The Biden administration has announced to alleviate the financial burdens of 317,000 former students who attended The Art Institutes, a once-prominent network of for-profit schools. The administration plans to waive a staggering $6.1 billion in student debt, bringing a sigh of relief to many who were ensnared by deceptive practices.
The forgiveness initiative targets individuals who enrolled at any of The Art Institutes' numerous campuses nationwide during the period spanning from January 1, 2004, to October 16, 2017. During these years, the US Department of Education uncovered a distressing pattern of deceit perpetrated by the schools and their parent company, the Education Management Corporation (EDMC). This deceit, characterized as "pervasive and substantial," involved misleading prospective students regarding employment prospects, salaries post-graduation, and the efficacy of career services.
US Secretary of Education Miguel Cardona minced no words, stating, "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." He underscored the imperative of shielding borrowers from predatory practices and advocated for a more accessible higher education system.
The Education Department's investigation revealed egregious fabrications, including falsified average salaries among graduates. Shockingly, one campus reportedly included professional tennis player Serena Williams' income in their statistics to inflate potential program salaries.
Importantly, eligible borrowers need not navigate the arduous formalities of the loan relief process; forgiveness will be automatic. This streamlined approach aims to expedite relief for those who have already endured substantial financial hardship.
The Art Institutes' tumultuous saga saw its climax with the sale of remaining campuses in October 2017, followed by their closure under new ownership in September 2023, as confirmed by the Education Department. The demise of the institution culminated in the bankruptcy filing of EDMC in 2018, once partially owned by financial giant Goldman Sachs, which has since divested its stake.
As per reports, a spokesperson for Goldman Sachs clarified that the institution had severed ties with EDMC over a decade ago, distancing itself from the controversy.
