The Biden administration announced a new round of student debt loan forgiveness, this time for $6.1 billion. The measure will benefit 317,000 people who attended The Art Institutes, for-profit schools that shut down last year amid allegations of fraud.
The institution operated in different cities across the country, including Atlanta, New York and Tampa. It closed its doors permanently last September after the Department of Education determined it had misrepresented its graduates' employment rates and salaries.
"We must continue to protect borrowers from predatory institutions — and work toward a higher education system that is affordable to students and taxpayers," said Education Secretary Miguel Cardona in a statement following the announcement.
In another statement, Biden highlighted that his administration has so far forgiven $29 billion in debt to 1.6 million students "whose colleges took advantage of them, closed abruptly or were covered by related court settlements." More generally, it has forgiven over $160 billion for over 4.5 million borrowers.
The announcement comes less than a month after the White House's last round of debt cancellation, which amounted to $7.4 billion and benefited 277,000 borrowers. Over 200,000 of them were enrolled in the SAVE plan, while an additional 65,000 are in "income-driven repayment plans and 4,600 through fixes to Public Service Loan Forgiveness."
The government intended to expand the measures last year but the Supreme Court rejected the program, which would have canceled up to $20,000 for low and middle-income borrowers for an estimated total of $430 billion.
The Biden administration has been since announcing small measures that circumvent Congressional or court approval such as this one. He has also announced a new, broader plan, to to provide student debt cancellation for over 30 million people. The measure would cancel up to $20,000 of accrued interest regardless of income.
Single people making less than $120,000 and couples making less than $240,000 enrolled in an income-driven repayment plan would have their interest forgiven. This relief is aimed at addressing the nation's $1.77 trillion in student debt.
According to the Department of Education, The Art Institutes falsely claimed that 80% of its graduates found jobs in their fields less than six months after graduating. It also misrepresented its graduates' earnings and estimated incomes. In reality, the graduates who found jobs in their fields was about 57%. "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," the White House said.
"We will never stop fighting to deliver relief to borrowers, hold bad actors accountable, and bring the promise of college to more Americans," it concluded.
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