A lawsuit filed in October of 2019 will allow a number of the 26,000 affected students opportunities to possess their loans canceled through the Education of Department’s closed-school discharge program. Last year, a university franchise that operated 40 colleges across the us shuttered its campuses abruptly and left thousands of scholars with crushing student loan debt and axed academics plans. Now, following a lawsuit filed in October of 2019, a number of these students are becoming an opportunity at loan forgiveness.
More than 26,000 students were enrolled within the college network owned by the Christian nonprofit Dream Center Education Holdings. The nonprofit’s holdings included Argosy University, South University, and therefore the Art Institutes.
In the new agreement, some Art Institute students will have their debts canceled through the Education of Department’s closed-school discharge program, the Washington Post reports. Borrowers are normally eligible to invite debt forgiveness if they were enrolled, on approved leave, or had withdrawn within four months of their college closing. But in today’s announcement, the department guaranteed that this point frame are going to be extended to just about a year.
The school network began to crumble within the summer of 2018, when the nonprofit announced the sudden closure of 18 Art Institutes, nine Argosy University sites, and three South University campuses. By the top of the year, Dream Center faced eviction on a minimum of nine campuses and owed creditors quite $40 million.
It was later revealed that the school network lost accreditation in January 2018 but didn’t notify its students about its downgraded status until June 20. Meanwhile, students completed two terms of unaccredited courses, still assuming and accumulating student loan debts.
The Department of Justice charged Education Management Corp, which also happens to be the former owner of the Art Institutes, a total of $11 billion for federal funding fraud. To prevent further liability and legal actions from various stakeholders, Education Management Corp consented to settle $95 million. The Art Institutes are not the only higher education institutions caught in the net of these lawsuits. Between 2016 and 2019, about 50 chain and individual colleges were made to forcefully shutdown. A good example is the case of ITT Technical Institute, Brightwood Career Institute, and Le Cordon Bleu Colleges.
Like the Art Institute, the closure of these institutes means enrolled students who took student loans are eligible for loan forgiveness. Keep in mind that different eligibility and requirements will apply to different schools and students. Students of the Art Institute, who were affected by the fraudulent dealings and closure of Education Management Corp schools can find vital information concerning art institute loan forgiveness on this page.
There is a glimmer of hope for students whose present and future financial conditions were affected by the recent closure of the Art Institute colleges. A large portion of students are getting loans forgiven under the Art Institute loan forgiveness programs. Students caught in the unfortunate incident of Educational Management Corporation’s demise can apply for loan forgiveness in two ways:
The Closed School Student Loan Program
The Borrower’s Defense against Repayment Program
The first student loan forgiveness program (The Closed program) is operational under the federal government’s long-standing intervention in the case of students from colleges that were closed down due to one reason or the other. Therefore, if your college closed down before you get the chance to finish your education, you may be eligible for this discharge program. Under this program, you must have left the school no more than 120 days before its closure, or you were still a student at the art institute before its close down.
These are the two general eligibility criteria for students under this program. Former students can obtain the art institute loan forgiveness under these provisions.