Art Institute Lawsuit: 2 Effective Ways To Get Loan Forgiveness

If you took out federal student loans to enroll in one of the closed-down Art Institute schools, you could get student loan forgiveness. There are two main ways to take advantage of the Art Institute lawsuit: 

  1. Borrower’s Defense to Repayment 
  2. Closed School Discharge program 

However, judicial, political, and bureaucratic issues have plagued the Borrower’s Defense to Repayment program ever since the program was enacted in 2016. 

The program’s criteria have undergone several revisions over the years. More than a few thousand applications have been denied or unprocessed for years.

But the Biden administration has made significant changes in that area. That means you can still get your loans canceled through the Borrower’s Defense to Repayment. 

We’ll explain more in this guide. 

Let’s begin.

Art Institute Lawsuit: Ways To Get Rid Of Your Student Debts 

 Borrower’s Defense To Repayment 

This program helps people who borrowed money from federal loans to pay for college but were persuaded against their better judgment. But unfortunately, the schools used deceptive promises and advertising to dupe these borrowers. 

It’s evident from the Art Institute lawsuit that the institution disregarded numerous laws to entice students to take out loans. You could qualify for the loan forgiveness program if you obtained one of these loans. 

This program has the authority to forgive all of your debt completely.

Many Borrowers Were Defrauded

However, you’re not the only one affected by these fraudulent acts. Numerous graduate and undergraduate students have also fallen victim to fraud and taken out loans. So you’ll have to develop a better argument to win your case. 

But it’s possible to get your student loan forgiveness through this program; other people have already done it. 

New Settlement Agreement Offers Forgiveness For Borrowers 

Several student loan borrowers and the Education Department reached a settlement deal in the Sweet v. Devos lawsuit. This lawsuit was initiated by borrowers against the Education Department several years ago over delayed Borrower Defense petitions.

Here’s how the settlement terms work. First, any borrower who completed a Borrower’s Defense to Repayment application before June 22, 2022, would be entitled to have their federal student loans forgiven. 

However, you must have enrolled in one of the institutions covered by the agreement. And if you have made any payments, you’ll get a refund. Some schools include The Art Institute, Argosy University, and the American Career Institute. 

Closed School Discharge Program 

Another way to get student loan forgiveness is through the Closed School Discharge program. With this program, you could get your loans canceled if your school closed before you could finish your education. 

To be eligible for this program: 

  • You must have been actively enrolled in the Art Institute before it shut down. 
  • Left the institution less than 120 days before it closed down. 

How To Apply For A Closed School Discharge Program 

You must have the required paperwork and information and go to the federal student loan aid website to apply. Keep an eye out for fake websites and scams. Always apply at the Federal Student Loan Aid official site. 

Here’s how to apply

  1. Click the link to download the application.
  2. Fill out the form completely by entering the correct data in each field.
  3. Send your loan servicer the completed paperwork.
  4. If you are unsure who your loan servicer is, it’s the organization to which you send your regular payments for student loans.

Remember that each student loan servicer may have its processes for handling your application for a closed-school discharge. So contact them for additional details and clarification. 

Which Program is The Best Option? 

There’s no right or wrong action. And that’s because both programs are designed to discharge you of your outstanding school debt. They may even refund any payments you have made toward your loan’s principal until it is forgiven. 

If you qualify for both, it’s ideal to go for the Closed School Discharge program. And that’s because it has a quicker approval rate than the Borrower’s Defense to Repayment program. Also, the Borrower’s Defense can take months or even years to complete the process. 

Remember that you can’t apply for both programs. 

But the decision is entirely up to you. So it’s ideal to talk to a student loan expert. They’ll guide you to make the best decision to pick a program based on your requirements. 


If you’ve been defrauded and looking for a way to cancel your debt, this guide can help. However, you need to consult an expert to make the right decision. You don’t have to go through your debt crisis alone. 

Gather all the information you need, seek financial help, and you may not have to pay back your debt.

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