Monday, June 24, 2024
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Biden Announces $6.1 Billion Student Debt Forgiveness for Art Students

A picture of President Joe Biden
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Biden Announces $6.1 Billion Student Debt Forgiveness for Art Students

Source: Pinterest

President Biden extended his efforts to combat the loan debt of students on May 1st, 2024, by waiving more than $6 billion for a certain class of students.

Students who collected student loans to attend art school in the United States, a private school that closed its doors have recently been assisted by debt forgiveness.

Students Loan Discharged

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317,000 former students of the now-defunct for-profit chain the Art Institutes will have their debt forgiven by the Biden administration, one of the largest group discharges of federal student loans from the Education Department.

The chain of schools was operated by Education Management Corp. (EDMC), and this only applies to students who were enrolled in the art institute between 2004 to 2017.

Misinformation By the Institution

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The students on loan are not bound to take any action. The Education Department will advise the students on what to do. Additionally, students who have made payments regarding their loan repayment will be refunded.

“The institution knows that the students will not get meaningful Jobs after graduating, and yet they were advised wrongly to take loans to sort the school bills,” President Joe Biden stated.

Case Filed Against Fraud

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Debtors of student loans filed defenses against return claims, arguing they were deceived, hoping to get the U.S. government to forgive their debt in the face of legal challenges and worries over accreditation.

This program is the outcome of the student debt organization “I Am Ai,” which has given Art Institute students and graduates access to a support system and information on debt elimination.

The President and Former President Administration

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It has been systematically undermining the debt-relief claims made by numerous students, indicating that their colleges, which are primarily for-profit establishments, deceived them. This is a result of the Joe Biden administration taking charge. 

During the era of the former president, it was declared that it was too easy for students who were in default on their loans to escape their financial responsibilities. Thus, efforts were made to limit and delay loan cancellations for them.

The School Department

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In the student’s defense to repayment clause, which permits the government to cancel federal student loans when universities violate students’ rights and state law.

Also, the Education Department has granted $19.7 billion in discharges for 1.3 million students over the past three years.

The Assisted Plans

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Certain programs, such as the SAVE (Saving on a Valuable Education) Plan, have assisted debtors in determining payments that correspond with their present financial situation.

This repayment option has attracted over 7.5 million borrowers, many of whom qualify for zero percent payments if their income falls below the federal poverty threshold.

Employees Did Not Show Diligence

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The staff admitted to giving students false information on graduate wage data to deceive prospective students into thinking that enrolling at the Art Institutes would guarantee success. 

According to the department, students took out substantial debt loans on pretenses. Many students ceased to make loan payments and participate in their programs.

The Education Secretary Reported

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Education Secretary Miguel Cardona reported, “Far too many for-profit institutions prey upon students, especially first-generation college students, selling them impossible guarantees and flashy brochures.”

“It should be financially advantageous to invest in a college degree or professional qualifications, but far too many families and students have been abused, and this needs to change.”

Education Management Corp Initially A Large Chain

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Before going out of service, EDMC was one of the largest college chains in the United States, enrolling over 150,000 students in programs in education, health sciences, and culinary arts at 106 sites in 32 states and Canada.

As a result of falling enrollment, the company that owned the Art Institutes and many others was obliged to liquidate or close several schools.

Agreement To Sell Some Of the Art Institute

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There was an agreement to sell Dream Centre in 2017. It is an unaffiliated charitable organization in numerous Art Institute sites.

In the process of evaluating the transaction, the Higher Learning Commission, an accreditation authority, had concerns about the educational standards of the colleges and held on to its mark of approval in numerous areas.

New Owners Advertised

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The new owners strongly emphasized the schools’ appropriate certification, which is a need for for-profit businesses to be eligible for government student aid programs. 

Amid the rumors, including the missing millions in federal student financial aid, Dream Centre closed its campuses or liquidated them and filed for bankruptcy.

Kind Gesture Toward the Students

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According to Aaron Ament, president of the National Student Legal Defence Network, this is a significant win for students who attended Art Institute schools under EDMC’s control.

The organization is defending students in Dream Center’s receivership proceedings. Also, offenders will be punished for their actions if the situation of exploiting students continues as it is a very bad act and should not be condoned.