Washington, D.C. – In a significant development, the U.S. Department of Education has announced the forgiveness of nearly $37 million in federal loans for over 1,200 students who fell victim to the deceptive practices of the University of Phoenix. This move directly results from the Federal Trade Commission’s (FTC) 2019 case against the for-profit university.
Director of FTC’s Bureau of Consumer Protection, Samuel Levine, commented on the development: “Students deceived by the University of Phoenix deserve strong relief, and today’s action is an important step forward. We will continue to work with our state and federal partners to protect students.”
Federal Student Aid Chief Operating Officer Richard Cordray added, “The University of Phoenix brazenly deceived prospective students with false ads to get them to enroll. Students who trusted the school and wanted to better their lives through education ended up with debt and useless degrees. Today’s announcement builds on the FTC’s work to relieve those affected by Phoenix’s misconduct and delivers on the Biden-Harris Administration’s mission to support student loan borrowers.”
The 2019 FTC complaint against the University of Phoenix and its parent company, Apollo Education Group, Inc., revealed that they had falsely claimed to have relationships with top companies that created job opportunities exclusively for University of Phoenix students. Additionally, they falsely asserted that they collaborated with these companies in curriculum development. The FTC alleged that these deceptive practices were promoted through a multimedia advertising campaign targeting military and Latino consumers. The campaign, “Let’s Get to Work,” featured prominent employers such as Microsoft, Twitter, Adobe, and Yahoo!, creating the false impression that the University of Phoenix had partnered with these companies to provide job opportunities for its students.
This latest announcement from the U.S. Department of Education builds upon the FTC’s previous federal court order against the University of Phoenix. As part of this order, the school was required to pay $50 million to the FTC for disbursal to former students and to cancel $141 million in private student debt directly owed to the school. Furthermore, the order imposed restrictions on the companies to prevent further deceptive business practices. In March 2021, the FTC initiated payments to eligible University of Phoenix students, providing over $45.6 million in relief. Additionally, the FTC disbursed more than $3.6 million to 130,652 individuals who had cashed their initial payment.
The U.S. Department of Education has now committed to granting federal student loan forgiveness to those who attended the University of Phoenix, were misled by the school’s false job placement claims, and submitted valid applications for borrower defense. The agency continues to process new and existing applications, assuring all borrowers with approved claims will receive full loan forgiveness. Those interested in submitting a claim for loan forgiveness can find detailed information on the Department of Education’s Borrower Defense Loan Discharge informational page.
This significant move underscores the commitment of federal agencies to protect the rights and financial well-being of students who have been misled by educational institutions, sending a clear message that deceptive practices will not be tolerated in higher education.