President Biden’s student debt relief campaign is again helping over a thousand students. The Biden administration declared the cancellation of approximately $37 million in student debt for over 1,200 University of Phoenix attendees.
President Biden’s student debt relief initiatives have made significant strides, with billions in debt forgiven so far.
The US Department of Education states that relief will reach numerous applicants for borrower defense discharges between September 21, 2012, and December 31, 2014.
This program enables students to nullify their federal student loans if they can substantiate deception or fraud by their educational institutions.
The Education Department accused the University of Phoenix of deceiving students through nationwide advertising campaigns.
These campaigns falsely led students to believe their employment opportunities would be enhanced through the university’s corporate partnerships, including Fortune 500 companies.
The Education Department also alleged that University of Phoenix leadership knew the school’s purported corporate partnerships were fictitious. According to the Education Department, a senior vice president at Phoenix referred to a specific advertisement as employing deceptive tactics.
Richard Cordray, the federal student aid chief operating officer, accused the University of Phoenix of shamelessly misleading potential students through deceptive advertisements to boost enrollment.
He remarked that students who had faith in the institution and sought educational improvement were left burdened with substantial debt and worthless degrees.
University of Phoenix Disputes Allegations and Calls for Review
A comment request received no immediate response from the University of Phoenix.
Later, a spokesperson for the University of Phoenix expressed their firm disagreement with the allegations made by the U.S. Department of Education regarding the December 2019 settlement with the Federal Trade Commission (FTC).
They emphasized that the claims by both the FTC and the Department of Education were never subjected to a court trial. The university stands by its statement from December 2019, which acknowledged no wrongdoing in the Let’s Get Back to Work campaign, a single campaign from late 2012 to early 2014.
They encourage a review of their statement and the advertisements available on a dedicated University of Phoenix microsite.
FTC investigated the University of Phoenix in 2019
The Federal Trade Commission (FTC) presented findings from its multiyear probe into the University of Phoenix, which led to a $191 million settlement in 2019.
The FTC had acquired internal emails, promotional materials and recorded phone conversations with potential University of Phoenix students as part of its investigation.
Samuel Levine, the director of the FTC’s Bureau of Consumer Protection, expressed the importance of providing substantial relief to students whom the University of Phoenix may have misled.
He affirmed that the FTC will continue collaborating with state and federal partners to safeguard students’ interests.
Borrowers’ loan relief process
University of Phoenix students faced some of the nation’s highest borrowing rates, as disclosed by higher education authority Mark Kantrowitz.
In the academic year 2022-2023, students from the University of Phoenix borrowed nearly $484 million in loans.
Affected borrowers will receive notifications regarding the relief in early October, and their outstanding loan balances will be eliminated.
Borrowers who believe they have been victims of fraud can seek relief through a “borrower’s defense discharge” application on the Federal Student Aid website.
The “closed school loan discharge” and “borrower defense to repayment discharge” programs allow borrowers to request the cancellation of their student loans when their school shuts down while they are attending or if the school has engaged in deceptive practices that misled students.
Biden’s Student Debt Relief Program
Up to this point, the Biden administration has eliminated over $117 billion. Biden’s student debt relief benefits 3.4 million borrowers by adjusting specific repayment schemes and the Public Service Loan Forgiveness program.
The Supreme Court halted President Joe Biden’s student debt relief to forgive up to $20,000 in student debt for tens of millions of Americans in June.
While for Biden’s student debt relief, his administration explores a more focused approach, experts anticipate that the upcoming plan may impact a smaller group of individuals, emphasizing the evolving nature of his efforts in this area.