The White House is cancelling student debt for about 317,000 people who attended The Art Institutes, the now-shuttered system of art schools that closed its last locations in 2023.

The loan cancellation will provide about $6.1 billion worth of relief for students that were "knowingly misled" by the institution, President Joe Biden said in a statement.

What You Need To Know

  • The White House is cancelling student debt for about 317,000 people who attended The Art Institutes system of schools, providing about $6.1 billion in relief

  • Relief will be available to borrowers who enrolled at any Art Institutes school between Jan. 1, 2004 and Oct. 16, 2017

  • The Art Institutes were found to have repeatedly misrepresented post-graduation employment and salary prosepcts for its students

  • The Biden administration has approved about $160 billion in loan relief for nearly 4.6 million people, including $28.6 billion for about 1.6 million people who were duped by their schools

"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," Biden said. "We will never stop fighting to deliver relief to borrowers, hold bad actors accountable, and bring the promise of college to more Americans."

The relief is provided to borrowers who enrolled at any Art Institutes school between Jan. 1, 2004 and Oct. 16, 2017. After a series of investigations from state attorneys general of Iowa, Massachusetts and Pennsylvania, the Department of Education found that The Art Institutes and its parent company, Education Management Corporation "made pervasive and substantial misrepresentations to prospective students about postgraduation employment rates, salaries, and career services during that time." 

“For more than a decade, hundreds of thousands of hopeful students borrowed billions to attend The Art Institutes and got little but lies in return. That ends today — thanks to the Biden-Harris Administration’s work with the attorneys general offices of Iowa, Massachusetts and Pennsylvania,” said U.S. Secretary of Education Miguel Cardona. “We must continue to protect borrowers from predatory institutions — and work toward a higher education system that is affordable to students and taxpayers.”

The dominoes began falling at The Art Institutes in 2015 and 2016, when a total of 19 campuses were closed. A rash of sales and closures soon followed, and the last eight Art Institutes system schools — which had separated from Education Management Corporation — shut their doors in 2023.

Evidence from the investigations showed that The Art Institutes inflated the rates of graduates working within their field of study, inflated salaries (including, in one case, using the annual income of tennis legend, media mogul and Art Institute of Fort Lauderdale grad Serena Williams to over-inflate potential salaries) and exaggerated the partnerships it had with prospective employers — many of whom would refuse to hire Art Institute grads, according to the Education Department.

All of these misrepresentations and lies brought students to the schools under false pretenses for years, leading them to take out loans they would effectively be unable to pay back from working in their chosen field of study, the department said.

The loan cancellations will automaticaly provide relief to borrowers harmed by The Art Institutes, even for those who haven’t yet applied for borrower defense, and the Department of Education will start notifying eligible borrowers on Wednesday. It will also pause loans identified for forgiveness, so borrowers won’t face further demands for payment, and payments made to the Department of Education on related loans will be refunded.

So far, the Biden administration has approved about $160 billion in loan relief for nearly 4.6 million people, including $28.6 billion for about 1.6 million people who were duped by their schools, according to the White House.