Education Dept. Approves $37 Million in Loan Forgiveness for Former University of Phoenix Students

The US Department of Education has approved nearly $37 million in student loan forgiveness for more than 1,200 borrowers who were enrolled at the University of Phoenix and were deceived by the institution in 2012.

In a press release issued on Wednesday (September 20, 2023), the Department said that these students were misled by a 2012 advertising campaign that promised job opportunities, Erudera.com reports.

Students who applied for debt relief under the borrower defense program attended the University of Phoenix between September 21, 2012, and December 31, 2014.

Under the borrower defense program, students who prove their colleges have deceived them are eligible to apply for debt relief.

According to the statement, the institution misled potential students by falsely claiming that its affiliations with numerous corporations, including Fortune 500 firms, would benefit students by giving them priority in job positions within these companies.

“Students who trusted the school and wanted to better their lives through education ended up with mounds of debt and useless degrees. Today’s announcement builds on the FTC’s work to provide relief to those affected by Phoenix’s misconduct and delivers on the Biden-Harris Administration’s mission to support student loan borrowers,” Federal Student Aid Chief Operating Officer Richard Cordray, said.

Last month, the Department of Education canceled $72 million in federal student loan debt for more than 2,300 borrowers who attended Ashford University in California.

US President Joe Biden announced its student loan forgiveness plan in August last year, which would have forgiven $10,000 for all federal student loan borrowers and $20,000 for Pell Grant recipients.

But, soon after the announcement, Biden’s student loan forgiveness plan faced several lawsuits by several Republican-led states and conservative groups aiming to block the debt relief program. The lawsuits accused the President of overstepping his powers in trying to forgive student loan debt.

On June 30, the Supreme Court agreed with states challenging Biden’s student loan forgiveness plan and rejected the program. The court ruled the administration does not have the authority to cancel more than $400 billion in student debt.

“So let me be clear: For Republicans in Congress, this is not about reducing the deficit, it’s not about fairness and forgiving loans, it’s only about forgiving loans they have to pay. Today, the Supreme Court sided with them. I believe the Court’s decision to strike down my student debt relief program was a mistake, was wrong,” Biden said in a statement on June 30 after the court’s decision, adding he will continue to fight until borrowers get what they need.

So far, the total amount of debt approved for forgiveness by Biden’s administration stands at more than $117 billion, including $14.8 billion for 1.1 million borrowers whose colleges were closed or exploited students.

There are about 43 million student loan borrowers in the United States, and federal student loan debt totals $1.766 trillion.

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