On Thursday, the Education Department indicated that former students to the various defunct arts schools who remained burdened with federal loans might have the debt forgiven.
Students of closed Art Institutes seek loan forgiveness
So far, the agency has expanded the eligibility period for former Art School students to have their loans forgiven through the closed-school discharge program. Usually, borrowers are eligible if they enrolled on approved leave or if they withdrew within four months of the school closing. However, the department has agreed to extend the period to almost a year for the former Art Institute students at the five locations.
The move to extend the period comes as a result of a lawsuit filed in October by former students of Colorado’s Art Institute as well as those of the Illinois Institute of Art. The students brought a suit against the education department and the Education Secretary Betsy DeVos. According to the suit, the students accuse the agency of offering them loans despite the department is aware that the schools were not accredited, and thus the students were not eligible to receive the loans.
Art Institutes lost accreditation in 2018
National Student Legal Defence Network attorney Eric Rothschild stated that the expansion of the eligibility window to January 2018 will do justice for very many students. He says that the Art Institute of Colorado and Illinois Institute off Art deceived students even after they were aware that they had lost accreditation in January 2018. Therefore the former students deserve relief that indicates then the extent of the deception.
According to documents released last October by the House Education Committee, students at the Art Institute of Michigan, the two Colorado Art Institutes, Illinois Institute of Art in Chicago as well as Schaumburg received federal aid of around $10.7 million in the spring semester of 2018.
The Dream Centre Education Holdings, which owns the institutes, deceived students by not informing them about the status. This was despite having clear instructions from its accreditor to spread the word on the same.