Biden Cancels Billions In Student Debt To Bankrupt Art Institute Chain

President Joe Biden has cancelled $6.1 billion in loans taken out by students at the Art Institutes, the network of for-profit colleges that shuttered in September 2023.

Biden announced the debt cancellation in a White House statement in his latest effort to reduce student debt. The declaration came as art students and faculty, critical of his support for Israel, have joined in campus protests in support of Palestinians in Gaza.

“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,” Biden said in a White House statement.

The president cancelled debt for some 317,000 borrowers who attended the Art Institutes, which had campuses in Miami, Atlanta, Tampa, Virginia Beach, and several Texas cities including Austin, Dallas, Houston, and San Antonio at the time of last year’s closures. His remarks refer to the former company’s declining fortunes over the past decade, during which it faced falling enrollment numbers, claims of fraud, and a whistleblower lawsuit. Several of its branches also lost their accreditation.

Debt-ridden students protest the Art Institutes. Photo by Arya Nymeria, courtesy of the I am AI Facebook group.

Debt-ridden students protest the Art Institutes. Photo by Arya Nymeria, courtesy of the I am AI Facebook group.

Established in 1970, the Art Institutes were previously operated by Education Management Corporation (EDMC), a company that also operated for-profit schools under the umbrellas of Argosy University, Brown Mackie College, and South University. By 2012, the organization was operating 50 campuses across the U.S.

Around 2015, the beleaguered Art Institutes began shuttering campuses—15 were closed that year and four others in 2016. The remaining Art Institutes were sold by EDMC to the Dream Center foundation, a religious group based in Los Angeles in 2017, which shuttered more campuses, including multiple locations of the former Argosy University’s Art Institute of California in cities such as Los Angeles, San Francisco, and Sacramento. It was not immediately clear if former art students at those schools were included in Biden’s latest announcement.

By 2023, when the remaining Art Institutes abruptly closed, they were no longer affiliated with either EDMC or Dream Center.

In his remarks, Biden also took a swipe at former President Donald Trump who will challenge him in the upcoming 2024 presidential election.

“While my predecessor looked the other way when colleges defrauded students and borrowers, I promised to take this on directly to provide borrowers with the relief they need and deserve,” Biden said. “We will never stop fighting to deliver relief to borrowers, hold bad actors accountable, and bring the promise of college to more Americans.”

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