The U.S. Department of Education has canceled student loans of nearly 1,500 Art Institute of Colorado and the Illinois Institute of Art students, who claimed both the schools defrauding them.
The loan relief comes a month after the students sued the department seeking elimination of the federal student loans. Both schools were owned by now-defunct Dream Center Education Holdings.
Students who have attended the institutes between January 20, 2018, and December 31, 2018, will have their loans canceled and their Federal Pell Grant eligibility restored.
The Department will also extend the lookback period of eligibility for closed school discharges for students who attended another 24 Dream Center schools that closed in December 2018.
“The Department is committed to holding institutions and accreditors accountable to the students they serve. In this instance, students were failed and deserve to be made whole,” said U.S. Secretary of Education Betsy DeVos.
In March, the Education Department halted financial aid to Dream Center’s Argosy University for failing to comply with certain federal standards including financial responsibility and administrative capability. It also alleged the school of not distributing loan money it owed to the students.
DeVos is facing severe criticism from students and various higher education groups for not canceling the loans of students defrauded by various institutions. Last month, the Project on Predatory Student Lending filed a lawsuit against the Department and its Secretary on the behalf of nearly 7,200 former Corinthian Colleges students in a Boston court for not providing debt relief.
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