A general view of the atmosphere during the Art Institute of Atlanta’s opening ceremony at the Riverside EpiCenter on June 17, 2022 in Austell, Georgia.
Marcus Ingram | Getty Images
The Biden administration announced Wednesday that it would forgive more than $6.1 billion in student debt for 317,000 former students of the Art Institutes, the formerly giant chain of for-profit schools.
The relief will go to borrowers who enrolled at one of the Art Institute’s dozens of campuses across the country between Jan. 1, 2004, and Oct. 16, 2017.
The U.S. Department of Education, which reviewed evidence provided by the attorneys general of Iowa, Massachusetts and Pennsylvania, concluded that the schools and its parent company, Education Management Corp., or EDMC, had made “widespread and material” misrepresentations to prospective students about post-graduation employment rates, salaries and career services.
“For more than a decade, hundreds of thousands of hopeful students borrowed billions to attend the Art Institutes and got nothing but lies in return,” said the U.S. Secretary of Education, Miguel Cardona, in a press release.
“We must continue to protect borrowers from predatory institutions – and work toward a higher education system that is affordable for students and taxpayers,” Cardona added.
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The Education Ministry said art institutes falsified graduates’ average salaries, among other abuses.
“For example, according to a former employee, an Art Institute campus included the annual income of professional tennis player Serena Williams to ‘distort statistics and overinflate the program’s potential salaries,'” the department said.
Eligible borrowers will automatically receive forgiveness regardless of whether they have completed the formal loan relief process for defrauded borrowers.
EDMC sold its remaining Art Institute campuses in October 2017 and all existing schools closed under separate ownership in September 2023, the Department of Education said.
EDMC filed for bankruptcy in 2018. At one point, Goldman Sachs owned a significant stake in EDMC.
In response to a request for comment on the news, a Goldman Sachs spokesperson said the firm exited investing more than 10 years ago.
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