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Student Loans Repaid to Colorado Art Institute Alumni

Reembolsan préstamos estudiantiles a exalumnosStudent Loans Repaid Colorado

COLORADO’S ATTORNEY GENERAL OFFICE DISTRIBUTES $66,000 IN REFUNDS

Newsroom El Comercio de Colorado

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Attorney General Phil Weiser this month returned more than $66,000 to former Art Institute of Colorado students who were defrauded when the school’s corporate owner, Dream Center Education Holdings, failed to inform them that it lost its accreditation from the Higher Learning Commission. The refunds are part of a settlement that was reached with the Dream Center in receivership court after an investigation in which the Colorado Attorney General’s Office helped to uncover the company’s deception.

As part of the settlement, students from around the country who were attending the Art Institute at the time will also no longer be required to pay the more than $1.2 million in student loans they took out directly from the school. “Deceiving students who are expecting to receive an accredited degree and causing students to incur thousands of dollars in debt can have lasting financial implications for those students,” said Weiser.

“By ensuring that money from Dream Center is returned to those students who attended the Art Institute when it lied about its accreditation, we are working to remedy the financial harms caused by Dream Center when it defrauded students.” The Art Institute of Colorado lost its accreditation on Jan. 20, 2018, but Dream Center misrepresented to students that the school was institutionally accredited until June 2018.

Accreditation is important because it recognizes that an institution of higher education maintains certain quality standards, and it helps students determine if an institution is acceptable for enrollment. After Dream Center finally disclosed the loss of accreditation, the Art Institute closed, leaving students with degrees of very limited value, non-transferable credits, and massive debt loads.

To address this wrongdoing, the Attorney General’s Office facilitated the return of some of the money students lost due to the school’s deception. The $66,000 refunded to students was from loan payments students made directly to the school for credits on or after Jan. 20, 2018. Art Institute students who attended the school as of Jan. 20, 2018, and borrowed from the school to pay for credits can expect the following:

Students will receive a letter from their servicer, Tuition Options, as well as a letter when they log in to their student loan accounts, notifying them that certain institutional loans are subject to the settlement;
Students should have seen an adjustment to their loan balance within the last four to five months; and
More than 50 students will receive checks from the Colorado Office of the Attorney General for amounts paid on institutional loans for the period Dream Center misrepresented Art Institute of Colorado’s accreditation.

Last fall, Weiser was also successful in urging the U.S. Department of Education to dismiss federal student loans for nearly 500 former Art Institute of Colorado students. Students who were enrolled from Jan. 20, 2018, until the school closed can also apply to have remaining loans discharged, which means they would all be cancelled, due to the school’s closure.