The Biden administration announced on Wednesday that it will forgive $6 billion in student loans for people who attended the Art Institutes, a group of for-profit colleges that closed all campuses by 2023 due to fraud allegations.
Citing widespread deception by the institution, the Education Department is using its authority to cancel loans for students who were misled.
“This institution falsified data knowingly misled students, and tricked borrowers into taking on large amounts of debt without promising career opportunities after graduation,” President Joe Biden said in a statement.
Loans will be automatically forgiven for 317,000 individuals who attended any Art Institute campus between January 1, 2004, and October 16, 2017.
The administration has approved the cancellation of nearly $160 billion in student loans through various programs.
Art Institute of Philadelphia (Via Mark Starc/Shutterstock)
This includes $28.7 billion forgiven for students deceived by their colleges or affected by sudden campus closures.
The Education Department took action following investigations by attorneys general in Massachusetts, Iowa, and Pennsylvania, who previously sued the for-profit college chain over fraud complaints.
According to the department’s findings, the Art Institutes misled students about graduate success rates and employment opportunities. They falsely claimed that over 80% of graduates found jobs in their fields, when the actual rate was less than 57%.
Campuses also misrepresented graduate salaries, including extreme outliers like tennis star Serena Williams’ earnings to inflate average salaries, particularly at the Art Institute of Fort Lauderdale, where Williams studied fashion.
