317K People See Their Student Loans Erased

The Biden administration on Wednesday said it will cancel $6 billion in student loans for people who attended the Art Institutes, a system of for-profit colleges that closed the last of its campuses in 2023 amid accusations of fraud. Saying the chain lured students with "pervasive" lies, the Education Department is invoking its power to cancel student loans for borrowers who were misled by their colleges, reports the AP. The chain's tactics led borrowers to borrow high amounts of debt for programs that didn't pay off, the department said. The details:

• A standout quote: "This institution falsified data, knowingly misled students, and cheated borrowers into taking on mountains of debt without leading to promising career prospects at the end of their studies," President Biden said in a statement.
• The specifics: The Education Department will automatically erase loans for 317,000 people who attended any Art Institute campus between Jan. 1, 2004, and Oct. 16, 2017. Borrowers won't need to take any action, and payments already made on the loans will be refunded.
• What the Art Institutes wrongly promised: Prospective students were told that more than 80% of graduates found jobs in their fields of study, but that was largely based on doctored data, the Education Department said. The true employment rate was below 57%. Campuses also advertised graduate salaries that were based on fabricated data and included extreme outliers to make averages look better, the department said.
• One wild example: One campus included the annual salary of tennis star Serena Williams to skew the average salary, investigators found. Williams studied fashion at the Art Institute of Fort Lauderdale in Florida.
• The chain's demise: The company reached a $95.5 million settlement with the Justice Department in 2015 over allegations of illegal recruiting tactics. Soon after, it began closing campuses and later sold the remainder to another company. The final eight campuses were shuttered last year.
• Loan forgiveness under Biden: In total, the Democratic administration says it has approved the cancellation of almost $160 billion in student loans through a variety of existing programs. Among that total, $28.7 billion has been canceled for those who were cheated by their colleges or went to campuses that suddenly closed.

(More loan forgiveness stories.)