LANSING, Mich. – Michigan Attorney General Dana Nessel announced Monday that former students of The Art Institutes of Michigan will receive nearly $29,000 in debt relief as part of a court order.
Nessel’s office stated the order is aimed at addressing the “predatory and deceptive practices of the institutes’ parent company, Dream Center Education Holdings LLC (DCEH).”
Under a March 23, 2020 order from the U.S. District Court, Northern District of Ohio, 123 former students in the states of Colorado, Illinois and Michigan are to receive a total of $133,278.
According to Nessel’s office that is a result of DCEH’s misrepresentation to student loan borrowers. For Michigan, 28 students will receive a share of $28,929 in debt relief.
DCEH, which is now in receivership, was in the process of purchasing several failing for-profit educational institutions – including The Art Institutes of Michigan – from the collapsing for-profit chain Education Management Corp. The Art Institutes of Michigan closed unexpectedly in 2018 and left behind students with debt and no degrees.
“Many students pursue their college educations with hope that the degrees they earn will enrich their lives, and they choose to make an investment in their futures by accumulating debt,” Nessel said. “Universities and higher education institutions must be held accountable if they’re not holding up their end of the deal by providing students with legitimate degrees and an appropriate education. I’m pleased these students are being provided some relief after being blindsided by an entity that was not playing by the rules.”
Multiple allegations were made against DCEH and its for-profit schools.
In addition to receiving the reimbursements, some Michigan students who obtained loans to attend the DCEH schools have had that debt forgiven.
Aside from the nearly $29,000 to be refunded directly to Michigan students, roughly $1.065 million in student loans will be discharged. About $782,500 in loans will be discharged under the U.S. Department of Education’s closed school discharge rules. Another nearly $282,900 will be discharged due to DCEH’s misrepresentation of its accreditation.