Attorney General Michelle Henry announced that nearly 18,000 Pennsylvania students who attended The Art Institute between 2004 and 2017 will have their loan balances discharged. This move is part of a federal action to discharge over $6 billion in student loan debt nationwide.
The federal action involves more than $6.1 billion in automatic student loan relief for nearly 317,000 borrowers enrolled at any Art Institute campus from January 1, 2004, through October 16, 2017. Pennsylvania students will receive over $345 million of this relief.
The U.S. Department of Education determined that The Art Institutes and its parent company, Education Management Corporation (EDMC), misled prospective students about post-graduation employment rates, salaries, and career services during this period. EDMC sold its remaining campuses in October 2017, and all existing campuses closed under new ownership by September 2023.
"For-profit colleges have a long history of misleading students for a dollar," said Attorney General Michelle Henry. "The Art Institutes burdened thousands of students in Pennsylvania with over $300 million in debt based on promises of lucrative job opportunities."
This announcement highlights the partnership between the Department of Education and the Pennsylvania Office of Attorney General to protect student loan borrowers from predatory schools. Evidence provided by the offices of attorney generals from Pennsylvania, Iowa, and Massachusetts assisted the Department's decision.
Federal Student Aid Chief Operating Officer Richard Cordray praised the efforts: "Thanks to the diligent work of the Pennsylvania Attorney General’s Office in collaboration with the U.S. Department of Education, those borrowers will finally receive the student loan relief they deserve."
Investigations revealed widespread misrepresentations by The Art Institutes regarding employment rates and career services offered to graduates. Advertised partnerships with employers were exaggerated or nonexistent according to evidence collected.
Eligible borrowers will automatically receive relief without needing to apply for borrower defense. Notifications began this week informing eligible individuals about their approved loan discharges while loans identified for discharge are paused immediately.
Borrowers can learn more about borrower defense at StudentAid.gov/borrower-defense.