Former art students at the nationwide Art Institute chain of schools are now entitled to compensation after allegations of false claims and fraud.
On Wednesday, the Biden administration and the US Department of Education announced that over $6.1 billion would go toward loan forgiveness for approximately 317,000 students enrolled at any of the Art Institute's campuses across the country between January 1, 2004 and October 16, 2017.
Institute of Arts closure completed her campuses last year after investigations found the private, for-profit art school organization lied to prospective students about several factors, including the average graduate employment rate and average salaries earned after graduation by using doctored data and inflated numbers .
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“Art institutes cut off the hopes of students trying to improve their lives through education,” said Richard Cordray, chief operating officer of the Department of Education's office of Federal Student Aid. in a release. “We cannot replace the time stolen from these students, but we can remove their debt burden.”
The DOE claims the art school chain told prospective students that upon graduation, over 80% of alumni found work in their chosen field, but the actual percentage was closer to 57%. Even the Art Institutes were accused of inflating the “average salary” of graduates.
“For example, according to one former employee, one Art Institute campus included professional tennis player Serena Williams' annual earnings to 'flatten the statistics and inflate the program's potential salaries,'” DOE. said.
The Art Institutes settled with the US Department of Justice in 2015 for about $95.5 million after being accused of illegal recruiting tactics and began closing campuses across the country in major cities such as New York, Miami and Los Angeles. At the top of the organization, HAD over 50 Art Institute campuses and a separate online division.
The chain's parent company, Education Management Corporation, all are sold The remaining Art Institutes in October 2017, while all other schools still operating under separate management were closed by September 2023. EDMC submitted for bankruptcy in 2018.
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Former students who borrowed during that period will begin receiving emails from the DOE on Wednesday and will not need to take any action to request refunds, as they will be issued automatically.
“We must continue to protect borrowers from predatory institutions,” U.S. Education Secretary Miguel Cardona said in a release for DOE. “And work toward a higher education system that is affordable for students and taxpayers.”