Matt Rourke/AP Photo
People walk past the now-closed Art Institute of Philadelphia, operated by the Education Management Corporation, November 16, 2015, in Philadelphia.
I’m numbed by the police state response to campus protests to end institutional support for the killing in Gaza. College administrators have a model, wielded at places like Brown University, where a set of demands are met with meaningful dialogue, leading to a rapid de-escalation. Elsewhere, there’s been pointless brutality and chaos. A few miles from my house, pro-Israel protesters attacked an encampment at UCLA while police watched. Professors have been detained and beaten, as have members of the press. High-grade military equipment has been put to use as part of suppression tactics. And the hysterical commentary around the spectacles has been completely divorced from the purpose of the protests, to end a war and prevent a humanitarian catastrophe perpetrated against Palestinian civilians.
Every generation winds up learning for themselves that official tolerance for dissent, however celebrated by elites in their gauzy treatment of the past, is always contingent on whether it interferes with those elites’ particular agendas. It’s a painful lesson, though it should not be viewed entirely with despair. History offers countless examples of protesters bruised, manhandled, arrested, ejected, and removed, and later on winning some or all of their goals. Movements crash on the shore like waves, and each gets a bit closer to the peak of the tide. What’s happening now on campus isn’t a triumph of state power; rather, it reveals the hollowness of it. And it will not lead to where administrators who give the go sign to cops with nightsticks think it will.
And there’s a good example of student persistence toward seeking basic rights—in this case for themselves—leading to results, against impossible odds. It doesn’t have anything to do with Gaza.
These students didn’t go to an elite university, and they look more like America in terms of demographics and education levels. They enrolled in school seeking a better career path for themselves and were swindled—not by discovering limits on their free speech but literally swindled, stolen from, defrauded, left without a future by a system that had no use for them. It took a decade to reverse the last and most wrenching aspect of that action.
On Wednesday, 317,000 students who between 2004 and 2017 attended the Art Institutes, a for-profit conglomerate of several dozen art schools around the country, finally had their loans automatically canceled, in recognition of the “substantial misrepresentations” that characterized their educational career. The Art Institutes, formerly controlled by a now-defunct parent company called Education Management Corporation (EDMC), lied to students about the value of their degrees. The company told them how many students who matriculate would be placed for jobs in their chosen field, what salaries they could expect, and what career services the institution would provide. None of this proved to be the case.
Under a provision of the Higher Education Act called “borrower defense to repayment,” Art Institute students had the right to assert that they were victims of fraud and shouldn’t have to continue paying on the loans they took out under false pretenses. A loan contract has two sides; the borrower keeps up their end by paying on time, and the lender keeps up their end by abiding by the rules of the contract. The contract says that a fraudulent loan must be extinguished. It took ten years and three presidents for the lender, in this case the U.S. government, to honor that.
“We cannot replace the time stolen from these students,” said Richard Cordray, who is departing as the head of the Office of Federal Student Aid in June, in an unusually poignant statement. “But we can lift the burden of their debt.”
Under the Higher Education Act, Art Institute students had the right to assert that they were victims of fraud and shouldn’t have to continue paying on the loans.
It’s worth detailing the evidence in this case and what it meant for over 300,000 students seeking a better life. The Art Institutes claimed that over 80 percent of its graduates achieved gainful employment in their chosen field within six months. But it “counted graduates as employed in-field when the school did not know graduates’ job titles, when a graduate’s job title was too vague to indicate that they worked in-field, and when a graduate’s job title was unrelated to their field of study,” according to the Education Department. Those examples covered about one-quarter of the “gainfully employed,” and likely more, because the Art Institutes “falsified some internal data” regarding employment.
Average salaries were also “made up” or “falsified,” according to internal school officials. In one notorious example, Serena Williams took a couple of fashion classes at the Art Institute of Fort Lauderdale, Florida. So that school included Serena Williams’s annual tennis and endorsement income in its statistical average of the salaries it promised to students.
Claims about Art Institute partnerships with prospective employers were also untrue; if anything, they were more like anti-partnerships. “The school had a negative reputation, so companies generally did not want to hire its graduates,” the Education Department said in its announcement. Nor did the schools provide any resources to graduates once they left school; they didn’t even return graduates’ phone calls.
The schools’ goals were simple: entice students into the Art Institutes with made-up promises, maximize the tuition received through loans and grants, and then churn out worthless diplomas that did little to help those who went through the process. This predictably led to heavy debt loads, chronic unemployment, and eventual defaults.
It’s disappointing that there’s been essentially no civil or criminal accountability for the perpetrators of this scheme. EDMC sold the Art Institutes in 2017 and eventually collapsed; the remaining schools were shut down last year. EDMC paid a $95.5 million assessment to the Justice Department back in 2015, settling four False Claims Act cases brought by whistleblowers. That figure does not come close to what the company earned; Wednesday’s action canceled $6.1 billion of student debt (including past payments) from Art Institute students, all of which went into the pockets of EDMC; the government is liable for the loan balances.
Despite the 2015 settlement making clear that Art Institute students were subject to “mistreatment, abuse, and exploitation,” it took until this week for the government to finally recognize its obligations and relieve these fraud victims from the burdens of payment. The Debt Collective began organizing Art Institute students a year earlier, and the backlog of cases sat, through the Obama, Trump, and the first three years of the Biden presidencies. Other students the Debt Collective worked with, at Corinthian Colleges and ITT Tech, had already received their debt relief under Biden; the Art Institute students had to wait in line.
I’m not diminishing the credit the Biden administration deserves for finally fixing broken student debt programs and helping what is now 4.6 million borrowers, including nearly one million fraud victims. But the agonizing delay in doing the right thing is what I’m interested in here. For more than six months, students wanting the killing to stop in Gaza have spoken out, in rallies, marches, petitions, and now protest encampments. That is one-twentieth the amount of time it took for students subject to a violation of law that ruined their lives to get a small measure of restitution, one which amounts to the government saying, “OK, you don’t have to pay for the crime committed against you.”
Student debt, of course, grew out of the campus protests of the 1960s, and the subsequent concern among conservative interests that free or almost-free college was creating “an educated proletariat” and havens for radicals, which must be stopped by burdening them with higher tuition, requiring loans that they would have to repay. In that sense, the circumstances that led to the defrauding of Art Institute students connects with the encampments at Columbia and UCLA and elsewhere. It’s one reason why this feeling of precarity persists among young people, why they see economic issues as intractable, and maybe why some of them are so passionate about liberation.
Basic civil rights have not been granted on many college campuses for a while, not just in the context of the First Amendment, but in the context of financial rights to liberty and the pursuit of happiness. It’s sad that the state deigns to offer these rights or listen to students’ cries only after the tools of repression and dismissal are exhausted. It would be preferable if that tiny bit of respect came much sooner. But these tactics won’t stop young people from fighting for a better world for everyone, including themselves.
