Biden cancels $6.1 billion in student debt for former Art Institute students

The Biden administration announced more relief Wednesday for people paying back their student loans, approving $6.1 billion in automatic loan relief for nearly 317,000 former students of The Art Institutes.

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The debt cancellation applies to people who enrolled in any Art Institute campus between Jan. 1, 2004, and Oct. 16, 2017. The Department of Education found that the for-profit schools and their parent company, Education Management Corporation, misled prospective students about employment rates for graduates, 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,” Education Secretary Miguel Cardona said in a statement. He added, “We must continue to protect borrowers from predatory institutions—and work toward a higher education system that is affordable to students and taxpayers.”

Authorities reviewed evidence gathered by the attorneys general offices of Iowa, Massachusetts and Pennsylvania, and 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 Art Institutes falsely advertised that 80% of its graduates found jobs in their fields of study within six months of graduation and inflated salary numbers. A former employee admitted to investigators that one campus even included tennis great Serena Williams’ salary in the data to skew the statistics, officials said.

In a statement released Wednesday, Biden said The Art Institutes “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.”

Education Management Corporation sold its remaining Art Institute campuses in 2017, and all the network’s campuses closed under separate ownership last year.

Officials said they will begin notifying eligible borrowers that they’ve been approved for debt relief beginning Wednesday. Former students will not be required to take any action.

Since taking office, the Biden administration has forgiven nearly $29 billion in debt for 1.6 million borrowers “whose colleges took advantage of them, closed abruptly, or were covered by related court settlements,” the president said Wednesday. He added that his administration has so far canceled $150 billion in debt for nearly 4.6 million borrowers.

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