Art Institute Student Loan Forgiveness: How to Get It

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Updated on May 11, 2024

Former Art Institutes students are eligible for Art Institutes Loan Forgiveness under different programs. No matter which campus you attended, you have various paths to consider:

  1. Borrower Defense to Repayment: Born from the Sweet v Cardona lawsuit settlement, which wiped out $6 billion of federal student loan debt for borrowers who attended mostly for-profit schools, this might be your choice if you attended the school between 2004 and 2017. Learn More: Art Institutes Borrower Defense

  2. Closed School Discharge: If your school folded while you were enrolled or soon after you left, this path is for you. You could see your federal student loans discharged if the closure prevented you from finishing your education.

Furthermore, being a former Art Institutes student, there’s a chance that you might be eligible for these federal student loan forgiveness programs:

  • Public Service Loan Forgiveness (PSLF): This program forgives the remaining balance on your Direct Loans after 120 qualifying payments under a qualifying repayment plan while working full-time for a qualifying employer.

  • Income-Driven Repayment (IDR) Waiver: Set to kick off in spring 2023, this game-changer offers automatic relief for those who’ve been making federal student loan payments for 20 years or more. IDR bases your payments on your income, not the balance owed, and the coming policy shift could drastically cut your journey to loan forgiveness.

As for any private student loans you have, if you’re still grappling with those, explore refinancing, negotiating a settlement, or considering student loan bankruptcy.

Related: How to Get Rid of Private Student Loans

A glance at the journey toward loan forgiveness reveals key milestones:

  • 2015 Settlements: Education Management Corp., the former parent company of the Art Institute chain, was hit with a $95 million settlement for fraudulent practices and illegal marketing and enrollment activities. You may see this referred to as the “Art Institute Accreditation Lawsuit.” That same year, an extra $100 million settlement was reached with attorneys general from several states. These actions resulted in significant loan forgiveness for thousands of students nationwide. These settlements might have already benefited you if you attended one of the Art Institute campuses.

  • 2022 Navient Settlement: Accused of unfair loan servicing practices, Navient had to pay out $1.85 billion in relief to settle a class action lawsuit filed by dozens of state attorney generals. For many of you, this might have cleared your subprime private student loan balances. Here’s a breakdown of the Navient lawsuit.

Importantly, these settlements and discharges have already been applied.

So if you’re still dealing with student debt from the Art Institute, it might be because you’re awaiting the benefits of a new Borrower Defense application or the automatic forgiveness from the Sweet v Cardona lawsuit.

Related: Full Sail University Loan Forgiveness

Who Benefits From the Sweet v Cardona Settlement - Did I Miss Out?

The Sweet v Cardona lawsuit led to the cancellation of $6 billion in federal loans for nearly 200,000 former students, including many former Art Institute students, who submitted borrower defense claims alleging their schools defrauded them before November 15, 2022. If you applied before this time, you will fall into one of the following three categories.

Who Gets Relief Under The Sweet v. Cardona Settlement?

The automatic relief group

If you applied for Borrower Defense loan forgiveness on or before June 22, 2022, and were in a school from this list then you should have received full relief on or before January 28, 2024. Notably, this settlement overturned 128,000 denial notices issued when the Trump administration oversaw the Borrower Defense process.

The decision group

This group is pretty complicated. If your Borrower Defense loan forgiveness application was denied between December 2019 and October 2020 then you should have received a notice reopening your application by May 28, 2023. Otherwise, your decision date is based on your application year.

  • Applications received by the end of 2017 will be decided by July 28, 2023

  • Applications received during 2018 will be decided by January 28, 2024

  • Applications received during 2019 will be decided by July 28, 2024

  • Applications received during 2020 will be decided by January 28, 2025

  • Applications received from 2021 – June 22, 2022 will be decided by July 28, 2025

The past class applicants

If you applied between June 22 and November 16, 2022, you’ll receive a decision within three years and full relief if the department misses that deadline. Notifications for eligible borrowers started in late April 2023. Further information is available on and through The Project on Predatory Student Lending (PPSL).

If you haven’t received an update by the dates above regarding your borrower defense repayment forgiveness or refund then fill out the PPSL’s Lack of Notice survey so that they can advocate for you or feel free to book a call with me so we can review your situation.

If you didn’t apply on or before November 15, 2022, even though you won’t be considered in the settlement you can still apply for Borrower Defense!

What is Borrower Defense to Repayment?

Borrower defense to repayment is the discharge or cancellation of part or all of your federal student loans due to fraud and/or predatory lending practices by your school. This term is often shortened to “borrower defense.”

The Obama administration established the program. It was designed to forgive loans for students at schools that broke state consumer protection laws or committed other serious misdeeds. But the program was put on hold under the Trump administration’s Education Secretary, Betsy DeVos, leading to a backlog of claims.

The Biden administration reactivated the Borrower Defense program, eliminating nearly $6 billion in loans for students who attended institutions like Corinthian Colleges, notorious for its illegal recruiting tactics.

Who is Eligible for Borrower Defense?

You can only be eligible if you:

  • Borrowed and hold Federal Student Loans – private loans are not eligible

  • Your school broke state laws or you can prove they committed fraud

  • And you file within three years of leaving the school (depending on your state and when your loans were disbursed)

You cannot apply to cover personal expenses during school, for personal injury, or claims of harassment.

If your federal student loans were disbursed before July 1, 2020, a legal judgment against your school may be used as the sole grounds for a borrower defense application. However, such a legal judgment cannot be used as sole evidence when applying to cancel loans disbursed after July 1, 2020.

Unfortunately, you won’t know with absolute certainty whether you qualify for loan borrower defense until your application gets processed. Even a well-written application can be denied if the Department of Education doesn’t believe that you meet the exact criteria for eligibility.

If you want to talk through your eligibility and application, feel free to book a call with me so we can review your situation.

Related: How to Qualify for Borrower Defense to Repayment

How to Apply for Borrower Defense to Repayment

Before applying for borrower defense, gather necessary documents such as transcripts, enrollment agreements, and evidence of fraudulent statements by the school. Start the application on’s Borrower Defense page. The application consists of seven sections, including personal information, school information, fraudulent activity, financial harm, and a request for forbearance.

You can apply online or via email to Alternatively, you can mail a printed copy to the U.S. Department of Education, 4255 W Highway 90, Monticello, KY 42633. It is advisable to set aside 45 minutes for this process and keep a copy of the completed application. For any queries, contact the Borrower Defense Customer Contact Center at 1-855-279-6207 or visit the online Help Center. For more details, check out our Borrower Defense Application Guide.

What is Closed School Discharge and Who Qualifies For It?

Closed school discharges are a provision by the U.S. Department of Education (ED) that helps students who could not complete their education due to their school’s closure. This program extends to students who were attending the school or were on an approved leave of absence or withdrew shortly before the institution’s closure.

Eligibility Requirements for Closed School Discharges

In November 2019, the department expanded this program for students of 24 schools owned by Dream Center Education Holdings (DCEH) that closed in 2018. This expansion includes automatic loan cancellations for students from five specific DCEH-owned schools and the restoration of Federal Pell Grants eligibility for students who received them at these closed schools.

Originally, the closed-school discharge program only applied to students who had withdrawn or had been attending their school within 120 days of its closure. But the department made special allowances for DCEH-owned schools, extending this eligibility period to June 29, 2018, and later to January 20, 2018, for certain institutions.

How to Apply for Closed School Discharge

Students who believe they qualify under these circumstances should contact their federal loan servicer or visit the Federal Student Aid website at for more information about the closed school loan discharge eligibility requirements and application process. All completed discharge applications must be returned to the loan servicer for processing.

Other Options For Student Loan Debt Relief

As a former Art Institute student, if the Borrower Defense or Closed School Discharge programs don’t apply to your situation, don’t despair. There are still several options you can explore for student loan debt relief:

  • Public Service Loan Forgiveness: This program is specific to federal loans. It forgives the remaining balance of Direct Loans after 120 qualifying payments while working full-time for a qualifying employer, typically a government or nonprofit organization.

  • Income-Driven Repayment Plan: For borrowers experiencing financial hardship, IDR plans cap your monthly payments based on your income and family size. If a remaining balance exists after 20-25 years of payments, it’s forgiven. This is referred to as IDR loan forgiveness.

  • Negotiating settlements: Primarily applicable to private loans, this method involves agreeing with your lender on a lower payoff amount. Not every lender is willing to negotiate student loan settlements. But if they are, it can lead to significant savings for some.

  • Filing for bankruptcy: Though a last resort and challenging, it’s not impossible to discharge student loans through bankruptcy. Filing student loan bankruptcy means proving “undue hardship” in a separate legal process called an adversary proceeding.

Each option carries its own eligibility requirements and potential impacts on your credit score and taxes. Therefore, thorough research or consultation with a financial advisor is advised to understand which avenue best fits your circumstances.

If you are still unclear on whether you could be eligible for loan forgiveness through any of the programs above, feel free to book a call with me so we can review your situation.

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When did the Art Institute lose its accreditation?

The Art Institute lost its accreditation in June 2016. The U.S. Department of Education stripped the Accrediting Council for Independent Colleges and Schools (ACICS) of its accrediting power, which impacted the Art Institute.

Is there a lawsuit against the Art Institute?

Yes, there was a lawsuit against the Education Management Corporation, which operated the Art Institute campuses. The federal Department of Justice and four states initiated this lawsuit, seeking multibillion-dollar damages. That case has been settled.

What accusations have been made against the Art Institute?

The Art Institute has been accused of several illegal activities, including misleading marketing strategies, false statements about the value of their education, and applying high-pressure sales tactics on unsuitable students. These allegations have sparked several lawsuits from ex-students and consumer protection groups.

Does the Art Institute qualify for Borrower Defense?

Yes, the Art Institute may qualify for borrower defense. You should review the specific terms of your loan and explore the options available to you for a definitive answer.

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