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In a move that highlights the ongoing issues within the for-profit education sector, the Biden administration has announced a plan to forgive over $6.1 billion in student debt for former students of The Art Institutes. This decision will impact 317,000 individuals who were enrolled at various Art Institute campuses between 2004 and 2017.

The U.S. Department of Education, after reviewing evidence provided by several state attorneys general, found that The Art Institutes and its parent company, the Education Management Corporation (EDMC), engaged in pervasive and substantial misrepresentations. These misrepresentations included false information regarding post-graduation employment rates, salaries, and career services.

U.S. Secretary of Education Miguel Cardona emphasized the need to protect borrowers from predatory institutions like The Art Institutes. He condemned the actions of the for-profit schools, stating that they provided little but lies to hopeful students who borrowed billions to attend their campuses. Cardona called for a higher education system that is affordable for both students and taxpayers.

The Education Department revealed that The Art Institutes falsified average salaries among graduates, using deceptive tactics to attract students. For instance, the department cited an example where a campus included professional tennis player Serena Williams’ income in their statistics to inflate potential program salaries. These manipulative practices underscore the need for tighter regulations within the for-profit education sector.

Eligible borrowers who attended The Art Institutes during the specified time frame will receive debt forgiveness automatically. This decision aims to provide relief to individuals who were defrauded by the for-profit schools, regardless of whether they went through the formal process for loan forgiveness. The move comes after The Art Institutes’ parent company, EDMC, sold its remaining campuses and filed for bankruptcy in 2018.

The student debt forgiveness program for former Art Institutes students sheds light on the deceptive practices that have plagued the for-profit education sector. As policymakers continue to address issues of affordability and accountability in higher education, it is essential to hold institutions accountable for misleading students and burdening them with insurmountable debt. The scandal serves as a stark reminder of the importance of protecting borrowers and reforming the education system to ensure that all students have access to quality, affordable education.

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