Biden Administration Announces Forgiveness of $37 Million in Debt for Former University of Phoenix Students

In a significant move, the Biden administration has declared the forgiveness of $37 million in debt for over 1,200 former students who attended the University of Phoenix. This for-profit college has long been mired in controversy, with allegations from the Department of Education (DOE) that it misled students through deceptive advertising practices.

The allegations revolve around a national advertising campaign that enticed prospective students with promises of preferential hiring treatment at prestigious companies, including industry giants like Microsoft and Adobe. However, a thorough investigation conducted by the Federal Trade Commission (FTC), and subsequently reviewed by the DOE, uncovered that the University of Phoenix had falsely portrayed its relationships with these corporations, many of which were Fortune 500 companies.

Richard Cordray, the Chief Operating Officer for Federal Student Aid, a DOE division responsible for providing financial aid to students, did not mince words when he stated that the university had “brazenly deceived” numerous students. During a call with reporters on Wednesday, Cordray emphasized that this action should serve as a clear signal that the government is closely monitoring such practices and is prepared to take action against misconduct.

The debt forgiveness initiative specifically applies to students who were enrolled at the University of Phoenix between September 2012 and December 2014 and had already applied for borrower defense loan forgiveness. Notably, in 2019, the FTC reached a settlement with the university, resulting in a substantial $191 million settlement to address its deceptive advertising practices.

Andrea Smiley, a spokesperson for the University of Phoenix, expressed the institution’s firm disagreement with the DOE’s allegations, which ultimately led to the settlement. The university maintains that its advertising campaign was lawful and that it will staunchly contest each allegation and suspicious claim through all available legal avenues. While the university acknowledges the need for relief for borrowers with valid claims, it is determined to challenge what it deems as “frivolous” allegations.

It’s worth noting that the forgiveness announced on Wednesday pertains to only a fraction of the students who have filed claims against the University of Phoenix. Many more individuals have sought resolution regarding their experiences with the institution.