Student Loans

I Stopped Going to the Art Institute But I Have Student Loans Impacting My Credit Now

Written by Steve Rhode

Question:

Dear Steve,

I enrolled in the Art Institute of Austin in 2009. I received a $3000 scholarship, a couple of Grants and had to take out one subsidized and one unsubsidized student loan. This money went straight to the school, not to me at all.

I left the school in March of 2010 before my Third quarter as the one and only financial aid adviser would not get back to me about my FAFSA, and I could no longer attend after the deadline.

At this point, I still have the student loans affecting my credit. When these loans were taken out, I didn’t receive this money, the loans went straight to the Art Institute, so I feel like they received free money from me that I’m obligated to pay back.

Admittedly, I haven’t been financially stable enough to pay off this debt, and I feel like I shouldn’t have to as I didn’t even attend for a full year, just a semester (or how they split it up, two quarters).

The Art Institute is currently in a lawsuit. And because I barely studied there and my scholarship/grants should’ve covered my time there, is it fair that I have to pay back these loans that I didn’t even receive and for an education that I didn’t even receive?!

I can find documents with dates if need be, I just need to know from a pro if I can benefit from this lawsuit or if I even have to pay, since they made it impossible for me to attend anyway.

Megan

Answer:

Dear Megan,

You are correct that the parent company of the Art Institute was sued and forgave some student loans. You can contact your state Attorney General office for more information on the 2015 settlement and ask if they have any additional information for you as a resident of the state.

However, the process was supposed to work that if a student was eligible for some loan forgiveness it would be granted automatically. Students eligible for some forgiveness are those who have been enrolled in an EDMC program with fewer than 24 transfer credits; withdrew within 45 days of the first day of their first term; and their final day of attendance must have been between January 1, 2006 and December 31, 2014.

READ  The Art Institute of Austin Wants to Sue Me Over Student Loan Debt

So I turned to a couple of attorneys for some more information and advice for you.

Attorney Christine Kingston from California suggested, you should “start with the school and ask them for a full accounting of all charges and costs incurred and ask about a partial refund for the unused monies since they did not attend that 3rd Quarter. After reviewing the accounting, you may or may not be entitled to a refund of some of the student loans issued, after using the Grants and Scholarships first. If you are entitled to a refund, those monies should flow back to the student loan lenders, giving the you a reduction in your student loans.”

Professor Richard Fossey said, it “is quite common for student aid money to go directly to the school–both loan funds and Pell grant money. Sometimes I think students aren’t even aware that they’ve taken out a loan; they just sign the paperwork that is put in front of them and they never see any of the loan money. Unfortunately, the student is still responsible for the debt.”

morehelp1
Choice1 Choice2 Choice3 Big Hug!
Get Out of Debt Guy - Twitter , G+ , Facebook
If you have a credit or debt question you'd like to ask just use the online form .




About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

1 Comment

Share a Comment / Leave a Reply

Scroll to Top
%d bloggers like this: