Biden Approves $6.1 Billion in Student Debt Cancellation for More Than 300,000 Americans

President Joe Biden will forgive approximately $6.1 billion in student debt for more than 300,000 former students at The Art Institutes, the White House announced on Wednesday.

The debt relief will apply to borrowers who enrolled at any of the campuses belonging to The Art Institutes, a private-for-profit system of art schools across the country, between Jan. 1, 2004, and Oct. 16, 2017, according to a White House statement.

The administration is using its authority under an existing federal student loan program, known as borrower defense to repayment, to wipe out the loans on the basis that borrowers were defrauded by their college.

All relief will be automatically applied to the students, regardless of whether or not they have applied for borrower defense, the administration said.

The billions of dollars in automatic student loan relief are being granted following a review of the now-defunct network of for-profit colleges by the Department of Education (DOE).

Officials examined evidence provided by the attorney general offices of Iowa, Massachusetts, and Pennsylvania, all of whom had bought lawsuits against The Art Institutes and its parent company, Education Management Corporation (EDMC), according to a press release from the department.

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DOE officials ultimately found that the institute and its parent company “engaged in widespread and pervasive substantial misrepresentations that deceived students about the value they would be receiving from their education” and made “pervasive and substantial misrepresentations to prospective students about postgraduation employment rates, salaries, and career.”

School ‘Falsified Data, Knowingly Misled Students’

Specifically, the DOE said the now now-defunct chain of schools advertised that more than 80 percent of its graduates obtained employment related to their fields of study within six months of graduation, however, their records showed The Art Institutes had drastically inflated its advertised employment rate.

Elsewhere, advertisements containing fake employment rates also displayed “inaccurate average salaries” that graduates earned from their in-field positions, which the DOE said was based on flawed data.

The Art Institutes also “exaggerated” its partnerships with employers in order to entice students, and in fact had a “negative reputation” the DOE said.

“The Art Institutes preyed on the hopes of students attempting to better their lives through education,” said Federal Student Aid Chief Operating Officer Richard Cordray. “We cannot replace the time stolen from these students, but we can lift the burden of their debt. We remain committed to working with our federal and state partners to protect borrowers.”

In a statement announcing the latest debt relief, President Biden said The Art Institutes and its parent company had “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 Democrat also used the announcement to criticize his predecessor and Republican presidential rival, Donald Trump, whom he accused of having “looked the other way when colleges defrauded students and borrowers.”

Biden Takes Aim at Trump

President Biden went on to tout his work to wipe out student debt. Nearly $160 billion in student loan debt has been canceled for nearly 4.6 million borrowers during his time in office.

That marks roughly 10 percent of all outstanding federal student loan debt, CNN reports.

Wednesday’s announcement marks one of the largest group discharges made under the borrower defense program, according to CNN.

As a result, the debt relief plans have faced a multitude of lawsuits. In June, the Supreme Court blocked a broader initiative to cancel up to $20,000 of student debt per student, or $430 billion in student loan debt in total.

In announcing the latest debt relief on Wednesday, President Biden said it builds on the work his administration has done to “fix broken student loan programs and bring higher education more in reach.”

“We will never stop fighting to deliver relief to borrowers, hold bad actors accountable, and bring the promise of college to more Americans,” he concluded.