The Biden administration will cancel $6 billion in student loans for people who attended the Art Institutes, for-profit colleges that closed the last of its campuses in 2023.
Saying the chain lured students with “pervasive” lies, the Department of Education is using its power to cancel student loans for borrowers who were misled by their colleges, the Associated Press reports.
Loans for 317,000 people who attended any Art Institute campus between Jan. 1, 2004, and Oct. 16, 2017, will automatically be erased.
The Department of Education reviewed evidence from the attorneys general of Pennsylvania, Iowa and Massachusetts. They concluded that the schools and its parent company made “pervasive and substantial” misrepresentations to prospective students about post-graduation salaries and employment rates, CNBC reports.
The Education Department will start emailing borrowers who will get their loans canceled on Wednesday. They won’t need to take any action, and payments already made on the loans will be refunded, the AP says.
The Pittsburgh Art Institute closed in 2019 after a sale of the school fell through.
The Associated Press contributed to this report.
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