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WASHINGTON (AP) — 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.
“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 Joe Biden said in a statement.
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.
The department says it’s taking action after reviewing evidence from the attorneys general of Massachusetts, Iowa and Pennsylvania, which previously investigated complaints of fraud and sued the for-profit chain.