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By Alia Shoaib
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President Joe Biden has approved $6.1 billion in student debt cancellation for 317,000 borrowers who attended The Art Institutes.
In an announcement made on Wednesday, Biden said this institution "falsified data, knowingly misled students, and cheated borrowers into taking on mountains of debt without leading to promising career prospects at the end of their studies."
Student debt cancellation has become a key feature of Biden's administration, and today's announcement comes after yesterday's deadline for students to submit a loan consolidation application.
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This is one of the Education Department's largest group discharges of federal student loans.
The government used its power through the borrower defense to repayment program, a federal student loan program that helps students whose schools violated certain laws get debt relief.
The move impacts students who were enrolled in The Art Institutes between January 1, 2004, and October 16, 2017. The for-profit chain of colleges closed last year following fraud allegations.
Starting Wednesday, the Education Department will inform eligible borrowers, and will also refund any payments previously made by former students on loans marked for forgiveness.
Read more: Student Loan Forgiveness Updates and FAQs
Eligible borrowers will automatically be granted the relief and do not need to take any action.
The move comes after the attorneys general of Iowa, Massachusetts and Pennsylvania investigated The Art Institutes and its parent company, Education Management Corporation (EDMC), and found evidence of "pervasive and substantial" misrepresentations to prospective students.
The Education Department said the investigations found that the chain had misled prospective students about the rate of graduates who found jobs in their fields of study.
Biden said in a statement that over the last three years, his administration has approved nearly $29 billion in debt relief for 1.6 million students "whose colleges took advantage of them, closed abruptly, or were covered by related court settlements."
"While my predecessor looked the other way when colleges defrauded students and borrowers, I promised to take this on directly to provide borrowers with the relief they need and deserve," he said.
The Supreme Court ruled against Biden's $430 billion student debt forgiveness plan last year, but the administration has continued to explore other avenues to deliver student debt relief.
In total, nearly $160 billion in student loan debt for about 4.6 million borrowers has been forgiven under Biden, which is around 10 percent of all federal student loan debt currently owed.
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"We will never stop fighting to deliver relief to borrowers, hold bad actors accountable, and bring the promise of college to more Americans," Biden said in the statement.
Update 05/01/24, 8:23 a.m. ET: This article was updated with additional information.
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