Biden cancels $6 billion in student loans for 317,000 Americans scammed by art school and brings total handouts to more than $160 billion before the 2024 election

The Biden administration announced Wednesday that it has forgiven $6 billion in student debt for borrowers who attended arts institutions between 2004 and 2017.

Numerous legal actions accused the US university chain of using “pervasive” methods to entice students, including using one-time student Serena Williams’ multimillion-dollar salary as a means to skew average alumni wages.

President Joe Biden’s latest handout brings total forgiveness to $160 billion for 4.6 million borrowers ahead of the November election. It’s a doubling down on Biden’s pledge to wipe out student debt after the Supreme Court ruled he couldn’t take the sweeping action he wanted earlier in his administration.

“This institution has falsified data, knowingly misled students, and deceived borrowers into taking on mountains of debt without leading to promising career prospects at the end of their studies,” the president said in a statement about the latest wave of relief from student loans.

Biden’s education department will automatically cancel the loans of 317,000 people who attended an Art Institute campus between January 1, 2004 and October 16, 2017. Recipients of the aid will receive emails confirming forgiveness on Wednesday.

The Biden administration said Wednesday 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 allegations of fraud.

The latest action comes after the department reviewed evidence from the attorneys general of Massachusetts, Iowa and Pennsylvania, all of which previously investigated fraud complaints and sued the profit chain.

According to the department’s findings, the chain misled students about graduate success and about employment partnerships that would help students find jobs after graduation.

The chain told potential students that more than 80 percent of graduates found jobs in their field, but that was largely based on manipulated data, the Ministry of Education said. The actual labor participation rate was below 57 percent.

Campuses also advertised graduate salaries that were based on fabricated data and included extreme outliers to make averages look better, the department said.

Tennis icon Williams studied fashion at an Arts Institute campus in Florida.

The chain’s tactics led borrowers to borrow large amounts of debt for programs that were not profitable, the department said.

“The arts institutions benefited from the hopes of students seeking to improve their lives through education,” said Richard Cordray, chief operating officer of the Department of Education’s Federal Student Aid Office.

“We cannot replace the time stolen from these students, but we can ease the burden of their debt.”

On Wednesday, the Department of Education will begin emailing borrowers whose loans are being canceled. They do not have to take any action and payments already made on the loans will be repaid.

At its peak, the chain had dozens of campuses across the country, including in New York, Chicago, Miami and Los Angeles. It was operated for decades by Education Management Corp., which filed for bankruptcy in 2018 after years of legal troubles.

The company reached a $95.5 million settlement with the Justice Department in 2015 over allegations of illegal recruitment tactics. Soon after, it began closing campuses and later sold the rest to another company.

The last eight campuses closed last year.

Numerous legal actions have accused the college of using “pervasive” methods to entice students, including using one-time student Serena Williams’ multimillion-dollar salary as a means to skew average alumni wages.

“While my predecessor looked the other way as colleges defrauded students and borrowers, I pledged to take this on head-on to provide borrowers the relief they need and deserve,” Biden said in a statement Wednesday morning, taking a swipe at former President Donald. Trump.

“Over the past three years, my administration has approved nearly $29 billion in debt relief for 1.6 million borrowers whose colleges were abused, abruptly closed, or subject to related court settlements, compared to just 53,500 borrowers who ever defaulted on their debts . canceled (sic) by actions like this before I took office,” he continued.

“And in total, through various actions, we have approved debt forgiveness for nearly 4.6 million Americans.”

The Biden administration has continued to cancel student loans through several existing programs, even as it pursues a broader one-time cancellation plan. That plan is a follow-up to a plan that the Supreme Court rejected last year.

In all, the Democratic administration says it has approved the cancellation of nearly $160 billion in student loans, including through programs for government workers and those defrauded by their schools.