Biden forgives $37M in student loan debt for Phoenix University borrowers.
Biden forgives $37M in student loan debt for Phoenix University borrowers.
Biden Administration to Cancel Student Loan Debt for University of Phoenix Students
The Biden administration has announced its plan to cancel $37 million in student loan debt for approximately 1,200 students who attended the University of Phoenix between September 21, 2012, and December 31, 2014. These students had applied for relief under the borrower defense loan discharge program. The decision came after an investigation conducted by the Department of Education (DOE), which revealed that the university’s national ad campaign misled prospective students by falsely claiming partnerships with major corporations.
The university’s advertisements gave the impression that students would benefit from these partnerships, including hiring preferences at companies like Microsoft, Adobe, and AT&T. The DOE stated that the school misled borrowers by suggesting that a degree from Phoenix would open doors to thousands of job opportunities. However, in reality, the university’s relationship with corporate partners did not provide any benefits to its students. The DOE further clarified that the partners only allowed Phoenix to display their logos and names in a career database portal, while the job opportunities themselves were available to the general public.
Students who applied for federal loans under the borrower defense loan discharge program may qualify for relief due to being affected by the misleading information provided by the university. The DOE will notify these borrowers by early October that their applications have been approved. Consequently, their outstanding loan balances will be zeroed out, and any credit trade lines related to the loans will be deleted. Additionally, any payments made by these borrowers on the loans will be refunded. However, the Department also mentioned that it intends to initiate legal proceedings against the University of Phoenix to seek repayment of the liabilities associated with these approved claims at a later date.
Richard Cordray, Chief Operating Officer of DOE Federal Student Aid, strongly criticized the University of Phoenix for its deceptive advertising practices, stating, “The University of Phoenix brazenly deceived prospective students with false ads to get them to enroll.”
Clock Ticking for Student Loan Repayments
The Biden administration has already approved over $117 billion in debt cancellations, including $14.8 billion in relief for 1.1 million borrowers who were victims of predatory practices by their colleges, according to the DOE. However, with the Supreme Court’s decision last June to strike down President Biden’s proposed student loan forgiveness plan, repayments are set to begin in October.
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To prepare for the resumption of student loan payments, borrowers are advised to gather accurate information about their federal loans. They can do this by logging into their accounts at StudentAid.gov and reviewing the list of all their loans. Checking important details such as the service provider’s name, payment history, and remaining balance is crucial. It is also necessary to ensure that contact information is up to date to receive pertinent notices. Borrowers should visit their service provider’s website to review any financial information available and update personal data if required.
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By taking these steps, borrowers can properly prepare themselves for the upcoming student loan repayment period. Despite the setback to President Biden’s broader student loan forgiveness plan, the cancellation of debt for University of Phoenix students demonstrates the administration’s commitment to addressing fraudulent practices in the higher education sector and providing relief to affected borrowers.
