Current:Home > ContactFormer students of the for-profit Art Institutes are approved for $6 billion in loan cancellation -Wealth Evolution Experts
Former students of the for-profit Art Institutes are approved for $6 billion in loan cancellation
View
Date:2025-04-14 16:22:36
WASHINGTON (AP) — The Biden administration on Wednesday said it will cancel $6 billion in student loans for people who attended the Art Institutes, a system of for-profit colleges that closed the last of its campuses in 2023 amid accusations of fraud.
Saying the chain lured students with “pervasive” lies, the Education Department is invoking its power to cancel student loans for borrowers who were misled by their colleges.
“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 Joe Biden said in a statement.
The Education Department will automatically erase loans for 317,000 people who attended any Art Institute campus between Jan. 1, 2004, and Oct. 16, 2017.
The department says it’s taking action after reviewing evidence from the attorneys general of Massachusetts, Iowa and Pennsylvania, which previously investigated complaints of fraud and sued the for-profit chain.
According to the department’s findings, the chain misled students about the success of graduates and about employment partnerships that would help students find jobs.
The chain told prospective students that more than 80% of graduates found jobs in their fields of study, but that was largely based on doctored data, the Education Department said. The true employment rate was below 57%.
Campuses also advertised graduate salaries that were based on fabricated data and included extreme outliers to make averages look better, the department said.
One campus included the annual salary of tennis star Serena Williams to skew the average salary, investigators found. Williams studied fashion at the Art Institute of Fort Lauderdale, Florida.
The chain’s tactics led borrowers to borrow high amounts of debt for programs that didn’t pay off, the department said.
“The Art Institutes preyed on the hopes of students attempting to better their lives through education,” said Richard Cordray, chief operating officer of the Education Department’s Federal Student Aid office. “We cannot replace the time stolen from these students, but we can lift the burden of their debt.”
On Wednesday, the Education Department will start emailing borrowers who will get their loans canceled. They won’t need to take any action, and payments already made on the loans will be refunded.
At its height, the chain had dozens of campuses across the country, including in New York, Chicago, Miami and Los Angeles. It was operated for decades by Education Management Corp., which collapsed in 2018 after years of legal trouble.
The company reached a $95.5 million settlement with the Justice Department in 2015 over allegations of illegal recruiting tactics. Soon after, it began closing campuses and later sold the remainder to another company.
The final eight campuses were shuttered last year.
The Biden administration has continued to cancel student loans through several existing programs even as it pursues a wider plan for one-time cancellation. That plan is a follow-up to one that the Supreme Court rejected last year.
In total, the Democratic administration says it has approved the cancellation of almost $160 billion in student loans, including through programs for public workers and those defrauded by their schools.
___
The Associated Press’ education coverage receives financial support from multiple private foundations. The AP is solely responsible for all content. Find the AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.
veryGood! (72883)
Related
- Apple iOS 18.2: What to know about top features, including Genmoji, AI updates
- 5 things workers should know about the new federal ban on noncompete agreements
- Maple Leafs' Sheldon Keefe: Bruins' Brad Marchand 'elite' at getting away with penalties
- Jill Duggar Shares Emotional Message Following Memorial for Stillborn Baby Girl
- Finally, good retirement news! Southwest pilots' plan is a bright spot, experts say
- Kansas’ governor vetoed tax cuts again over their costs. Some fellow Democrats backed it
- Watch 'The Office' stars Steve Carell and John Krasinski reunite in behind-the-scenes clip
- Get Quay Sunglasses for Only $39, 20% Off Miranda Kerr’s Kora Organics, 50% Off Target Home Deals & More
- Meet the volunteers risking their lives to deliver Christmas gifts to children in Haiti
- The Black Dog Owner Hints Which of Taylor Swift’s Exes Is a “Regular” After TTPD Song
Ranking
- Trump suggestion that Egypt, Jordan absorb Palestinians from Gaza draws rejections, confusion
- US growth likely slowed last quarter but still pointed to a solid economy
- I’m a Shopping Editor and I Always Repurchase This $10 Mascara with 43,100+ 5-Star Ratings
- Biden meets 4-year-old Abigail Mor Edan, the youngest American hostage released by Hamas
- North Carolina justices rule for restaurants in COVID
- Indulge in Chrissy Teigen's Sweet Review of Meghan Markle's Jam From American Riviera Orchard
- After 24 years, deathbed confession leads to bodies of missing girl, mother in West Virginia
- The Daily Money: The best financial advisory firms
Recommendation
From family road trips to travel woes: Americans are navigating skyrocketing holiday costs
Florida man charged with murdering girlfriend’s 13-year-old daughter
The Essentials: Mindy Kaling spills on running to Beyoncé, her favorite Sharpie and success
Firefighters fully contain southern New Jersey forest fire that burned hundreds of acres
Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Hi Hi!
Courteney Cox recalls boyfriend Johnny McDaid breaking up with her in therapy
'Outrageously escalatory' behavior of cops left Chicago motorist dead, family says in lawsuit
Jury urged to convict former Colorado deputy of murder in Christian Glass shooting