On Wednesday, President Joe Biden announced that his administration approved “$6.1 billion in student debt cancellation for 317,000 borrowers who attended the Art Institutes.” The decision represents one of the most significant discharges of federal student loans.
The Art Institutes, a network of for-profit colleges, closed down in 2023 amid accusations of fraud.
CBS News has additional information:
The latest effort represents President Joe Biden's plan to tackle the nation's $1.7 trillion in student debt after the Supreme Court last year blocked his administration's plan for broad-based college loan forgiveness.
The Art Institutes, which operated branches in cities including Atlanta, Fort Worth, New York and Tampa, shut down permanently in September after the Department of Education found it had misrepresented its graduates' employment rates and salaries. Hundreds of thousands of students had taken out billions in loans to attend the schools, but “got little but lies in return,” U.S. Secretary of Education Miguel Cardona said in a statement on Wednesday.
“We must continue to protect borrowers from predatory institutions — and work toward a higher education system that is affordable to students and taxpayers,” Cardona added.
In a separate statement, Mr. Biden said his administration has forgiven $29 billion in debt for 1.6 million students “whose colleges took advantage of them, closed abruptly or were covered by related court settlements.”
The Department of Education will immediately pause loans identified for discharge, meaning borrowers will not have to make additional payments.
“This ensures that they will not face any further financial demands from these loans during the time needed to process their discharges,” the department announced.
The agency will start notifying the eligible borrowers starting today.
The decision sparked ridicule from critics on X, with one user posting: “This makes no sense. Hunter has shown the nation how easy it is to collect 6 figures per painting without any formal training at all. Why don't they just sell their art like a Biden?”
The official Twitter account of Senate Republicans expressed strong disapproval:
As violent pro-terrorist mobs take over our college campuses, Joe Biden just announced another illegal student loan bailout.
$6.1 BILLION for only 317,000 borrowers who attended Art Institutes —
Instead of standing up to these anti-American mobs, he is rewarding them.
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