepresentations to prospective students about postgraduation employment rates, salaries, and career services from 2004 through October 2017, when EDMC sold its remaining Art Institute campuses. Existing Art Institute campuses closed under separate ownership in September 2023.

The department independently reviewed evidence, provided by the state attorneys general offices, that included internal employment data, admissions training manuals, employment advertisements, internal records of graduate employment outcomes, and statements from former students and employees.

“The Art Institutes preyed on the hopes of students attempting to better their lives through education,” said Federal Student Aid Chief Operating Officer Richard Cordray. “We cannot replace the time stolen from these students, but we can lift the burden of their debt. We remain committed to working with our federal and state partners to protect borrowers.”

The group discharge will provide relief automatically to borrowers harmed by The Art Institutes’ actions, including borrowers who have not yet applied for borrower defense. The education department plans to notify eligible borrowers that they are approved for discharges and take steps to pause loans identified for discharge, so borrowers do not make further payments.

Officials said borrowers do not need to take any action but soon should see any remaining loan balances adjusted and credit trade lines deleted. Borrowers can learn more about borrower defense at StudentAid.gov/borrower-defense.

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