Biden Cancels $37 Million in University of Phoenix Student Debt

by Bria Overs

Originally appeared in Word in Black

The Department of Education approved another round of debt forgiveness for 1,200 graduates and former students of the University of Phoenix. Officials say that $37 million in student loans will be canceled for the group in early October.

Forgiveness applies to students enrolled at the university between Sept. 21, 2012, and Dec. 31, 2014, and who applied for relief through the Borrower Defense Loan Discharge program. 

This decision is part of another lawsuit against for-profit colleges that allegedly mislead students and falsely advertise their offerings. On Aug. 30, the Biden-Harris administration approved $72 million in forgiveness for over 2,300 students who attended Ashford University from 2009 to 2020.

The University of Phoenix debt cancellation adds to the existing pool of $14.8 billion of relief for nearly 1.1 million borrowers whose colleges, many of which are for-profit, took advantage of them or closed abruptly, according to a statement from the Department of Education.

Black and African American students are their second-largest group of attendees. In 2014, they were 27% of their enrolled student body. As of 2021, Black students are 34.5% of those enrolled.

According to the Student Borrower Protection Center, Black communities are more likely to be targeted by for-profit colleges and live in areas with these schools. 

Loans will be automatically discharged for eligible borrowers. Borrowers not part of the original group who believe they are eligible can apply for forgiveness on the Federal Student Aid website.

The Department of Education and the Federal Trade Commission (FTC) found evidence of the university misleading students during its 2012 “Let’s Get to Work” advertising campaign.

The campaign claimed the college had direct connections with major companies like Microsoft, AT&T, American Red Cross, and Adobe. They also told students that these businesses were “looking specifically at University of Phoenix students instead of any other school,” according to the Department of Education.

“Based on the evidence the FTC provided, as well as information obtained from Phoenix, the Department determined that Phoenix brazenly deceived prospective students with promises of improved job prospects to entice them to enroll,” Richard Cordray, chief operating officer of Federal Student Aid, says.

The FTC found that the University of Phoenix also targeted active-duty military members, veterans, and spouses.

“When for-profit colleges prey on students, peddling false promises, those students often fall deeply into debt, unable to pay off their loans,” Malini Mithal, associate director of the division of financial practices at the Federal Trade Commission, says. “They deserve to get their money back and pursue their educational and professional goals.

Both the FTC and Department of Education say they’re monitoring misconduct from colleges and plan to take action to address claims against them.

“We can’t give them back their wasted time and effort, but we can eliminate the burden of loans taken out for useless Phoenix degrees,” Cordray says.