Biden to forgive $37 million in debt for former University of Phoenix students
The Biden administration said Wednesday it would forgive $37 million in debt for more than 1,200 former students at the University of Phoenix, a controversial for-profit college that the Education Department alleges misled students for years with false advertising.
A national ad campaign promised prospective students that attending the school would lead them to receive preferential hiring treatment at a number of high-profile companies, including Microsoft and Adobe.
An investigation conducted by the Federal Trade Commission and reviewed by DOE found that the university misrepresented its relationships with those businesses, which included many Fortune 500 companies.
Richard Cordray, chief operating officer for Federal Student Aid, the division of DOE that provides financial aid to students, said on a call with reporters Wednesday the university “brazenly deceived” hundreds of students.
To settle with Federal Trade Commission, University of Phoenix to cancel $141 million in student debt
“Today’s action should serve as a signal to others that we’re monitoring what they do and we will take action to address their misconduct,” he said.
The forgiveness applies to students enrolled at the university between September 2012 and December 2014 and already applied for borrower defense loan forgiveness. In 2019, the FTC reached a settlement with the university totaling $191 million over its deceptive ad practices.
Andrea Smiley, a spokesperson for the University of Phoenix, said the school adamantly disagrees with the Education Department’s allegations that led to the settlement, and the university maintains it acted legally in its ad campaign.
“While the university is not against relief for borrowers who have valid claims, we intend to vigorously challenge each frivolous allegation and suspicious claim through every available legal avenue,” Smiley wrote in an email to USA TODAY.
The students affected by Wednesday’s announcement are just a fraction of the thousands who have filed claims against the university.
Zachary Schermele is a breaking news and education reporter for USA TODAY. You can reach him by email at zschermele@usatoday.com. Follow him on X at @ZachSchermele.
This article originally appeared on USA TODAY: Biden offers former University of Phoenix students debt forgiveness
