Last Updated on October 10, 2022
The Art Institutes once made up the second-largest institution of colleges in America.
It has been subject to multiple campus closures and ongoing lawsuits.
As a result, many students wonder about their current student loan debt.
Today, many students are eligible to have their loans completely discharged!
To determine if you qualify, read on to discover what program requirements you meet.
What Happened At The Art Institute?
Between 2016 and 2019, many higher education institutions became forced to close down. The Former owner of the Art Institutes was the Education Management Corporation. The Department of Justice charged them $11 billion for federal funding fraud. The DOJ has accused Education Management Corporation of fraudulent activities.
Some of these accusations include false marketing and misleading recruitment tactics. Another notable accusation made against the corporation was massive price hikes in tuition.
The Education Management Corp agreed to settle for $95 million. This prevented any further legal actions against it. As a result, almost 50 schools and campuses closed. The closure of these schools entitles certain students to loan forgiveness options.
This news offers some students a flicker of hope.
Today, only eight campuses of the Art Institutes are operational. These schools are also under pressure and may close as well. The following information pertains to all Art Institute students, both past and present. All students need to be aware of the options that are available to them.
How Does Art Institute Loan Forgiveness Work?
Many students struggle to repay their student loan debt. For some students, there are increasing reasons for optimism. If your Art Institute campus closed, you have several options available. Many students have their loans wiped out after applying for loan forgiveness programs.
If you hold a loan with the Art Institute or the federal government, you have several choices. If eligible, students may have their loans completely forgiven.
Looking for more loan forgiveness guides? Here are other articles we wrote protecting other universities:
What Programs Are Available For Student Loan Forgiveness?
Two programs are available to students caught in Education Management Corporation’s downfall. Apply for loan forgiveness for federal student loans through either of the following:
- The Closed School Student Loan Program
- The Borrower’s Defense Against Repayment Program (BDAR)
Borrowers Defense To Repayment Program
A very effective option for loan forgiveness is not talked about often. The Borrowers Defense to Repayment Program or BDAR is one such program. This program is excellent for eligible students. The advantage of this loan forgiveness program is that it can erase all student loan debt.
To start this process, students will need to submit a BDAR application. Students with private loans are not eligible for this program. Also, students must meet the following requirements:
- Be able to prove that the Art Institute misled you during your enrollment.
- Prove that the Art Institute violated state law related to your federal loan.
- Prove the services that the Art Institute promised to provide were false claims.
The Educational Management Corporation is guilty of fraudulent behaviors. Any student who owes back student loans from the Art Institute is eligible for the BDAR program. This means students have the opportunity to have their loans discharged in full!
Closed School Loan Discharge Program
A second program for loan forgiveness is the Closed School Loan Discharge Program. This program allows students with federal loans to receive help with loan forgiveness. Popular federal student loans include both direct and Perkins loans.
Students with private student loans do not qualify. To be eligible for this program, you must meet all the following requirements:
- You must have been an enrolled student at the time of the school’s closure.
- You transferred your school credits to another institution. The new program you enrolled in must be like the program you were in at the Art Institute.
- You must have attended the Art Institute 120 days before its closure date.
- You have not completed your education program during the time the school closed.
If eligible for this program, you should already know. You should have already received an application from your loan officer. If, for some reason, you did not receive an application, contact your loan servicer to learn more.
Private Student Loan Forgiveness Help
It is sad that not every student receives the help they should. Students with private student loans struggle the most. Banks and private businesses that offer personal loans seldom give loan forgiveness help.
There is a lack of aid for students with private student loans. Despite this, it is important to continue paying private student loan debt.