What's happened
The Biden administration has canceled over $6 billion in student debt for 317,000 individuals who attended the Art Institutes, citing fraudulent practices by the for-profit colleges. This move comes after a review found that the institutions misled students with false job placement figures and inflated salary expectations. Additionally, the top student aid official, Richard Cordray, is stepping down following the problematic rollout of a new financial aid form.
Why it matters
The cancellation of student debt for Art Institutes attendees is significant as it addresses fraudulent practices in for-profit education, providing relief to affected borrowers. The departure of Richard Cordray raises questions about the management of student aid programs and the impact on future financial aid initiatives.
What the papers say
According to the New York Times, the Biden administration canceled $6 billion in student debt for Art Institutes attendees due to fraudulent practices, with President Biden emphasizing the need to provide relief to borrowers. The Independent highlighted the Education Department's findings of misleading job placement data and inflated salary figures by the Art Institutes, leading to automatic loan erasure for affected individuals. Business Insider UK reported on the two-week window for public input on Biden's new student-loan forgiveness plan, aiming to benefit over 30 million borrowers.
How we got here
The cancellation of student debt for Art Institutes attendees follows investigations by state attorneys general into fraudulent practices by the for-profit colleges. The Education Department's decision to erase loans for affected individuals is based on evidence of misleading job placement and salary data provided by the institutions. Richard Cordray's resignation as the top student aid official comes after criticism of the department's handling of a new financial aid form, impacting the college admissions process.
Common question
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Joseph Robinette Biden Jr. is an American politician who is the 46th and current president of the United States. A member of the Democratic Party, he served as the 47th vice president from 2009 to 2017 and represented Delaware in the United States Senate
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The Art Institutes are a collection of for-profit art schools that are owned by Education Principle Foundation and the remnants of two failed parent companies: for-profit college operator Education Management Corporation and Dream Center Education Holding