Biden forgives $6.1 billion in student debt

CBS News

The Biden administration is forgiving $6.1 billion in student debt for 317,000 people who attended The Art Institutes, a for-profit chain of schools that shut down last fall amid allegations of fraud.
The latest effort represents President Joe Biden’s plan to tackle the nation’s $1.7 trillion in student debt after the Supreme Court last year blocked his administration’s plan for broad-based college loan forgiveness.
The Art Institutes closed suddenly in September, impacting 1,700 students, according to the New York Times.
Other campuses operated by the school had shut down in 2019 or earlier, according to the The Art Institutes’ website.
The Education Department said it is automatically forgiving $6.1 billion in student debt for 317,000 people who borrowed money to attend any Art Institutes campus on or after January 1, 2004, through October 16, 2017.
No, borrowers don’t need to do anything, the Education Department said.
The department will start notifying eligible borrowers on May 1 that they have been approved for their debt to be discharged.
The Education Department said it will immediately pause loans identified for discharge, meaning that borrowers should not have to make additional payments.

NEUTRAL

The Biden administration is waiving 317,000 students’ $6.11 billion in student loan debt. The Art Institutes was a for-profit chain of schools that closed its doors last autumn due to fraud allegations.

After his administration’s plan for widespread college loan forgiveness was blocked by the Supreme Court last year, President Joe Biden’s latest endeavor represents his plan to address the nation’s $1.7 trillion in student debt.

The Department of Education discovered that the Art Institutes, which had branches in Atlanta, Fort Worth, New York, Tampa, and other cities, had misrepresented the employment rates and salaries of its graduates. As a result, the institutes closed their doors permanently in September. Millions of dollars had been borrowed by hundreds of thousands of students to attend the schools, but they “got little but lies in return,” according to U.S. s. Miguel Cardona, the secretary of education, stated in a statement on Wednesday.

In addition, Cardona stated, “We must keep defending borrowers against predatory institutions and strive toward an affordable higher education system for both taxpayers and students.”.

In an independent declaration, Mr. Biden claimed that his administration had waived $29 billion in student loan debt for 11.6 million students “whose universities exploited them, shut down unexpectedly, or were compensated by associated court settlements.”. “.

Together with the debt relief it had previously announced, the Biden administration said that it had forgiven over $160 billion for approximately 4 point 6 million borrowers, including the amount that was announced today.

Following a six-month period of investigation, the Education Department discovered that The Art Institutes had made a false claim stating that eighty percent of its graduates had obtained employment in their fields of study. As per the department, the actual percentage never went above 57 percent.

It is also purported that the school annualized the estimated incomes of its graduates who held temporary jobs and falsified information about the earnings of its graduates. For instance, the department said that one campus calculated the average income of graduates by factoring in tennis player Serena Williams’ annual salary. Williams attended the Art Institute of Fort Lauderdale.

As per the New York Times, 1,700 students were affected by the abrupt closure of the Art Institutes in September. The organization was shut down following a $95 point5 million settlement with federal regulators over fraud allegations. The Art Institutes website states that additional campuses run by the institution closed in 2019 or earlier.

Who is eligible for the forgiveness of student loans?

317,000 people who borrowed money to attend any Art Institutes campus on or after January 1, 2004, through October 16, 2017, will have their $6.11 billion in student debt automatically forgiven, according to the Education Department.

Do borrowers have any further steps to take?

The Education Department said that borrowers are not required to take any action.

Beginning on May 1, the department will notify qualifying borrowers that their request for a debt discharge has been granted.

Do debtors have to keep making payments?

The Education Department announced that it will halt loans that are designated for discharge right away, so borrowers shouldn’t be required to make any more payments.

“This guarantees that they won’t encounter any additional monetary obligations from these loans while we handle their discharges,” the organization continued.

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