Officials announced on Wednesday that the Biden administration will erase $6.1 billion of federal student debt from 317,000 former students of The Art Institutes. The Art Institutes was a for-profit art college chain which has since closed.

The Art Institute of Charlotte and The Art Institute of Raleigh Durham on the American Tobacco Campus, in downtown Durham are both campuses of Miami International University of Art and Design.

The discharge includes those who attended any Art Institute campus from Jan. 1, 2004 to Oct. 16, 2017. This was when Education Management Corp., now bankrupt, owned approximately 50 of these schools.

In a recent statement, President Joe Biden stated that “This institution falsified information, knowingly misled its students, and defrauded borrowers into taking mountains of debt with no promising career prospects after their studies.”

The U.S. Education Department began notifying eligible borrowers on Wednesday that their debts have been forgiven. The borrowers do not have to take any actions. The Department of Finance said that it would pause all loan payments, and refund any past federal payments made by those who are eligible for the forgiveness.

An Education Department review found that The Art Institutes, and their parent company, misrepresented to prospective students the employment rates and salaries after graduation and the career services they offered during this 13-year period. Art Institute courses included design, digital media and culinary arts.

It said that the Education Department reviewed independently evidence from attorneys general’s offices in Iowa Massachusetts and Pennsylvania. Previously, attorneys general from the various states had investigated The Art Institutes of Chicago and EDMC and filed lawsuits.

In a recent statement, U.S. Education Secretary Miguel Cardona stated that “for more than a ten-year period, hundreds of thousands hopeful students borrowed billions of dollars to attend The Art Institutes but got little in return except lies.”

He said, “That’s over today.”

The department stated that school records revealed the institutes had inflated and falsified employment rates for students in their fields of study, by excluding graduates who did not stay in the art field and claiming they were in the art when there was no clear information about employment.

The Art Institute has a median in-field employment of 57% and not the 82% advertised by the schools.

The department also said that this included inflated average salaries for graduates of different campuses by using outliers, like Serena Williams, a tennis star, former Fashion Art Institute student, and her annual income.

The Department also found that the institutes used false data on salaries, which did not match what graduates claimed.

Education Department claims that the Art Institutes overstated their relationships with employers, and didn’t offer career services to students after they graduated.

The Art Institutes’ borrowers were left with high debts that their falsely-promised outcomes did not cover. The Education Department reported that many students had dropped out of school and defaulted in their loan payments.

EDMC sold the Art Institute campuses to The Dream Center in Los Angeles, a Los Angeles based organization. In August 2019, there were only eight remaining schools that were open for enrollment. They are owned by a newly formed foundation. The eight final institutions in Florida, Georgia Texas and Virginia Beach closed in 2023.

The Education Department has announced one of its largest student loan forgiveness programs.

Biden made it a promise during his campaign to reduce student loan debt. According to the Department of Education, Biden’s administration has cancelled nearly $160 billion worth of debt for almost 4.6 million Americans.

The Art Institutes is one of the colleges targeted for debt relief. The department has deemed that The Art Institutes took advantage, was abruptly closed, or covered by court settlements.

Biden announced Wednesday that the administration had approved almost $29 billion of forgiveness for 1.6 millions borrowers who attended such schools.

The money included $5.8billion for the students of Corinthian Colleges. This was a set of for-profit schools that Kamala Harris, then California’s Attorney General, sued while she served as Vice President.

Cardona stated Wednesday that “we must continue to protect the borrowers from predatory lenders” and work towards a higher education system which is affordable for students and taxpayers.