More than 80,000 students who attended for-profit schools in 39 states and the District of Columbia will have $102 million in private student loans forgiven under a government settlement announced Monday.
The settlement with Education Management Corporation, a Pittsburgh-based for-profit school that operates 110 schools in the United States and Canada, included campuses of The Art Institute in Raleigh and Charlotte.
As part of the deal, 2,881 students in North Carolina will receive $4.1 million in debt relief, according to an announcement Monday by Attorney General Roy Cooper. The average loan forgiveness is $1,370 per person. North Carolina and other states began investigating EDMC in 2014 based on complaints from students.
The settlement applies to students who enrolled between 2006 and 2014 and quickly dropped out of EDMC schools with little to show but debt.
Under the agreement, EDMC will be required to disclose accurate information about the total cost, average debt, default rate, job placement rate, average earnings and ability to transfer credits associated with its programs.
The company also agreed Monday to pay $95 million to settle a separate federal whistleblower lawsuit under the False Claims Act. In that case, brought by the U.S. Department of Justice on behalf of the Department of Education, the government alleged that EDMC illegally paid its admissions recruiters based on the number of students they recruited.