Tenn. Attorney General joins coalition urging relief for borrowers enrolled at closed colleges

AG acts on behalf of Argosy and Art Institutes students
Posted at 1:13 PM, Oct 18, 2019

NASHVILLE, Tenn. (WTVF) — Tennessee Attorney General Herbert Slatery has joined a bipartisan coalition of 30 state Attorneys General. The coalition is requesting that U.S. Department of Education Secretary Betsy DeVos extend the closed school discharge timeframe for students who were enrolled in schools operated by Dream Center Education Holdings, LLC (DCEH).

Dream Center - a nonprofit organization - acquired several university systems in 2017, including Art Institutes, Argosy University and South University. Just months after the acquisition, many of the schools closed.

In a letter addressed to DeVos, the Attorneys General wrote, "A wide variety of regulators, including the U.S. Department of Education, have found that DCEH violated numerous federal and state laws, was noncompliant with accreditors and grossly mismanaged its schools - including Argosy University, The Art Institutes, and South University - leading to the schools’ recent closures.”

Under the closed discharge rule, former students may be eligible for a complete discharge of their William D. Ford Federal Direct Loan Program loans, Federal Family Education Loan Program loans or Federal Perkins loans, so long as they were unable to complete their college program because their school closed.

This rule only applies to students who were enrolled at the school when it closed, were on an approved leave of absence when the school closed or withdrew within 120 days of the school's closure. The Secretary of the U.S. Department of Education has the authority to extend that 120-day period allotted to students who fall under the latter category.

The coalition believes the circumstances leading to the closure of DCEH schools call for an extension for students who withdrew sooner than 120 days before their school closed.

Tennessee Attorney General Slatery is part of the coalition because Argosy University and The Art Institutes had campuses in Nashville.

"The Office is acting on behalf of Tennessee students who were enrolled at The Art Institutes and Argosy in Nashville," said Slatery. "When those schools closed in December 2019, students were unfairly left with substantial debt and no degree to show for it."

To read the letter the Attorneys General sent to DeVos, head here.