The U.S. Department of Education provides loans to students at the New England Institute of Art

Approximately 3,500 Massachusetts borrowers who attended The Art Institutes for-profit school system will receive $1,000 in student debt relief under a new plan jointly announced Wednesday morning by the Biden administration and Massachusetts Attorney General Andrea Campbell received a total of $80 million.

The U.S. Department of Education said it plans to forgive more than $6.1 billion in student debt for about 315,000 borrowers across the country who attended the Art Institutes between 2004 and 2017. The agency said the private, for-profit network of art schools “knowingly misled students.” with false claims about post-graduation employment rates and exaggerated industry relationships.

Many of the Massachusetts borrowers who were eligible for loan relief attended the New England Institute of Art in Brookline, which closed in 2017.

“We are providing this relief because we have found that arts institutions engage in widespread and persistent practices that mislead borrowers about the value of their degrees,” U.S. Education Secretary Miguel Cardona said during a call with reporters.

The New England Institute of Art (NEIA) – formerly known as Massachusetts Communications College – offered associate and bachelor's degrees in fields such as media arts, fashion and design. Along with NIEA parent company Education Management Corporation, the school was the subject of a consumer protection lawsuit in 2018 filed by then-Massachusetts Attorney General Maura Healey over allegations that it deceived and misled prospective students to increase enrollment.

The lawsuit argued that many NEIA students were left with large debts to pay their tuition and were unable to find employment to pay off their loan debts. The average cost of an associate's degree was about $49,000 and a bachelor's degree was about $95,000. The average student debt load was about $53,000.

In 2019, a Massachusetts judge ordered NEIA and its parent company to pay $60 million in restitution.

According to the U.S. Department of Education, the legal action taken by officials in Massachusetts and their counterparts in Iowa and Pennsylvania laid the foundation for the federal debt relief plan involving Art Institute students nationally.

“This significant relief is truly significant,” Campbell said. “It will help improve economic mobility, livelihoods and opportunities for those harmed by the predatory tactics of these for-profit schools.”

According to a news release from the U.S. Department of Education, federal investigations found that the Art Institutes falsely advertised that 80% of students found jobs in their field within six months of graduation. According to the Department of Energy, the school network's actual field employment rate was no more than 57%.

According to the press release, the Biden administration has approved nearly $160 billion in loan relief to date, affecting nearly 4.6 million borrowers.

Anna Harden

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