317,000 former students of the now defunct for-profit Art Institutes woke up Wednesday to news that President Biden has ordered the federal government to cancel $6.1 billion they owed.
“Today, my Administration is approving $6.1 billion in student debt cancellation for 317,000 borrowers who attended the Art Institutes,” Biden said in a statement.
The president in his statement said Art Institutes, which was based in Atlanta with locations around the country, knowingly misled students and falsified data and cheated them into “taking on mountains of debt without leading to promising career prospects at the end of their studies.”
“Over the last three years, my Administration has approved nearly $29 billion in debt relief for 1.6 million borrowers whose colleges took advantage of them, closed abruptly, or were covered by related court settlements, compared to just 53,500 borrowers who had ever gotten their debt cancelled through these types of actions before I took office. And in total, we have approved debt cancellation for nearly 4.6 million Americans through various actions,” Biden said.
The president’s order covers students who attended Art Institute schools between January 1, 2004 and October 16, 2017.
The U.S. Department of Education said in separate news release that they will start notifying the 317,000 students today (May 1) that they are approved for discharge from the loans and that “borrowers do not need to take any action.”
The department said it will take immediate steps to pause loans identified for discharge so borrowers do not make further payments.
“When their discharges are processed, borrowers will see any remaining loan balances adjusted and credit trade lines deleted. Payments borrowers made to the Department on their related federal student loans will also be refunded,” the department said in its news release.
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