The struggle Institute of Arts system, who earlier this month announced plans to close 18 campuses by the end of the year, is criticized by former students who accuse the school of fraud and predatory lending practices.
Under President Barack Obama, the Education Department cracked down on for-profit schools, but President Donald Trump’s administration appears to have eased the pressure on these institutions considerably.
Students ask the Ministry of Education to apply a Obama Era Rules which would wipe out the debts accumulated in predatory schools of higher education, according to CNBC. Financial aid offices at art institutes, say the students, regularly called students to let them know their student loans were exhausted and to pressure them into taking on more debt. The bill for a two-year associate’s degree could run up to $ 90,000 and leave students with little results, some alumni say.
On the I am AI Facebook group page, some students claim that the high interest rates have doubled the principal amount of their loans. “I have two loans totaling 13,000 with interest rates of almost 9% and 11%,” Sam Kotowski wrote, asking for advice on refinancing private loans. “I’ve paid them in full since 2012 and while it hasn’t increased, the total balance only decreased by about $ 300 when I paid around $ 14,000 on them.
Several photographs show students protesting the high cost of their tuition fees and the resulting debt. The group has some 7,000 members, but a whitehouse.gov petition The call for loan cancellation for AI students has so far attracted only 159 signatures.
The law protecting students was due to go into effect in June last year, but its implementation has experienced many delays under Education Secretary Betsy De Vos, and could instead be dismantled. She criticized the rule’s pressure to cancel the loan, at a conference in 2017 that “You just had to raise your hand to qualify for so-called free money.
De Vos’s Ministry of Education did not respond to any requests for debt cancellation, and a team investigating possible fraudulent activity at for-profit institutions was reduced to just three employees, ceasing a large part of its activities, according to the New York Times. (The department did not respond to inquiries from Artnet News.)
In May of this year, the Times The editorial board published an opinion piece accusing the Trump administration of helping the for-profit university system to defraud students. De Vos hired officials with known ties to for-profit colleges, such as senior policy adviser Diane Auer Jones. The department’s very small investigative team is now led by Julian Schmoke, former dean of the DeVry Education Group, once the target of the investigation.
Just before Trump took office, the Education Department released a list of over 800 college programs that leave their students in debt beyond what they can reasonably repay. If loan payments were too high a percentage of a graduate’s average income, a school would become ineligible for federal taxpayer-funded student aid programs. The list included many art institutes.
At the time, the Art Institutes was a for-profit chain owned by Education Management Corp, which contributed $ 95 million. regulation in 2015 due to consumer fraud and other violations. As part of the deal, the school agreed to write off more than $ 102.8 million in debt owed by some 80,000 former students, but only about $ 1,300 each.
Early last year, Dream Center Education Holdings, part of the Los Angeles religious charity Dream Center, purchased all 31 Art Institute schools, as well as Argosy University schools and South University, to Education Management for $ 60 million.
Dream Center moved to convert schools into non-profit organizations. (Ministry of Education approval is still pending.)
“Amazing how the government just let them settle in and not restructure anything in their organization to improve the quality standards of education,” former AI student Kali Koller wrote on Facebook, noting that she cited the 2015 regulation in her borrower’s defense request.
Education Management filed for bankruptcy last month and the company’s website was shut down. However, an edmc.edu account sent an email in response to a artnet request for information to the Dream Center newsroom email. Despite the amalgamation of emails from the two companies, the message insists that “Education Management’s bankruptcy filing is in no way associated with Dream Center Education Holdings.” Neither organization responded to further requests for comment.
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