Savanna Hoffman
The University of Phoenix is a for-profit institution that has seen a steady decrease in attendance over the last several years. The university has been accused of using deceptive advertising practices to attract students and has settled allegations with the FTC for $191 million in 2019. The Biden administration has approved student loan forgiveness for borrowers who attended the University of Phoenix between September 2012 and December 2014 and were deceived by the school's job placement claims. The University of Phoenix loan forgiveness discharge may not cover the full amount of the loans and private student loan forgiveness is rare.
| Characteristics | Values |
|---|---|
| Loan forgiveness eligibility | Students who attended the University of Phoenix between September 21, 2012, and December 31, 2014, and were deceived by the school's claims, may be eligible for federal student loan forgiveness. |
| Loan forgiveness amount | The US Department of Education approved $37 million in student loan forgiveness for over 1,200 borrowers. |
| University of Phoenix response | The University of Phoenix intends to challenge loan discharges, stating that it will "vigorously challenge each frivolous allegation and suspicious claim through every legal avenue." |
| Private student loans | Private student loan forgiveness is rare. If your loans were through a private company, you will likely need to repay them. |
| Federal student loans | The likelihood of loan discharge is higher for federal student loans. |
| State assistance | Some states offer assistance and programs for student loan forgiveness. |
| Public Service Loan Forgiveness (PSLF) | The PSLF program forgives the remaining balance on Direct Loans after 120 qualifying monthly payments while working full-time for a qualifying employer. |
| Income-Driven Repayment Plans | These plans set monthly payments at an affordable amount based on income and family size, ranging from 10-20% of discretionary income. They offer potential interest subsidy benefits and loan forgiveness benefits. |
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What You'll Learn
University of Phoenix loan forgiveness eligibility
The University of Phoenix is a for-profit institution that has seen a steady decrease in attendance over the last several years. In 2023, the Federal Trade Commission (FTC) and the U.S. Department of Education (ED) announced that they would forgive about $37 million in student loans for borrowers who attended the University of Phoenix between late September 2012 and December 2014. This loan forgiveness is a result of the University of Phoenix's deceptive advertising practices, where they falsely claimed to work with prominent companies to create job opportunities for students.
To be eligible for loan forgiveness, you must have attended the University of Phoenix between September 21, 2012, and December 31, 2014, and have been deceived by the school's claims. Additionally, you must submit a valid application for relief through the ED's Borrower Defense program. The ED's decision is based on the FTC's 2019 court action against the University of Phoenix for using deceptive advertising practices to enrol students.
It is important to note that private student loan forgiveness is rare, and there is usually no incentive for a private company to forgive loans. If you have private student loans, you will likely have to repay them. However, some states offer assistance and programs, and you can contact your Attorney General for more information.
If you have federal student loans, your chances of loan discharge are much higher. You can apply for a Borrower Defense to Loan Forgiveness, which will ask you detailed questions about how the school misled you about employment prospects, program costs, loans, transferring credits, and any other areas where you felt misinformed. The loan forgiveness discharge may not be for the full amount, and you may need to continue making payments after the loan settlement.
The University of Phoenix intends to challenge the loan discharges it considers invalid, and the university has never admitted wrongdoing in its FTC settlement. However, federal officials have stated that the evidence gathered by the FTC is enough to discharge loans under the Borrower Defense to Repayment program.
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University of Phoenix's deceptive advertising
The University of Phoenix has been accused of deceptive advertising by the Federal Trade Commission (FTC). The FTC alleged that the university ran ads falsely claiming it had relationships with companies like Microsoft, Yahoo!, Twitter, Adobe, AT&T, and American Red Cross, among others. The university allegedly used these companies' logos in its advertising, which may have led students to believe that the university worked with these companies to create career opportunities for its graduates.
The University of Phoenix's advertising campaign specifically targeted military and Hispanic consumers, according to the FTC. Richard Cordray, chief operating officer for the Office of Federal Student Aid, called the campaign "brazenly deceptive." The university's peak in 2010, when it enrolled almost half a million students, has been attributed to this advertising campaign.
In 2019, the University of Phoenix agreed to a $191 million settlement with the FTC over claims that students were harmed by deceptive advertising and false claims about post-graduation job opportunities. The university, however, never admitted any wrongdoing and continues to deny the allegations. The settlement money was intended to provide relief to students who took out loans to attend the university between late September 2012 and December 2014.
The Department of Education (ED) has also announced that it will approve full federal student loan forgiveness for some University of Phoenix students who were deceived by the school's claims and submitted valid applications for relief through ED's Borrower Defense program. The ED's decision is based on the FTC's court action against the university. Students who believe they were misled by the University of Phoenix's advertising can file a deceptive advertising lawsuit or contact a law firm to discuss their legal options.
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Applying for University of Phoenix loan forgiveness
The University of Phoenix has been accused of using deceptive advertising practices to attract students. The Federal Trade Commission (FTC) charged the university with falsely claiming to work with prominent companies to create job opportunities for its students. As a result of these allegations, the US Department of Education (ED) announced that it would approve federal student loan forgiveness for eligible students.
To apply for University of Phoenix loan forgiveness, you must meet the following criteria:
- You attended the University of Phoenix between 21 September 2012 and 31 December 2014.
- You were deceived by the school's job placement claims.
- You submit a valid application for borrower defense to repayment (also known as BDTR or Borrower Defense program).
To submit an application, you can visit the borrower defense page on the ED website. You will need to fill out a borrower defense form and provide supporting documentation. Some of the documents that may be requested include the name of your advisor, pamphlets, transcripts, diplomas, and emails. If you are missing any documents, you can try using the Wayback Machine to find old pages with relevant information.
It is important to note that the University of Phoenix intends to fight loan discharges, and there is no guarantee that your application will be approved. However, if your application is successful, you will receive full loan forgiveness, and any payments received from the University of Phoenix settlement fund will not affect your pending application.
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Loan forgiveness for students of closed schools
The University of Phoenix, a for-profit institution, has been accused of using deceptive advertising to attract students, falsely claiming affiliations with prominent companies to help students secure jobs. The Federal Trade Commission (FTC) and the US Department of Education (ED) have taken action, with the ED announcing that it will approve federal student loan forgiveness for students who attended the university between September 2012 and December 2014, were deceived by the school's job placement claims, and submitted valid applications for relief through the Borrower Defense program. This decision is expected to impact over 1,200 students and forgive approximately $37 million in loans.
Now, moving on to the topic of loan forgiveness for students of closed schools, the closed school discharge program offers loan forgiveness for students with federal loans if their school closes before they complete their program. This program is designed to mitigate the disruptions caused by college closures, which can leave students in challenging situations. However, it's important to note that only certain students are eligible for this type of loan discharge. The program covers currently enrolled students and those who recently withdrew from the school, typically within 120 to 180 days before its closure. To qualify, students must have federal loans, such as direct loans, PLUS loans, or other federal loan types. Private student loans do not qualify for the closed school discharge program, but lenders may offer alternative solutions to make payments more manageable.
It's essential for students affected by a school closure to understand their loan forgiveness options. The closed school discharge policy provides relief to borrowers who are unable to graduate due to their school's closure. This includes currently enrolled students and those on an approved leave of absence. Additionally, students who withdrew from the school shortly before its closure, within the specified timeframe, may also be eligible. However, accepting a teach-out agreement, which allows students to complete their program at another institution, usually disqualifies borrowers from the closed school discharge program.
For those who do not qualify for a closed school discharge, there are alternative options available to manage their loan payments. The federal student aid program offers income-driven repayment plans, which can result in lower or even zero monthly payments based on the borrower's income. Loan consolidation is another option, providing borrowers with an extended repayment period of up to 30 years, leading to lower monthly payments. Refinancing allows borrowers to take out a new loan with a lower interest rate or a longer repayment period, making payments more manageable. Public Service Loan Forgiveness is also an option for borrowers who work for a qualifying public employer for a specified period, typically ten years. Additionally, students can explore options like deferment, which allows a pause in monthly payments for up to three years, and forbearance, which provides a temporary halt in payments for up to 12 months.
While loan forgiveness for students of closed schools can provide much-needed relief, it's important to carefully review the eligibility requirements and understand the specific circumstances that qualify for this type of loan discharge. Students facing difficulties with loan payments should explore the available options, including those offered by their lenders, to find the best solution for their financial situation.
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University of Phoenix's response to loan discharges
The University of Phoenix has responded to the federal government's decision to cancel $37 million in loans for former students by stating that it will “vigorously challenge each frivolous allegation and suspicious claim through every available legal avenue". The university's spokesperson, Andrea Smiley, reiterated that the University of Phoenix never admitted any wrongdoing in its FTC settlement.
The University of Phoenix, once a for-profit giant, has faced a significant decline in enrollment over the last decade due to lawsuits and scandals. Federal officials have accused the university of falsely advertising relationships with prominent companies, including those in the Fortune 500, and misleading students about job opportunities. The university settled similar FTC allegations in 2019 for $191 million.
The Biden administration's decision to forgive loans for students who attended the University of Phoenix between September 2012 and December 2014 aligns with its mission to hold accountable institutions deemed poorly performing and deceptive. The Education Department intends to recoup the discharge costs from the university's current owners, Apollo Global Management and the Vistria Group, which could be challenging given similar attempts with other for-profit colleges.
The University of Phoenix's response to loan discharges indicates its intention to contest the validity of claims and allegations. The university's refusal to acknowledge wrongdoing in its FTC settlement may complicate the Education Department's efforts to recover costs associated with loan forgiveness. The university's stance on the matter highlights the ongoing legal complexities surrounding student loan forgiveness and institutional accountability.
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Frequently asked questions
Students who attended the University of Phoenix between September 21, 2012, and December 31, 2014, and were deceived by the school's job placement claims may qualify for loan forgiveness. Students must submit a valid application for borrower defense.
The University of Phoenix loan forgiveness discharge may not cover the full loan amount. Students must submit a borrower defense form and may need to contact their state legislative representatives and advocacy groups in Washington. The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on Direct Loans after 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
The likelihood of loan discharge is greater for federal student loans. Private student loan forgiveness is rare, and there is little incentive for private companies to forgive loans. However, some states offer assistance and programs, and students can contact their Attorney General for more information.
