Art Institute Student Loan Forgiveness

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Legal Issues with Art Institute

Art Institute announced the closure of its eighteen campuses in the summer of 2018. Till that time, the university faced many legal claims that undermined its quality of education and management. Therefore, the closure created an opportunity for students to benefit from the Art Institute Loan Forgiveness program.

 

It is now time for you to use the charges in your favor and possibly get all of your student loans forgiven! Fill out the form to see if you qualify for the forgiveness program.

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Quick Notice

Before we explain all the details of how you can benefit from Art Institute Loan Forgiveness, let us give a quick piece of advice. If you decide to wait for the lawsuits to settle, unfortunately, it can take years. Even if you apply to the Borrower’s Defense Against Loan Repayment plan now, you may have to wait a long time to get approval. Therefore, debtors who truly struggle with the loan payments, should get help from Student Loans Resolved. 

Our experts have immense experience in Closed School Discharge or the BDALR. We have helped thousands of students that share the same struggles with you. You will never feel alone during the complicated application process as Student Loans Resolved will be here whenever you need us. Contact us now to discuss your options for Art Institute Loan Forgiveness and get you out of debt as soon as possible.

Accreditation

Allegedly, the Art Institute lost accreditation status for its several locations in January, 2018. However, the officials did not inform the students about this news and kept enrolling them in the classes. Students continued to accumulate debt for several months to attend unaccredited courses. Lawsuits against the Secretary of Education were also common as House Democrats claimed that the Department helped the institute to deceive students. Allegedly, they helped the Art Institute to get its accreditation back and kept students unnotified about the loss of status. In one case, in October of 2018, former students revealed the documents that the Department provided federal aid to the institution illegally. The reason is that the institutions without accreditation cannot receive funding based on state laws.

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Mismanagement

Some former students also claimed that the institution informed them about an unexpected shortage of loans. Then, the officials pressured students to get new loans. Even if they could not afford the loans, they agreed because otherwise, students were obliged to leave school. 

Students also complained that the institute recruited educators who lacked skills for teaching. Some of them even could not speak English properly. Another issue was the false job promises. While they promised to help students find a job, they failed to keep their promises. Even when students applied to vacancies, they found out that they were unprepared for the tasks related to their job. 

 

In case you cannot prove that this school did any of these unlawful and fraudulent actions against you, then you can get the help of Borrower’s Defense Against Loan Repayment program.

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The Consequences of Disputes

Two years before its closure, the previous managing company of the school – Education Management Corporation – agreed to the Art Institute Loan Forgiveness worth $200 million. The reason for this action was the claim that the institution engaged in deceptive recruitment tactics. Following the allegations in 2018, the Secretary of Education decided to cancel the debt of around 1500 students. This Art Institute Loan Forgiveness was accessible to students enrolled in the school during the closure or up to a year before. In early 2020, the Department agreed to extend the eligibility period for the Closed School Discharge program. They allow students who attended school on or after January 20 to qualify for full Discharge. The officials prolonged the date to January because it was the time when the institute lost its accreditation. 

Your Options for Art Institute Loan Forgiveness

If you had studied in the Art Institute Loan Forgiveness when it closed or shortly before the closure, you could get rid of your debts fully or partially. Two federal programs help students of defunct schools to eliminate debt they accumulated for educational purposes. These are Closed School Discharge and the Borrower’s Defense Against Repayment plan. You have to choose between these programs based on your qualifications. As you cannot apply both, you should decide which aid will benefit you more. Hence, read the following sections of the Art Institute Loan Forgiveness carefully to have full information about the programs. Alternatively, you can get our professional help to find the best program that suits your qualifications.

Closed School Loan Discharge Program

This option for Art Institute Loan Forgiveness benefits students who could not complete their education and get a degree as the school closed. You can get a 100% elimination of your federal loans through this program. It applies to Direct, Perkins, and Federal Family Education loans. You need to be enrolled at the time of closure or on leave to be eligible. 

What makes the program different is that the eligibility period for withdrawals is around six months. While usually there is only a four-month limitation, the Department of Education extended this to six months. Hence, students attending the school after January 20 of 2018 are qualified for this program. As mentioned before, the decision of extension until January happened due to the loss of accreditation. As they lost status at the beginning of 2018, the eligibility extended to that date. Additionally, if you completed your degree in another school through teach-out or credit transfer, you will not be eligible for Discharge.

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Borrower’s Defense Against Loan Repayment

While the eligibility criteria and application are relatively simple for the discharge program, the process gets more complex with Borrower Defense. This alternative of the Art Institute Loan Forgiveness aims to help students who borrowed as a result of unethical and unlawful actions of the schools. The reason for its complexity is the awarding criteria. You have to prove that the school misled you and you made a wrong decision because of its false promises and high pressure. This factor makes the process difficult, if we consider that for Discharge, you only need to rely on the fact that the school is closed. However, students of the Art Institute have a relatively high chance of eliminating all their debts through these programs. Even better, you can receive reimbursement for previous payments. 

Defense Claim

You should enter the official portal to apply for forgiveness. The application requires inputting necessary documents such as transcripts, enrollment contracts, promotional material, etc. The crucial factor is your defense claim, where you have to explain why you think you are eligible. Here, you need to prove that the school was engaging in unlawful actions, and it deceived you about job replacement, credit transferability, or debt rates. To make your case even stronger, you can share the email communication evidence or link your conditions with previous lawsuits against the Art Institute. 

Talk to an Expert about Your Eligibility

FAQ

How can I apply to the Closed School Loan Discharge program?

You need to contact your loan servicer and request a form for application. Automatic replacement also happens if you do not enroll in another school three years after the closure. Your loan servicer will inform you about the Discharge if automatic placement happens. Yet, no limitation restrains you from applying to discharge without waiting for three years. Once the Department of Education confirms closure, you can go ahead for application.

Which option is better?

Both options of the Art Institute Loan Forgiveness can cancel your debt entirely. However, it is hard to say which one is better as the logical grounds they rest are different. The Discharge is possible solely because the school closed. However, Borrower’s Defense to Repayment is achievable when the school deceived and misled you. Therefore, the best option can vary depending on your case. If you cannot decide which one is better, you can also contact us to get help.

I changed my study programs. Will discharge apply to all loans?

Unfortunately, no. The discharge program only covers the debt you incurred for the program that you could not complete due to closure. If you started with one program, then continued with another, then the loans for the latter will be eliminated. This limitation occurs because it was not the school closure that stopped you from finishing the studies for the first program.

Is there a deadline to apply for Discharge?

There is no deadline for applying for the Closed School Discharge program. If three years passed from the closure, and you are eligible for closure, you can be automatically qualified for the Art Institute Loan Forgiveness. Otherwise, you can apply to the program whenever you wish.

Do I have any options if I graduated before the closure?

Students who got their degrees before the institute closed cannot get the help of Closed School Disclosure. You can still apply to the Borrower’s Defense Against Repayment program if you believe the school had misconduct. If you can prove that during your enrollment, the school engaged in unlawful actions or misled you, you can get 100% cancellation.

I received my diploma but did not complete the degree. Am I eligible to Discharge?

Some students might receive a diploma or certificate before completing their studies. If the Art Institute closed during this time, you would still be eligible to discharge, even though you have your diploma.

Is Parent PLUS loan eligible for these programs?

As a parent, you might have taken a loan for the studies of your child. If the school closed before completion of the degree, your debt could qualify for the Discharge. However, you need to discuss your case with the loan servicer or a third-party expert like Student Loans Resolved.

How closure affects veterans?

Veterans who used GI Bill benefits can still restore their entitlements if the school closed during their studies. However, those who finished the term will not qualify for restoration.

What happens after the application?

In case of approval, you will receive a notification about the cancellation. You can also be eligible for reimbursement. Any negative issues on your credit history will disappear as a result of the Art Institute Loan Forgiveness. However, if you get a rejection, then there is no way except continuing to make payments. Additionally, when Borrower’s Defense to Repayment is in review, there is a temporary hold on your payments. A rejection of the application will resume the payments, and you will be required to pay back all accumulated interest.

Am I eligible for forgiveness if I continued education in another school?

If you transferred your credits from the Art Institute to another school, you would not be eligible for Discharge. However, you can still enjoy the benefits of Borrower’s Defense to Repayment if you can prove that the school defrauded you.

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