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If you attended The Art Institutes between 2004 and 2017, you may qualify for federal student loan forgiveness. During that time, according to an investigation by the U.S. Department of Education (ED), The Art Institutes made “substantial misrepresentations” about students’ chances of employment after graduation.
In 2024, the Biden-Harris administration announced more than $6.1 billion in immediate and automatic student loan relief to nearly 317,000 borrowers who were enrolled in The Art Institutes school system during that 13-year period.
Students who attended after 2017 may have some recourse, as well. In September 2023, The Art Institutes closed their doors for good. Borrowers impacted by the schools’ closure may be eligible for discharge of their student loans through closed school loan discharge.
Learn more about The Art Institutes loan forgiveness, closed school loan discharge, and other options for dealing with your student loan debt.
Key Points
• Nearly 317,000 borrowers who attended The Art Institutes between 2004 and 2017 are eligible for forgiveness of their federal student loans.
• Qualifying borrowers receive automatic student loan forgiveness without having to take any action.
• Borrowers affected by The Art Institutes’ permanent closure in 2023 may apply for closed school loan discharge.
• Application for closed school loan discharge requires logging into StudentAid.gov and providing specific documentation.
• Those not eligible for Art Institutes loan discharge may consider income-driven repayment plans, Public Service Loan Forgiveness, and student loan refinancing to help manage student debt.
Background on The Art Institutes’ Closures
The Art Institutes was a private, for-profit art school system with 50 campuses. Between 2004 and 2017, the institution engaged in what the ED called “substantial misrepresentations related to employment rates, salaries, and career services” and distributed false information to prospective students, the ED said.
Many of The Art Institutes’ schools closed in 2019 or earlier. On September 30, 2023, the remaining eight schools permanently shut down. Students affected by the closure can apply for discharge of their federal student loans.
On May 1, 2024, the Biden-Harris administration announced the automatic $6.1 billion in Art Institutes student loan forgiveness for students with federal loans who attended the schools between January 1, 2004, and October 16, 2017.
Private student loans are not eligible for this federal forgiveness or discharge.
Current Status of Loan Forgiveness Programs
If you attended The Art Institutes between 2004 and 2017, your federal student loans should be automatically forgiven, with no action needed by you. Separately, if you were affected by the 2023 closure and you’re wondering can student loans be discharged in this instance, the answer is generally yes.
Federal student loans can be forgiven due to certain actions by a school, including school closure if you were attending the school at the time it closed or if it closed soon after you withdrew. If you meet that criteria, your federal loans may be discharged under a process called borrower defense to repayment. You can apply for closed school discharge through the Federal Student Aid office.
It’s important to note that in 2023, a federal court delayed the effective date of the latest regulations for borrower defense and closed school loan discharges. No applications can be processed until the effective date is reinstated. However, you can still apply for a closed school discharge in the meantime.
Eligibility Criteria for Loan Forgiveness
Students who are eligible to receive The Art Institutes loan forgiveness announced in May 2024 must meet the following criteria:
• Enrolled in one of The Art Institutes schools between January 1, 2004, and October 16, 2017.
• Borrowed Federal Direct student loans (or loans that can be consolidated into a Federal Direct Consolidation Loan) to attend The Art Institutes.
Students impacted by The Art Institutes’ 2023 closure may be eligible for closed loan discharge to relieve their student loan debt through borrower defense to repayment if:
• Their school closed while they were enrolled, while they were on an approved leave of absence, or within 180 days after they withdrew.
• They borrowed Federal Direct student loans (or loans that can be consolidated into a Federal Direct Consolidation Loan) to attend the school.
Recommended: Who Pays for Student Loan Forgiveness?
Types of Loans Eligible for Forgiveness
The types of federal student loans eligible for forgiveness through borrower defense are Direct Loans, such as Federal Direct Subsidized and Unsubsidized Loans and parent PLUS loans. Other federal loans that can be consolidated into a Federal Direct Consolidation Loan — including Federal Family Education (FFEL) Loans and Federal Perkins Loans — are also eligible.
Recommended: Federal Student Loan Interest Rates
Application Process for Loan Forgiveness
Students who attended The Art Institutes between 2004 and 2017 should have been contacted about forgiveness without having to take any action. If you have not been contacted, reach out to your loan servicer.
Those affected by the 2023 closure of The Art Institutes can apply for borrower defense to repayment. To apply, log into your account at StudentAid.gov and be sure to have on hand:
• School name(s) and program of study
• Your enrollment dates
• Documentation to support why you believe you qualify for borrower defense and to demonstrate the harm you suffered
Alternative Options for Art Institutes Borrowers
If you are not eligible for The Art Institutes student loan forgiveness, there are some other methods that can help you manage your student debt.
Income-Driven Repayment Plans
Borrowers with federal student loans may want to consider income-driven repayment (IDR). These plans base your federal student loan payments on your discretionary income and family size. This typically results in a lower monthly loan payment. There are several different IDR plans to choose from.
Under an IDR plan, you could qualify for forgiveness of your remaining debt after 20 or 25 years.
Public Student Loan Forgiveness
If you work full-time in public service for a qualifying employer, such as the government or a nonprofit organization, you may be eligible for Public Service Loan Forgiveness (PSLF). This program forgives the remaining balance on most Federal Direct loans.
Qualifying borrowers can get PSLF after making the equivalent of 120 qualifying monthly payments under an IDR plan or the 10-year Standard Repayment Plan, though borrowers may need to switch from the Standard Repayment Plan to an IDR plan to experience the benefits of PSLF.,
Student Loan Refinancing
Refinancing is another option you might consider. With student loan refinancing, you replace your old loans with a new private loan, ideally one that has a lower interest rate and more favorable terms, which could lower your monthly payments. However, keep in mind that refinancing with an extended loan term will result in paying more interest over the life of the loan.
Borrowers interested in refinancing student loans to save money should compare lenders and offers. Also, be aware that refinancing federal loans makes them ineligible for federal benefits, such as income-driven repayment.
A student loan refinancing calculator can help you decide whether refinancing makes sense for your situation.
The Takeaway
If you attended The Art Institutes between January 1, 2004, and October 16, 2017, you may be eligible for automatic federal student loan forgiveness. You should have been contacted about forgiveness without having to take any action. If you haven’t been notified, reach out to your loan servicer.
Students attending The Art Institutes in 2023, when it permanently closed its doors, may be eligible for closed school discharge through borrower defense to repayment. You can apply for a loan discharge at StudentAid.gov.
If you are not eligible for Art Institutes loan forgiveness, you can explore other debt relief options, such as income-driven repayment, Public Service Loan Forgiveness, and student loan refinancing.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
How can I check if my loans from The Art Institutes qualify for forgiveness?
If you have federal student loans and attended The Art Institutes between January 1, 2004, and October 16, 2017, forgiveness should be automatic without any action needed on your part, so contact your loan servicer if you haven’t received any notification.
If you were impacted by the 2023 closure of The Art Institutes, you can apply for closed school discharge although this is currently on hold per a court order until the effective date on regulations is reinstated. Check with StudentAid.gov for updates on the situation.
What government programs are involved in forgiving The Art Institutes loans?
In May 2024, the Biden-Harris administration announced that the U.S. Department of Education (ED) would forgive Art Institutes loans for borrowers of federal student loans who attended the school between January 1, 2004, and October 16, 2017. At that time, the ED took steps to automatically approve individuals for loan discharge.
If you were impacted by the 2023 closure of The Art Institutes, you may qualify for the ED’s closed school discharge.
Are private loans taken for attending The Art Institutes eligible for forgiveness?
Only federal student loans taken out to attend The Art Institutes qualify for forgiveness. Private student loans are not eligible.
How long does it take to receive loan forgiveness for Art Institutes loans?
The forgiveness announced by the Biden administration in May 2024 was automatic, so if you’re eligible and haven’t yet received notification check with your loan servicer.
If you were affected by The Art Institutes’ 2023 closure and you filed for closed school discharge, a federal court has delayed the effective date of the latest regulations for borrower defense and closed school loan discharges. You can check with StudentAid.gov for updates on the situation.
Are former Art Institutes students eligible for borrower defense to repayment?
Borrowers who enrolled at The Art Institutes between January 1, 2004, and October 16, 2017, should automatically receive 100% discharge of their eligible student loans. If you were affected by the schools’ 2023 closure, you can apply for borrower defense to repayment through closed school discharge.
About the author
Melissa Brock
Melissa Brock is a higher education and personal finance expert with more than a decade of experience writing online content. She spent 12 years in college admission prior to switching to full-time freelance writing and editing. Read full bio.
Photo credit: iStock/chanakon laorob
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