Bennet-Gardner Deadline Passes For Answer On Extra Debt Relief For Art Institute Of Colorado Students

January 6, 2020
The Art Institute of Colorado hosted its final student portfolio show on Dec. 14, 2018 at its Denver campus.The Art Institute of Colorado hosted its final student portfolio show on Dec. 14, 2018 at its Denver campus.Stephanie Wolf/CPR News
The Art Institute of Colorado hosted its final student portfolio show on Dec. 14, 2018 at its Denver campus.

Colorado Sens. Michael Bennet and Cory Gardner have requested that the U.S. Department of Education wipe out even more debt for students who attended the now-defunct Art Institute of Colorado. Their Dec. 13 letter, which asked for a response by Jan. 3, has so far gone unanswered. 

The Education Department acknowledged to CPR News Monday that it’s received the letter and is reviewing it.

“The Department of Education has an opportunity to do right by students that this institution defrauded, and I hope they heed our call to extend the eligibility period,” said Bennet, the state’s Democratic and senior senator.

Sen. Gardner noted that the "students are victims of the actions of this institution" and urged the department to extend the eligibility period.

If the Education Department won’t take action, Sen. Bennet’s office said they’ll look at how they can resolve this issue through the 2021 budget process or through reauthorization of the Higher Education Act, also known as the College Affordability Act

The closing of the Art Institute of Colorado, which came in late 2018, blindsided many of the teachers, staff and students. It had come under new ownership in late 2017 when Dream Center Education Holdings purchased the institute and a slew of other for-profit schools in a $60 million deal. 

On Jan. 20, 2018, after the deal was finalized, the regional accrediting agency Higher Learning Commission changed the accreditation status of four campuses owned by DCED, including the Art Institute of Colorado, to “Candidacy,” meaning the schools essentially lost their accreditation. While this information was publicly posted online, the company failed to notify students about the change. Students continued to attend and take out federal loans for unaccredited credits that might not transfer to other schools, as well as unaccredited degrees that might not be accepted by potential future employers.

Some Art Institute students sued, saying Dream Center misled then about the school’s accreditation. It’s also against the law for the Education Department to issue student loan funds to for-profit schools that are no longer accredited.    

In November 2019, Secretary DeVos had agreed to forgive federal student loans taken out between Jan. 20, 2018 and when the schools closed in December of that year for those who attended the Art Institute of Colorado and the Illinois Institute of Art’s campuses. 

The Associated Press reported that about $11 million in student debt would be canceled, but students would still be responsible for any federal loans taken out before that timeframe. 

Gardner, Bennet, as well as Illinois Democratic Sens. Tammy Duckworth and Dick Durbin, who co-signed the letter, said that the Education Department should reconsider the window of eligibility. 

The four senators wrote that those schools “effectively closed” on the day they lost their accreditation. 

“After that point, the best-case scenario for these students was to graduate with a worthless degree from a non-accredited institution — but the schools’ closure prevented even that for many,” they said. 

They went on to say that the relief granted by the department is “incomplete and does not relieve students of any of the debt they had previously taken on to attend the schools and which became worthless on Jan. 20, 2018.” 

Colorado’s Department of Higher Education agrees that the Art Institute of Colorado’s effective closure date was Jan. 20, 2018.

“We will continue to work toward any and all efforts to make the students of the Art Institute of Colorado whole,” the department said in a statement issued to CPR News. “We believe the students deserve to have as much relief as possible given the circumstances behind the closure of the institution.”

Editor's Note: This story has been updated to include a comment from Sen. Cory Gardner.