A sign marks the location of the University of Phoenix Chicago Campus in Schaumburg, Illinois.
The Biden administration announced Wednesday it would cancel nearly $37 million in student debt for more than 1,200 students who attended the University of Phoenix.
The relief will go to many borrowers who applied for borrower defense discharges between Sept. 21, 2012, and Dec. 31, 2014, according to the U.S. Department of Education. The borrower defense program allows borrowers who can prove they’ve been misled or defrauded by their schools to get their federal student loans voided.
The University of Phoenix’s national ad campaigns misled students by making them believe their job prospects would be improved by the school’s partnerships with thousands of corporations, including Fortune 500 companies, the Education Department said.
“The University of Phoenix brazenly deceived prospective students with false ads to get them to enroll,” said Richard Cordray, the federal student aid chief operating officer.
“Students who trusted the school and wanted to better their lives through education ended up with mounds of debt and useless degrees,” he said.
The University of Phoenix did not immediately respond to a request for comment.
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The Federal Reserve leaves rates unchanged. Goldman Sachs found that a ‘financial whirlwind’ could reduce retirement savings. The FTC had obtained internal emails, as well as advertisement materials and recorded phone calls with prospective Phoenix students.
“Phoenix management was aware that the corporate relationships the school claimed to have did not exist,” the Education Department said. One senior vice president of Phoenix called one of the ads in question’smoke and mirrors. The impacted borrowers should be informed of this relief in early October and any remaining loan balances will be cancelled. The University of Phoenix has some of the highest borrowing rates in the nation. Its students took out nearly $484 million in loans in the 2022-2023 academic year, according to higher education expert Mark Kantrowitz.
So far, the Biden administration has canceled more than $117 billion in student debt for 3.4 million borrowers, through fixes to certain repayment plans and the Public Service Loan Forgiveness program.
President Joe Biden’s plan to forgive up to $20,000 in student debt for tens of millions of Americans was blocked by the Supreme Court in June. The Supreme Court blocked President Joe Biden’s plan to forgive up to $20,000 in student debt for tens of millions of Americans.