You have /5 articles left.
Sign up for a free account or log in.
The Education Department will wipe out $6.1 billion in loans for students who attended any Art Institute campus from 2004 to 2017. The relief comes through the borrower defense to repayment program, which allows students who were misled or defrauded by their institution to seek relief.
Department officials said in a news release Wednesday that the shuttered Art Institutes chain and its former parent company, Education Management Corporation, inflated graduate employment rates, exaggerated its relationships with employers, and skewed or falsified the earnings data of graduates.
The department’s news release said that, according to a former employee, “an Art Institute campus included professional tennis player Serena Williams’ annual income to ‘skew the statistics and overinflate potential program salaries.’” (Williams attended the Art Institute of Fort Lauderdale.)
The Art Institutes were sold in October 2017 to the Pennsylvania-based nonprofit Dream Center Education Holdings, which converted the private for-profit institutions to nonprofits. A year later, 30 campuses closed their doors. By fall 2023, the chain had shut down. The borrower defense discharge covers students enrolled in Art Institutes before the 2017 sale. About 317,000 former students are expected to benefit automatically.
“This institution 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,” President Biden said in a statement. “While my predecessor looked the other way when colleges defrauded students and borrowers, I promised to take this on directly to provide borrowers with the relief they need and deserve.”
