Debt-Ridden Students Claim For-Profit Art Institutes Defrauded Them With Predatory Lending Practices

The struggling Art Institute system, which earlier this month announced plans to shutter 18 campuses by the end of the year, is coming under fire from former students who are accusing the school of fraud and predatory loan practices.

Under President Barack Obama, the Department of Education had cracked down on for-profit schools, but President Donald Trump’s administration appears to have eased the pressure on such institutions considerably.

Students are calling on the Department of Education to enforce an Obama-era regulation that would erase debts accrued at predatory schools of higher learning, according to CNBC. The Art Institutes’ financial aid offices, students say, would routinely call students to inform them that their student loans had run out and pressure them to take on more debt. The bill for a two-year associate’s degree could run as much as $90,000 and leave students with little to show for it, according to some alumni.

On the I am AI Facebook group page, some students claim that high interest rates have doubled the principal of their loans. “I have two loans totaling 13k with interest rates of nearly 9 percent and 11 percent,” wrote Sam Kotowski, asking for advice about refinancing private loans. “I have paid these fully since 2012 and, while it hasn’t grown, the total balance has only decreased about $300 when I have paid about 14k on them.

Several photographs show students protesting the high cost of their tuition and the resulting debt. The group has some 7,000 members, but a whitehouse.gov petition calling for loan forgiveness for AI students has thus far only attracted 159 signatures. Read more

2018-10-23T20:55:31+00:00